International Game Technology announced the signing of a long-term sports betting technology agreement with US casino operator Boyd Gaming Corp. lifting its shares in the pre-market trading session.
The stock is currently advancing 2.5% to $10.45 in Thursday’s early market session. Under the terms of the agreement, Boyd Gaming will use IGT’s (IGT) PlaySports platform to run Boyd Gaming’s retail sportsbooks throughout Nevada, along with its Nevada-based mobile sports app and online sports betting portal. Financial terms of the deal weren’t disclosed.
In addition, Boyd Gaming (BYD) will deploy IGT’s self-service PlaySports Kiosks throughout its Nevada-based gaming venues. The two companies said that they will take a phased approach for rolling out the features and services associated with this technology agreement.
“IGT and Boyd Gaming will create a dynamic omnichannel sports betting product that is sure to stand apart in Nevada, the most mature and high-volume sports betting destination in the US,” said Enrico Drago, IGT PlayDigital Senior Vice President. “IGT’s PlaySports platform enables Boyd Gaming to differentiate its sports betting product in meaningful ways that position them to attract new players and grow revenue in the segment.”
Apart from offering players a more robust and progressive sports betting program, the PlaySports platform will allow Boyd Gaming to offer improved backend system navigation, and seamlessly update app content in line with real-time data and betting trends. Players will also be able to enjoy a range of new bets, features and conveniences.
The agreement expands IGT and Boyd Gaming’s sports betting US cooperation, which started in 2018. The PlaySports platform is already running sports betting at Boyd Gaming-owned properties in Pennsylvania, Iowa, Indiana and Mississippi.
IGT shares have been hit hard this year and are still trading down 32% year-to-date. Indeed, Wall Street analysts are sidelined on the stock with a Hold consensus. Looking ahead, the $9.64 average analyst price target implies another 5.5% downside potential for the shares in the coming 12 months.
Earlier this month, Credit Suisse analyst Benjamin Chaiken downgraded IGT to Sell from Hold with a price target of $5, down from $19. Chaiken sees “multiple headwinds” to gaming technology over the short and medium term, “as slot floors shrink to make way for sports books”. (See IGT stock analysis on TipRanks)
The analyst believes consolidation in the casino industry reduces suppliers’ power and smaller operators continue to take market share.
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