Online activity sees WMS revenues soar

Posted on November 2, 2012 by t.washington

Chairman and CEO Brian Gamache predicts annual revenue from interactive to reach at least $35m in fiscal 2013

A US$9m year-on-year growth in revenue from interactive products and services has seen WMS Industries record first quarter turnover of US$159.1m.

In its first set of results since making two online acquisitions earlier this year, WMS Brian Gamache chairman and CEO said the company was generating “very exciting” growth from interactive products.

Its online products and services revenue, that now sits within a separate division entitled William Interactive, increased to $9.5m for its fiscal first quarter of 2013 from $0.7m in the same period in 2012, primarily reflecting the launch of Jackpot Party social casino on Facebook in July this year.

Organic growth in WMS’s UK-based B2C online website and the addition of the newly-acquired Phantom EFX and Jadestone businesses were also cited as major contributors to the boost in revenues.

“We are extremely pleased by the initial success we are achieving in leveraging the value of our library of proven gaming content into the interactive markets, including social, casual and mobile entertainment,” said Gamache. “This success is reflected in the $9m year-over-year growth in revenue from interactive products and services, and we anticipate a range of $35-to-$40m in annual revenue for fiscal 2013 from these revenue streams.

“While the costs needed to build a sustainable foundation for interactive products and services impact near-term operating profitability, we believe this investment favorably positions WMS to participate in the attractive, high-margin growth potential of these opportunities that can lead to the creation of new value for our shareholders.”

Williams Interactive CEO and president, Orrin J. Edidin (pictured), said in yesterday’s Q1 earnings analyst call: “If you consider the approximate $34m all-in cost to acquire Jadestone and Phantom, add in the $18m of costs to originally license the IP and create a technology foundation for our jackpotparty.com online platform several years ago, and then add in the expense we incurred over the past two years and the expected $30m to $35m in incremental expense that Scott mentioned for fiscal ’13, you’d see that the total investment for WMS to enter these three new revenue streams was much less than $100m spread over multiple years.

“…we believe the foundation we’re building today in interactive products and services will be an important contributor to the WMS revenue stream and profitability story over the next several years.”

Overall the company, that specialises in the manufacture of lottery terminal and slot machines, saw revenue from gaming operations grows 4% to $71m compared to the same period last year, while gross profit increased by $4.1m.

The past 12 months have seen WMS establish a varied online business, launching a separate division entitled Williams Interactive to manage the offering in July this year.

Later that month, the Jackpot Party-branded social casino on Facebook was launched, followed by the Nevada licenced WMS signing a strategic alliance with Dragonfish, the B2B arm of 888 Holdings, aimed at allowing it to offer 888’s online poker product to US casinos.

In April it announced that Jackpot Party would host Groupe Partouche’s Belgian-facing casino offering, where the operator is one of just four to hold a top-level ‘A+’ licence.

In September WMS launched its freeplay casino product Play4Fun Network with its first client, a tribal casino in Iowa, enabling the casino’s players to access multiple play-for-fun slot and casual games online, all under the casino’s own brand.

Meanwhile October saw the company sign multi-year licensing agreements with Swedish operators Betsson and Unibet Group. The deal allows Betsson and Unibet access to WMS’ games offered by Jadestone, following May’s acquisition of the Swedish games developer. The portfolio also includes games offered by WMS’ UK-facing site Jackpot Party which went live last year.

WMS forms new egaming division

Posted on July 17, 2012 by t.washington

Chicago-based Williams Interactive will be headed up by WMS president Orrin J. Edidin

WMS has announced the formation of Williams Interactive, a wholly owned subsidiary that will focus on expanding and developing its egaming services.

The new entity will be headed up by Orrin J. Edidin, president of WMS Industries, who has been promoted to the position of president and chief executive officer of Williams Interactive.

Williams Interactive will concentrate on its online wagering, social, casual and mobile gaming offerings in order to “capitalise on the emerging industry’s significant potential growth opportunities by supporting casinos’ participation in these new distribution channels”, WMS said in a statement.

Brian R. Gamache, chairman and CEO of WMS Industries, added: “Establishing Williams Interactive is an important step forward in concentrating our efforts and increasing our collective ability to leverage our operational and development initiatives to propel growth and returns to the next level.”

In the last few years WMS has built a suite of egaming services aimed at supporting the online efforts of its land-based customers. Its operations include B2C online casino JackpotParty.com and a B2B online casino site in Belgium in collaboration with Groupe Partouche.

More recently WMS strengthened its egaming credentials by acquiring online gaming content developer Jadestone Group and Phantom EFX, a leader in social and mobile game development with a suite of more than 35 casino and slot products developed for desktop, Facebook, and mobile.

Earlier this month the company also announced a strategic alliance with Dragonfish, the B2B arm of 888 Holdings, to pursue both social and real-money online poker in the US, when legally permitted.

WMS is one of more than 30 companies to have applied for an interactive poker licence in the state of Nevada, although its application has yet to be given a place on the state’s Gaming Control Board agenda.

Newly appointed Williams Interactive president and CEO Orrin J. Edidin added: “Creating a single organisation to unify the company’s efforts in online wagering and interactive gaming distribution channels, while drawing upon our extensive existing library of great gaming content, will better enable WMS to participate in the many high-margin opportunities this content convergence offers.

888 announces WMS partnership

Posted on July 2, 2012 by t.washington

Operator signs second major partnership in the US – will see launch of free-play offering ahead of intrastate or federal legislation

888 has announced its second major partnership in the United States, signing a deal with WMS Gaming which will see the solutions provider offer 888’s online poker product to land-based casinos in the market.

The product will initially only be available as a free-play solution, but will allow casinos to launch real-money poker once federal or intrastate regulation is passed, and licences have been secured.

Commenting on the deal 888 CEO Brian Mattingley (pictured) said: “WMS is one of the main gaming suppliers in America, with a network of relationships with land-based operators that is second to none. The combination of 888′s cutting edge online poker platform and WMS’ customer relationships, marketing and distribution capabilities, provides the opportunity to build a substantial online presence.

“By deploying our joint online poker solution, casino operators in the United States will be able to provide their customers with a robust and secure network with the liquidity and games offering to give the best possible player experience,” Mattingley explained.

WMS president Orrin J. Edidin said that the deal would be invaluable for land-based operators looking to move online, explaining: “Aligning our efforts with 888 Holdings will allow WMS to provide our casino operator customers with the capabilities and benefits from one of the world’s most experienced online poker operators which will significantly support their efforts to benefit from online poker in the United States as it becomes legal.”

Following the announcement of the deal analyst Nick Batram of Peel Hunt reiterated his firm’s ‘Buy’ recommendation, explaining that the deal gave 888 scope to further enhance its US presence: “It is possible that the relationship with WMS could be developed further, the US group’s other partners include brands such as Hasbro, Warner Bros, Fremantlemedia and CBS,” adding that “There is no mention of the word exclusive and this is very much 888’s strategy in the US.”

“Whilst the true value of the deal with WMS will only be realised if online poker legislation develops positively, the deal reflects the growing presence of 888 in the online gaming market,” he concluded.

Both 888 and WMS have submitted applications for Nevada licences, with 888 having already secured approval from the state’s Gaming Control Board and Gaming Commission for its existing deal with Caesars Interactive – the first partnership between a Nevada-licensee and a foreign egaming operator. The deal – first signed in September 2009 – originally only covered Caesars’ European-facing poker operations, but was extended to cover the US market in January this year.

It follows Mattingley’s admission that the operator was in talks over a “nationwide” B2C deal and it further strengthens the operator’s foothold in the US market, and continues the company’s impressive turnaround under the operator’s former deputy chairman.

Since taking over from Gigi Levy, who has now also stepped down from the 888 board, Mattingley has overseen three consecutive quarters of record revenues, resulting in his official appointment as group CEO in March this year.

Mattingley has been bullish about 888 being the first operator to launch in the US market, with the company also in talks with a number of other casino groups including Trump Entertainment to acquire additional B2B clients and launch its own poker offering.

WMS acquires social casino games developer Phantom EFX

Posted on June 18, 2012 by t.washington

Acquisition for unknown amount follows Jadestone acquisition last month

Gaming machines manufacturer WMS Gaming has acquired Phantom EFX, a leading publisher and developer of interactive casino and slot games, for an undisclosed sum.

Phantom EFX, otherwise known as Genesis Communications, was founded in 1998 and has a suite of over 35 casino and slot products developed for Facebook, mobile, iOS and PC.

Prior to today’s announcement the two companies had worked together for more than a year to create and distribute slot games for digital, mobile and retail platforms.

The deal is the second in as many months for WMS as it expands its egaming capabilities, with last month seeing the company agree the acquisition of Swedish developer Jadestone Group.

Orrin J. Edidin, president of WMS, said the Phantom EFX deal, along with its recent agreement with Groupe Partouche for a WMS-hosted Belgium online casino and last year’s move into online under the UK-facing Jackpot Party brand, positions WMS as a “premier partner for casinos and gaming companies seeking a proven and integrated strategic approach” by creating a full complement of interactive solutions.

“We are focused on supporting our customers as they engage their player base beyond the four walls of the casino. Customers can count on WMS to evolve with them and help them move forward with confidence to stay connected to their players, wherever and however players find it most convenient to seek out gaming entertainment today and in the future,” Edidin said, adding that “Together we will focus on creating the industry’s most creative and comprehensive suite of interactive products and capabilities.”

WMS in Jadestone acquisition

Posted on May 22, 2012 by t.washington

Deal, for unspecified amount, comes five months after Swedish group’s management buyout

Land-based gaming machines manufacturer WMS Gaming has continued its move into online with the acquisition of Swedish developer Jadestone Group for an undisclosed sum.

The deal, aimed at enhancing WMS’ existing portfolio, is described in a release from the company as a “tuck-in acquisition” and comes just five months after Jadestone completed a management buyout from former parent company PAF.

Jadestone signed a two-and-a-half-year casino deal with Betsson in March this year, and also has B2B agreements in place with the likes of Betfair, bwin.party and Unibet.

The deal allows WMS to build on last year’s move into online under the UK-facing Jackpot Party brand, while last month saw the company agree to host Groupe Partouche’s Belgian-facing casino.

It has also applied for a licence in the Nevada egaming market, while February saw the US-based company launch its Lucky Cruise social casino on Facebook.

WMS president Orrin J Edidin said of the acquisition: “With a proven management team and a decade of experience in development and platform integration for online gaming industry leaders, Jadestone brings a complementary mix of expertise and technology solutions to WMS.”

Robert Henrysson, Jadestone’s chief executive, showed his enthusiasm for the deal, saying: “Combining our entrepreneurial creativity with WMS’ culture of innovation sets an exciting next stage in our business development.”