International Game Technology is shutting down its online poker operation in Europe after regulatory changes killed the business model.
IGT, the world’s largest slot-machine maker, is halting online poker overseas after some countries barred residents from playing with customers in other nations, Chief Executive Officer Patti Hart said today in a telephone interview.
The business “shifted from dot-com to dot-country,” Hart said. “There’s less profitability and the product becomes less interesting.”
IGT, based in Reno, Nevada, paid $115 million last year for Entraction Holding AB, a Swedish company that provided poker online in Europe. IGT still plans to offer online bingo, slot machines and sports betting in Europe, and is evaluating its staffing in the region, Hart said.
IGT fell 1.2 percent to $12.86 at the close in New York. The stock has declined 25 percent this year.
Europe provides a lesson for the U.S., where the legalization of online poker is proceeding on a state-by-state basis rather than at the federal level, Hart said.
Companies planning to offer online poker in the U.S. will “have to look at their own economics,” she said. “It’s much more challenged when it’s a single state.”
Nevada last year became the first state to authorize Internet gambling. Two dozen companies have sought licenses for online poker there, including Caesars Entertainment Corp. and MGM Resorts International, the largest operators of U.S. casinos.
Online gambling generated 24.6 billion euros ($32.1 billion) in revenue worldwide last year, with Japan, the U.K. and Germany the largest contributors, according to researcher H2 Gambling Capital.