The IGT vs. Ader battle has continued on as expected, with the latter one sending a letter to IGT shareholders claiming that the DoubleDown acquisition in January last year was “incredibly expensive”.
Minority shareholder Ader Group – seeking to add directors to the IGT board, including former CEO Charles Mathewson – has accused the current management of having lost focus of IGT’s core business by purchasing one of the major providers of games on Facebook.
Head of the group Jason Ader believes that the American slot machine maker has gone too far off course and should “to get back to basics in developing games for its casino customers in the U.S. and Asia” instead. “There is a big opportunity to pursue growth in Macau and the Philippines in the electronic table games segment,” added Ader.
Indeed, the purchase of DoubleDown, and thereby its portfolio of free blackjack and online poker games is a new experiment for IGT. New, but promising, as gambling and social gaming continues to converge.
Critics, however, are concerned that the specific niche in which DoubleDown operates – selling virtual gaming chips to circumvent real-money betting prohibitions – may be shrinking, as several US states are taking the initiative to legalize online gambling even if the American gambling laws remain unchanged on a federal level.
Still, as IGT CEO Patti Hart revealed in November 2012, interactive gaming contributed about 7% of overall company revenue last year – a strong growth from the 2% figure the year before.
At the same time the accusation is likely to find several listening ears among the shareholders, ahead of the annual meeting on 13 March. Considering that the value of IGT shares have dropped by 13% since the acquisition deal, the Ader argument seems to hold water. Some of those investing for the long term, however, have already indicated that they considered IGT’s social gaming investment a useful one.
The company promised to issue a response later this week. Various accusations and maneuverings like these are likely to keep appearing among American gambling news as the shareholders’ annual meeting approaches.