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INTERNATIONAL GAME TECHNOLOGY PLC REPORTS SECOND QUARTER 2022 RESULTS

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  • Revenue of $1.02 billion, down 2% as reported and up 3% at constant currency, led by 23% growth in Global Gaming
  • Operating income of $228 million; operating income margin of 22% at high end of outlook on substantial increase in Global Gaming profitability and resilience in Global Lottery margin
  • Adjusted EBITDA of $409 million, in line with prior year’s record level at constant currency as Global Gaming performance offsets Lottery discrete benefits in the prior year; 40% adjusted EBITDA margin remains among the highest in Company history
  • Recognized a non-operating expense of $150 million representing the probable loss associated with legal proceedings related to Double Down Interactive LLC and its social gaming business sold in 2017
  • Diluted EPS from continuing operations of $(0.02); Adjusted diluted EPS from continuing operations of $0.57, up 78% from the prior year
  • Compelling shareholder returns with $135 million deployed for cash dividends and share repurchases year-to-date
  • Tightening full-year 2022 revenue outlook to reflect currency movements and perimeter impact from previously announced divestiture; reconfirming operating income margin outlook as fundamentals remain strong

 

International Game Technology PLC reported financial results for the second quarter ended June 30, 2022. Today, at 8:00 a.m. EDT, management will host a conference call and webcast to present the results; access details are provided below.

“Strong customer and player demand for IGT’s products and solutions drove some of our strongest profit results ever in the second quarter and first half of the year,” said Vince Sadusky, CEO of IGT. “Our business profile is supported by significant recurring revenue streams backed by long-term contracts and resilient end markets, providing a solid foundation on which to grow. We are laser focused on executing our strategic objectives and creating compelling value for our stakeholders.”

“Our first half results set us firmly on the path to achieving our 2022 financial targets,” said Max Chiara, CFO of IGT. “Rigor on costs and incremental revenue opportunities allow us to maintain our full-year operating income margin outlook despite unfavorable currency movements and macroeconomic challenges. At the same time, we are returning significant capital to shareholders via dividends and share repurchases.”

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Overview of Consolidated Second Quarter 2022 Results

Quarter Ended

Y/Y
Change
(%)

Constant
Currency
Change
(%)

All amounts from continuing operations

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June 30,

2022

2021

($ in millions)

GAAP Financials:

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Revenue

 Global Lottery 

648

725

(11) %

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(4) %

 Global Gaming

330

274

21 %

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23 %

 Digital & Betting

43

42

1 %

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4 %

Total revenue

1,021

1,041

(2) %

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3 %

Operating income (loss)

Global Lottery

230

300

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(23) %

(16) %

Global Gaming

57

1

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NM

NM

Digital & Betting

8

9

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(11) %

(10) %

Corporate support expense

(29)

(26)

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(11) %

(26) %

Other(1)

(39)

(40)

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3 %

2 %

Total operating income

228

244

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(7) %

1 %

Operating income margin

22 %

23 %

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Net cash provided by operating activities

196

249

(21) %

Cash and cash equivalents

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673

639

5 %

Earnings per share – diluted

$(0.02)

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$(0.48)

96 %

Non-GAAP Financial Measures:

Adjusted EBITDA

Global Lottery

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330

414

(20) %

(13) %

Global Gaming

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87

35

145 %

150 %

Digital & Betting

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12

13

(7) %

(6) %

Corporate support expense

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(20)

(21)

4 %

(14) %

Total Adjusted EBITDA

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409

442

(7) %

(1) %

Adjusted EBITDA margin

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40 %

4 %

Adjusted earnings per share – diluted

$0.57

$0.32

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78 %

Free cash flow

117

176

(34) %

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Net debt

5,722

6,312

(9) %

(1) Primarily includes purchase price amortization

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Note: Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided at the end of this
news release

Key Highlights:

  • Recently completed acquisition of iSoftBet, a leading iGaming content provider and third-party aggregator, greatly expanding the Company’s proprietary content library and providing a world-class game aggregation platform
  • Won “Lottery Supplier of the Year” at 2022 SBC Awards North America in July
  • Introduced high-performing Money Mania wide area progressive game to commercial gaming jurisdictions following a successful launch in tribal casinos
  • Signed agreement with NUSTAR Resort & Casino to deploy IGT ADVANTAGE™ casino management system and a variety of leading games and cabinets
  • Announced expanded sports betting partnership with SuperBook® Sports to Tennessee, the fourth state where IGT’s PlaySports platform is powering the SuperBook Sports mobile betting app
  • Awarded a gold medal sustainability rating from EcoVadis, a leading sustainability rating agency
  • Recently released 2021 Sustainability Report which outlines the Company’s demonstrated environmental, social, and governance (ESG) performance

Financial Highlights:
Consolidated revenue of $1.02 billion, down 2% as reported, or up 3% at constant currency, from $1.04 billion in the prior year

  • Global Lottery revenue of $648 million compared to $725 million in the prior-year period, which included $70 million in prior-year benefits primarily from the closure of gaming halls in Italy
  • Global Gaming revenue increases 21%, or 23% at constant currency, to $330 million, driven by strong U.S. & Canada replacement unit demand, higher average selling prices, and increased installed base yields
  • Digital & Betting revenue of $43 million, stable with the prior year, as iCasino growth in the U.S. is partially offset by softness in other markets; North America sports betting market gross gaming revenue impacted by lower hold levels

Operating income of $228 million, down 7% as reported, or up 1% at constant currency, from $244 million in the prior-year period

  • Global Lottery operating income down, primarily due to about $60 million related to prior-year benefits referenced above
  • Global Gaming rises on higher revenue and profit flow through, partially offset by increased supply chain costs
  • Digital & Betting operating income of $8 million was relatively stable with the prior year

Adjusted EBITDA of $409 million matches prior year’s record level at constant currency; Adjusted EBITDA margin of 40% remains among the highest in Company history

Net interest expense of $75 million compared to $91 million in the prior year, driven by lower average debt balances and interest rates

During the second quarter, the Company recognized a pre-tax non-operating expense of $150 million ($114 million after tax) representing the probable loss associated with ongoing litigation (Benson v. Double Down Interactive LLC, No. 2:18-cv-00525 (W.D. Wash.)) and associated claims related to Double Down Interactive LLC and its social gaming business sold in 2017 by International Game Technology, a wholly-owned subsidiary of the Company

Income tax benefit of $11 million compared to a provision of $32 million in the prior year, primarily driven by recognition of the non-operating expense mentioned above and foreign exchange losses in the prior year with no tax benefit

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Income from continuing operations of $34 million versus a loss from continuing operations of $39 million in the prior-year period, driven by income tax benefit, gains in foreign exchange, and lower debt retirement costs

Net loss attributable to IGT PLC of $4 million compared to net income of $306 million in the prior year due to gain on sale and income from discontinued operations in the prior-year period

Net loss from continuing operations attributable to IGT PLC per diluted share of $0.02 compared to a net loss from continuing operations attributable to IGT per diluted share of $0.48 in the prior year, on higher net income; adjusted net income per diluted share increased 78% to $0.57

Net debt of $5.7 billion compared to $5.9 billion at December 31, 2021; Net debt leverage of 3.5x was stable compared to December 31, 2021

Cash and Liquidity Update

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  • Total liquidity of $2.1 billion as of June 30, 2022; $0.7 billion in unrestricted cash and $1.5 billion in additional borrowing capacity
  • Executed amendment and extension of revolving credit facilities in July 2022
    • Increased liquidity by $150 million to $1.83 billion and rebalanced EUR/USD mix to match operational exposure
    • Extended maturities to July 2027
    • Lowered interest margin and added ESG provision to allow for further potential reductions
    • Raised annual permitted restricted payments basket from $300 million to $400 million at current credit rating; potential to increase to $550 million

Other Developments
The Company’s Board of Directors declared a quarterly cash dividend of $0.20 per common share

  • Ex-dividend date of August 15, 2022
  • Record date of August 16, 2022
  • Payment date of August 30, 2022

Repurchased 750,000 shares for $15 million in the second quarter at an average price of $20.48 per share; 2.2 million shares repurchased for $54 million on a year-to-date basis at an average price of $24.89 per share

The Company expects to close on the sale of its Italian proximity payments/commercial services business in mid-to-late September

Tightening Full-year Revenue Outlook for Currency Rates and Business Disposition; Introducing Third Quarter 2022 Outlook
Full Year

  • Revenue of $4.1 billion – $4.2 billion
    • Lowered high end of range by $100 million
    • Reflecting changes in currency rates and impact from sale of Italian proximity payments/commercial services business in Q3’22
  • Operating income margin of 20% – 22% remains unchanged
  • Cash from operations of $850 – $950 million
    • Lowered high end of range by $50 million
    • Primarily driven by a working capital investment in higher inventory levels to proactively manage supply chain disruptions
  • Capital expenditures of approximately $350 million, lowered by $50 million to adjust for updated timing of spending
  • Free cash flow outlook remains unchanged

Third Quarter

  • Revenue of approximately $1.0 billion – $1.1 billion
  • Operating income margin of 18% – 20% includes approximately 150 – 200 basis point impact from project-related expenses

Outlook assumptions

  • EUR/USD exchange rate of 1.00 in the second half of 2022
  • Impact from sale of Italian proximity payments/commercial services business in mid-to-late September 2022
  • Operating income margin includes approximately 150 – 200 basis point impact from project-related and restructuring expenses expected in the second half of 2022
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Entain Completes Full Rollout of Group BetStation Across All UK and Ireland Retail Locations

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Entain, the global sports betting and gaming group, has successfully and fully deployed its proprietary Group BetStation (GBS) platform across all Ladbrokes and Coral shops in the UK and Ireland.

This marks a major milestone in Entain’s digital retail transformation concluding a journey that began with the launch of the first GBS terminal in Feltham in November 2020 and culminated with the final installation in Swansea. In total, over 2400 shops were upgraded across the UK and Ireland.

GBS by numbers:

• Over 2400 shops upgraded across the UK and Ireland

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• 12000 betting terminals converted

• Strong growth in “Other sports” betting

• Grand National bets placed via GBS up by more than half year-on-year

• Football bet builder activity has doubled in the last six months.

GBS is a fully in-house developed, self-service betting solution that delivers a market-leading digital type experience to retail customers. Built entirely from the ground up, the project has converted 12,000 terminals and is now the primary sports betting channel across Entain’s retail estate. The deployment is the result of thousands of hours of development and testing, reflecting significant investment in technology and innovation.

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Fiona Wallace, Head of Self-Service Betting Terminals at Entain, said: “Five years ago, Entain set out to deliver a best-in-class betting experience for our UK and Ireland retail customers, through our BetStation terminals. Our software, which tech teams have worked tirelessly on over that period, is market leading, offering customers far more than we did in the past.

“This hard work has meant that all BetStation terminals across our retail estate have now been converted to Group BetStation, this is a transformational achievement. It has redefined the in-shop experience, driven engagement, and accelerated our journey toward retail digitalisation.”

Key to the platform’s success has been extensive collaboration across Entain’s Retail, Product & Technology, Commercial and Operational teams globally — including colleagues from the UK, Austria, Gibraltar, India and beyond. Feedback from over 14,000 UK retail employees has shaped product refinement, ensuring GBS delivers intuitive, responsive and feature-rich functionality.

GBS is reshaping customer behaviour in retail, enabling a shift towards more complex and personalised bets, including accumulators and bet builders. As a result, GBS has become the home for innovative betting formats and is central to Entain’s broader multi-channel growth strategy.

The post Entain Completes Full Rollout of Group BetStation Across All UK and Ireland Retail Locations appeared first on European Gaming Industry News.

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Taichi Tech Limited Fined £170,000 for Unfair Terms and Conditions

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An online gambling business has been fined £170,000 by the UK Gambling Commission (UKGC) for regulatory failures including the use of unfair terms and conditions.

Taichi Tech Limited – trading as Fafabet – will also have to undergo a third-party audit to ensure it is effectively implementing its anti-money laundering and safer gambling policies, procedures and controls.

A Commission investigation revealed Taichi Tech Limited had stated that: “Fafabet have the right at their own discretion to close accounts or forfeit winnings” within their bonus terms for new casino promotions.

The Gambling Commission’s investigation concluded that Taichi Tech Limited breached the fair and open licensing condition by including a discretionary term allowing the operator to close customer accounts or forfeit winnings without clear justification. Such terms lack transparency and may lead to unfair outcomes for consumers.

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The Consumer Rights Act 2015 (CRA) is the general consumer protection legislation, and it is explicitly referenced within the Licence Conditions and Codes of Practice (LCCP) that gambling companies must follow. The LCCP requires licensees to ensure that their terms and practices are fair, clear, and do not breach consumer protection law. Operators must therefore have regard to the CRA as part of their overall compliance obligations under the LCCP.

The investigation also found failures relating to anti-money laundering and social responsibility breaches.

Examples included:

• some customers were able to gamble large sums within a short period of time, despite the operator holding limited customer information

• in certain cases, individuals exhibiting potential markers of harm — such as high-velocity spending over short periods — received insufficient customer interaction from the operator

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• where safer gambling emails were sent but not acknowledged by the customer and concerning behaviour continued, there was no further follow-up or intervention by the operator.

John Pierce, Director of Enforcement and Intelligence at the Gambling Commission, said: “We expect all operators — regardless of their size or customer base — to comply with consumer protection legislation and ensure their terms and conditions meet regulatory standards.

“Licensed operators must ensure their terms are clear, fair, and transparent, so customers fully understand what to expect.”

He added that the Commission’s assessment identified deficiencies in the operator’s social responsibility and anti-money laundering controls, including failures to effectively manage risk and implement adequate consumer protection measures.

The operator has acknowledged that it previously fell short of the standards expected by the Commission and has since taken steps to address these shortcomings. As part of the regulatory outcome, the operator is required to commission an independent third-party audit to provide assurance of ongoing compliance with all relevant regulatory requirements.

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The post Taichi Tech Limited Fined £170,000 for Unfair Terms and Conditions appeared first on European Gaming Industry News.

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Current Games Activates the Nitro on Neon-Soaked Arcade Combat Racer: Cyber Clutch: Hot Import Nights

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Current Games Activates the Nitro on Neon-Soaked Arcade Combat Racer: Cyber Clutch: Hot Import Nights
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Current Games, a new name in indie publishing, based in the Netherlands, announced that it has assumed publishing rights for Cyber Clutch: Hot Import Nights, a heart-stopping, breakneck combat racing game, soaked in a neon lit future where speed and survival are the only routes to success!

A thrilling arcade style experience, Cyber Clutch: Hot Import Nights was first launched in Early Access on Steam in 2024, building a loyal community of dedicated fans passionate in seeing the game succeed. Current Games have heard the call and have spent a considerable amount of time diligently working under the hood, implementing a host of game-changing upgrades, delivering a fully revamped, nitro-powered experience, worthy of the Hot Import Nights (HIN) brand.

With the major update due to go live on July 24th 2025, speed demons are in for the ride of their lives as Cyber Clutch: Hot Import Nights power-ups on Steam, as well as launching on PlayStation®5, Xbox Series X|S and Epic Games® Store!

Make no mistake, this is no mere tweak, from July 24th, a whole host of surprises await fans of the game and newcomers alike. Some of the changes include:

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  • An all-new sprawling racing track to discover and master
  • More cars mean more fun! Discover your favourite vehicles and race like your life depends on it!
  • Major balancing changes based on extensive community feedback
  • A new single player career mode with championship races
  • Overall improvements to the game’s experience and stability

In taking over publishing for Cyber Clutch: Hot Import Nights Current Games is keen to emphasise their commitment to engaging with and supporting the community. Planned initiatives arriving soon include the reactivation of the games’ Reddit account, a new Discord server and a planned playtest scheduled for pre-launch.

In Cyber Clutch: Hot Import Nights, street legends are built after dark, as gamers brave enough to face the neon-soaked streets of the future, race, fight, and ultimately conquer with up to eight players competing head-to-head in a fight to survive and pass the winning line alive.

Each chariot in Cyber Clutch: Hot Import Nights is equipped with an arsenal of outlandish offensive and defensive weapons, enabling players to outmanoeuvre and outgun their opponents as they speed towards victory. Choose from a diverse range of customizable vehicles across three weight classes, each with distinct advantages. Lightweight vehicles boast speed but sacrifice defence, while heavyweight vehicles offer greater protection at the cost of agility. Weapons can be charged through pickups or by executing perfect drifts, adding a strategic layer to the high-speed action.

Accessible yet challenging, easy to play, impossible to put down, ruthlessly hard to master and never anything less than exhilarating, Cyber Clutch: Hot Import Nights is racing like you’ve never experienced before!

Roderick Roode, CEO of Current Games commented on the major upgrade and console release of Cyber Clutch: Hot Import Nights, “We are honoured to assume publishing rights for Cyber Clutch and determined to give this high-impact combat racing experience the love, attention and polish it deserves. Cyber Clutch has attracted a loyal audience in the year since launch, but we know the game is destined for even bigger things, and we’re thrilled to finally deliver a fully levelled-up experience, which we’re convinced will delight combat racing fans. In addition, we’re excited to bring the full Cyber Clutch experience to more gamers than ever, releasing on PlayStation, Xbox and the Epic Game Store, and cannot wait to see players assume their position on the starting grid later this month.”

The post Current Games Activates the Nitro on Neon-Soaked Arcade Combat Racer: Cyber Clutch: Hot Import Nights appeared first on European Gaming Industry News.

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