Slot Market Looking Up
The long-awaited improvement in the North American replacement cycle for slot
machines is finally happening, according to a survey by Roth Capital.
The survey shows that 7.5 percent of slot machines will be replaced this year
compared to 4.4 percent last year and the industry’s own expectations of 6 percent.
Assuming 7.5 percent of machines are replaced, it could add 13 cents a share to
IGT earnings, 22 cents to WMS and 17 cents to Bally, Roth analyst Todd Eilers
calculates.
The survey also found that WMS, Bally and Konami increased ship share in the
fourth quarter, with WMS improving its position by 9 percent, Bally 5 and Konami 4.
Those results could add 6 cents to BYI earnings. IGT could get a 4-cent boost as
it outperformed his expectations though its ship share shrank, Eilers said.
Looking forward, the survey suggests that WMS ship share will grow 10 percent in
the first quarter, BYI will grow 2 percent and Konami 5.
David Bain of Sterne Agee expects slot companies to say that calendar 2010
replacement sales will be better than 2009.
He also thinks Illinois VLTs will begin to come online with 2,000 to 3,000 units this
year and 10,000 to 15,000 next.