IGT considers digital and sports spin-off

The technology supplier announced the potential spin-off at its investor day yesterday (16 November). It follows a restructuring in July last year, that saw IGT reorganised into global gaming and lottery units.

Plans to carve out the digital and sports business from the global gaming division were then announced in September 2021.

IGT said it would “realign” the digital and betting segment into a new legal entity, a process that should be completed within the next 12 months. While this occurs, the business will evaluate whether it should pursue a separate listing.

In the past two months, it has brought in William Hill US veteran Joe Asher as president of sports betting, and former Bet365 executive Gil Rotem as president of gaming.

At the same time, the business also revealed its outlook for 2022. IGT expects revenue for the year to 31 December to fall between $4.1bn (£3.05bn/€3.63bn) and $4.3bn. With an expected operating margin between 20% and 22%, this would leave operating income somewhere between $850m and $1.0bn.

Looking further ahead, IGT said it expects annual revenue to fall between $4.6bn and $5.0bn by 2025.

“IGT’s industry leadership is built on a legacy of innovation and trust,” chief executive Marco Sala said. “Through greater player engagement, responsible management, and best-in-class content, services, and solutions, we are well-positioned for profitable growth.

“Our diverse portfolio aligns with attractive end-markets and our strategy is to grow, innovate, and optimise. 

“Over the next four years, we are confident we can deliver accelerating organic growth, significant margin expansion, and robust free cash flow to drive stakeholder value and increased shareholder returns.”

The announcement follows the supplier’s 2021 third-quarter results. IGT raised its full-year revenue guidance to $4.1bn after reporting growth across every business segment and product type in Q3, helping overall revenue grow 20.6% to $984m.

Digital and sports betting revenue during the quarter came to $43m, up 36.8%.