We visited IGT Europe’s offices in Amsterdam to catch up on the latest news from the North American gaming machines and systems products giant. I met Kurt Quartier, Vice President of International Casino Markets, during one of his rare six-week jaunts to Europe. Earlier in the summer, Quartier had moved offices to Hong Kong to keep abreast of developments in Asia, the industry’s most aggressive market.

It’s always great to get a few lessons on how the gaming market is developing from people who are really in the know, especially when you have the chance to pin down someone whose business path takes him for a few weeks at a time from Macao to HK to Las Vegas to Europe to South Africa, and then all over again. Still, as Kurt said: “Getting on a long haul flight gives one a chance to switch off the blackberry!”

At the time, we had got the release of the figures posted for the company’s third quarter, when net income for the period had improved to US $136.4 million or US $0.41 per diluted share versus US $114.1 million or US $0.33 per diluted share in the same quarter last year, showing net income growth to US $385.6 million or US $1.14 per diluted share against US $358.8 million or US $1.02 per diluted share, year on for the nine-month period ended June 30.

Indeed, the records tumbled down as the third quarter statement showed: “Record revenues and gross profit up 15% and 19% respectively from the prior year; Record product sales up 23% to $364.6 million; Record gaming operations revenues up 9% to $341.9 million; Record gaming operations installed base of 58,200 machines; Record operating income up 26% to $216.3 million; Record Adjusted EBITDA of $291.4 million; Record year-to-date cash flow from operations of $564.9 million up 48%; and Repurchased 6.4 million shares at a cost of $248.8 million.”

Chairman and CEO TJ Matthews said at the time: “IGT’s record third quarter results reflect the power of our gaming operations business and strong double-digit growth in product sales. Year-to-date, we have generated US $564.9 million in cash flow from operations and returned US $742.4 million to shareholders in the form of share buybacks and dividends.”

After making significant inroads into China’s regulated gaming market, Matthews added: “This quarter we also made strategic investments in China LotSynergy Holdings and Digideal Corporation, and entered into a significant five-year cooperation agreement with Casino Club of Argentina. These important investments, coupled with our focus on maintaining IGT’s position as a leading worldwide provider of innovative gaming technology, will further expand both our product and geographic reach.”

Back in Amsterdam, we moved on to the matter of server-based gaming with a question that was top of my agenda. “How about the competition, there are so many companies offering server-based gaming, especially in South America. At the last expo in Bogota, Colombia, at least three European companies were offering server-based gaming products, with mouth-watering deals.”

Quartier said then: “Server based gaming is definitely the most popular buzzword these days and everyone, including many new startup companies, seem to have a system that claims to offer it. It’s important for people to know what to look for – the system should be built on a reliable and proven technology platform, using open GSA protocols. The system should also be able to provide you with the proven game content that your players love to play. And last but not least, a system that offers merely downloadable games, will not satisfy your players. True server based gaming will allow you to interact with your players at the gaming terminals in ways never before imagined.”

Since then the SBG debate has moved on to new territories, and last month during the SAGSE expo in Buenos Aires, Argentina, a debate on the subject brought together three of the major companies developing SBG, with viewpoints supporting Quartier’s position. Although it is early stages for the broad deployment of SBG products in the market place, operators must ensure that, when looking at these, essential ingredients like the GSA protocol is available as well as reputable certification. Most important though, the new gaming system does not come cheap and easy or on the back of online service providers.

Quartier’s comment is conclusive: “Our server-based gaming development initiative is one of the largest projects we’ve ever undertaken at IGT and is part of the reason why we are projecting to spend over US$ 1 billion in R&D in the next five years. Our main competitors are likewise investing a large amount of time and effort in this technology and I am convinced the outcome will be a truly more rewarding player experience on slot floors of the future!”

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