IGT to Shut Japan Operations

Leading slot manufacturer International Game Technology will close its beleaguered pachisuro operations in Japan, according to a filing the company made last month with regulators.

In the filing, the company said the operationswill close “due to ongoing difficult market conditions
and changes in the company’s future core business strategy. The closure is part of the company’s ongoing focus on operating efficiencies in all areas of its business.”

IGT’s Japan operation, which involves supplying and servicing pachisuro parlors with IGT gaming machines, recorded a net loss of $21.2 million last year, and a loss of $2.5 million for the first quarter of this year. First-quarter revenue was only $100,000, compared to $5.7 million for the same period last year.

“Total charges related to the closure are still developing and will depend on the culmination of certain asset sales and property lease cancellations,” the company said in its filing. “We currently estimate charges, including severance, of up to $20 million in the aggregate will be recorded in the second and third quarters of fiscal 2010.”

The filing also noted that new casino openings in Ohio, Kansas, Pennsylvania and Maryland over the next two years will more than make up for money lost in the Japan operations. “Future gaming expansion is also anticipated in international markets, especially Southeast Asia and Italy,” the company said. “Although the extent and timing is uncertain, we believe new market opportunities will grow as the economy improves and new jurisdictions consider gaming tax revenues as a means to address budget shortfalls.”