GGB is committed to providing updated news and analysis on our weekly news site, GGBNews.com.

Analysts: Suppliers to Compete for Smaller Floor

Analysts: Suppliers to Compete for Smaller Floor

As the industry’s suppliers seek to make up lost revenues after the months-long industry shutdown due to the Covid-19 pandemic, they face an uphill battle, because there will be fewer slot machines and table spaces as reopening casinos seek to guard the safety of customers and employees, according to an investor note from Union Gaming Securities LLC.

“We fear that less floor space post-reopening will lead to incrementally more competition for floor space and hurt supplier pricing power even further,” wrote Union analysts John DeCree and Sam Ghafir. “While the market largely expects reduced product sales, the risk to leased fees and participation rates is still unclear.”

The note singled out leading slot supplier IGT, which posted a net loss of nearly $248.3 million for the first quarter of 2020, compared with a $40.3 million profit in the corresponding period a year earlier.

“With casino operator budgets now constrained, IGT’s management has taken on multiple initiatives to preserve cash and weather the storm,” the analysts wrote, but added that they are “confident” that measures announced by IGT to cut costs, amend its revolving credit facilities and loan agreements, and end dividends—in combination with the group’s $2.2 billion of liquidity—“should provide ample resources to weather the storm and cover its modest near-term debt maturities.”

    Recent Feature Articles

  • The King of London

    British casinos took a giant leap forward when Simon Thomas and his father Jimmy took over the fabled Hippodrome theater in London and created a casino for the new world

  • Finally Florida

    With the U.S. Supreme Court denying an injunction, Florida was added to the list of states that have legalized sports betting with a monopoly for the Seminole tribe

  • Less Is More

    How to solve the staffing conundrum

  • Thunder Down Under

    Is the Australian gaming market primed for a resurgence?

  • Cashless Connections

    As several cashless payment solutions compete and, in many cases, partner, the path to cash-free gaming accelerates