IGT Reaches Settlement with DoubleDown Interactive, Sees Q3 Charge of $120M
Posted on: August 29, 2022, 07:29h.
Last updated on: September 1, 2022, 12:56h.
International Game Technology (NYSE:IGT) announced today it reached an agreement in principle to settle legal claims stemming from the Benson v. DoubleDown Interactive LLC litigation.
![DoubleDown](https://www.casino.org/news/wp-content/uploads/2022/08/wof-142x95.jpg)
That suit is tied to IGT’s June 2017 sale of social casino developer DoubleDown Interactive (NASDAQ:DDI) to DoubleU Diamond LLC, which is a unit of the gaming company.
The agreement in principle, entered into by certain subsidiaries of IGT and DoubleDown, remains contingent on final court approval by the U.S. Federal District Court for the Western District of Washington,” according to a statement issued by IGT.
Under the terms of the settlement, IGT is paying $269.75 million into a settlement while DoubleDown is contributing $145.25 million. IGT took a $150 million related expense in the second quarter and said it will take a one-time charge of $119.75 million in the current quarter.
Drilling Down on Double Down
Though it has tumbled since its September 2021 initial public offering (IPO), DoubleDown has some advantages investors may not yet be aware of. For example, its content library features Fort Knox, Megabucks, and Wheel of Fortune — three of the most successful slots games of all time from the International Game Technology (IGT) stable. Plus, DoubleDown is an asset and capital expenditure light company.
The South Korea-based company did not comment on the extent of its current relationship with IGT in its own statement discussing the settlement.
Subject to final court approval of the settlement of the Benson v. DoubleDown Interactive LLC, et. al. lawsuit, IGT and DoubleDown have also resolved all indemnification and other claims between themselves and their respective subsidiaries and affiliates relating to the Benson Matters,” according to DoubleDown’s press release.
While the social casino investment thesis is largely overshadowed by iGaming and sports wagering, data confirms it’s on a torrid growth pace of its own, and DoubleDown is participating in that growth. Analysts also view the shares as inexpensive.
Benefits for IGT, Too
While the settlement won’t cost IGT billions of dollars, putting the issue to bed is nonetheless advantageous. It removes the potential for near-term headline risk while cleaning up the overall IGT investment thesis.
Market participants are watching the company’s debt reduction and capital return plans — the latter of which could include elevated dividends and buybacks. Additionally, the slot machine upgrade cycle and the company’s cash-generating lottery business could be catalysts for IGT stock going forward.
The company is also making inroads into digital gaming and sports betting. IGT’s newly created, dedicated iGaming and sports wagering unit could eventually be a spin-off candidate, as the company looks for other avenues to unlock shareholder value.
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Last Comment ( 1 )
I recieved my letter on this issue by mail and I'm here to put my claim in .