Online Slots Company Purchased by IGT

Published Tuesday, January 17, 2012 - 05:51

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In an unprecedented move by the US Justice Department, the legalization of gambling on the internet including online slots is now on the horizon. For the past 50 years federal authorities have interpreted the “wire act” as banning all types of wagering weather via phone, mail, or internet. Now, after inquires from many sates interested in setting up their own online gaming operations the US authorities now say this law only applies to sports betting.

On the heels of this announcement the Nevada-based company IGT (International Game Technology) has made a move to purchase Double Down Interactive, a maker of video games including slots online. The reason that IGT, one of the largest manufacturers of slot machines in the US is getting into the online slots marketplace is because they strongly believe that playing slots online will soon be legal in many US jurisdictions.

The deal between Double Down and IGT is estimated at approximately $500 million. The large purchase price reflects the amazing profit potential that IGT will have if Nevada becomes the first state in the union to legalize online gambling. Currently, players on sites affiliated with Double Down do not wager real money but instead play for points. This is a similar to a model used by other ‘social gaming’ companies like Zynga who developed popular Facebook games like Zynga Poker and Farmville. It is also a model that can easily be converted to a real money system with minimal costs.

Although IGT and other online slots developers are excited about the prospects of fully sanctioned online gambling in the US, hotel operators are not so sure. Sheldon Adelson, the chairman of Las Vegas Sands Corporation and the developer of the Venetian and Palazzo hotels, is worried that online gaming will cut into his revenue from the brick and mortar casinos and the lucrative hospitality and convention business. He has already hired lobbyists to make sure his interests are well represented in Washington DC and the Nevada legislature.

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