International Game Technology said on Monday that it entered into a multi-year agreement with sports betting and iGaming provider FanDuel Group, sending its shares up almost 8%.
The stock is currently advancing to $10.64 in Monday’s morning trading. Under the terms of the agreement, IGT’s (IGT) PlaySports platform will power all of FanDuel Group’s new and existing retail FanDuel Sportsbooks across the US through September 2024. Additionally, FanDuel Group agreed to offer IGT PlayDigital’s PlayCasino games in US states where FanDuel Group online casinos operate. Financial terms of the agreement weren’t disclosed.
“IGT’s multi-faceted, multi-year PlaySports platform technology and iGaming content agreement with FanDuel Group pairs the leading content and B2B sports betting provider with one of America’s most respected sports betting operators to propel an already winning partnership to new levels and create an abundance of opportunity for both parties,” said IGT PlayDigital Senior VP Enrico Drago. “IGT and FanDuel Group are positioned for continued success in the US and we are committed to fueling FanDuel Sportsbooks’ sustained growth through our proven, market-ready platform, player-preferred game content and self-service betting technologies.”
The multi-year agreement builds on IGT and FanDuel Group’s technology partnership that currently extends across nine US states and includes the FanDuel Sportsbook at Meadowlands Racing and Entertainment in East Rutherford, N.J. — the country’s highest-volume sportsbook. The agreement also includes the distribution of IGT PlayDigital’s PlayCasino games that offer slots, blackjack, roulette and more.
FanDuel Group is currently leveraging top-performing IGT PlayCasino games such as Wheel of Fortune Triple Extreme Spin, Triple Red Hot 7s Free Games, and Red Hot Tamales within its mobile wagering apps and websites in New Jersey and Pennsylvania.
IGT shares have been hit hard this year and are still trading down about 30% year-to-date. Indeed, Wall Street analysts have a cautious outlook on the stock with a Hold consensus. What’s more, the $8.62 average analyst price target implies another 19% downside potential for the shares in the coming 12 months. (See IGT stock analysis on TipRanks)
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”.
The analyst believes consolidation in the casino industry reduces suppliers’ power and smaller operators continue to take market share.
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