One year after International Game Technology (IGT) acquired the Entraction Poker Network for $115 million along with more than 4 million players, the world’s biggest slot-machine maker has shut down its poker operation and advised online poker providers to switch to an alternative network by December 11th.
At the heart of IGT’s decision are the tougher regulations adopted by several European countries, which now only allows poker players to gamble with other players in the same nation. As IGT Chief Executive Officer Patti Hart explains, Europe’s online poker business has “shifted from dot-com to dot-country,” and there is now “less profitability and the product becomes less interesting.”
However, the company said it will still provide its range of other online gaming services to Europe, including slot machines, bingo and sports wagering.
The surprise news came a few months after IGT received an interactive gaming license from the Nevada Gaming Commission, paving the way for its operation in the US state. Nevertheless, a company statement explained that IGT’s decision was “purely focused on our European dotcom business and does not impact future decisions regarding entry into new markets.”
IGT said it now intended to use its Entraction technology platform in conjunction with its Nevada online poker systems. However, IGT warned of potential troubles ahead due to the similarities between the US single state online poker model and that of Europe, commenting: “It’s much more challenged when it’s a single state..[which will now] have to look at their own economics.”
After International Game Technology’s decision was announced, shares in the company fell 1.2% to $12.86, giving it a market capitalization of $3.43 billion. Shares in IGT have now declined by 25% from its 52 week peak of $18.17.