Bally Technologies Inc. (BYI), International Game Technology (IGT): Online Gaming Is the Growth Opportunity for the Gambling Industry

WMS Industries Inc. (NYSE:WMS) is the smallest of the lot, and is the only one to achieve growth in revenues over the crisis period. The company has also improved its margin over the years through controlling costs. The company spends the highest proportion of revenues in R&D, which would likely enable it to show strong growth in the coming years. Like Bally Technologies Inc. (NYSE:BYI), WMS is also highly dependent on the domestic market, but the company plans to enhance its international presence in the coming years. The company is also investing heavily in its online gaming operations through various agreements to make its games available online in the US and European markets.

Conclusion

I believe there are ample opportunities for growth for all three companies, specifically in Asia and from the online gaming market in the US. Among the three, International Game Technology (NYSE:IGT) will outperform its peers — it has the greatest presence in the international market, and also has the most active users of its online games and online gaming platform, particularly from North America, which saw revenues increase to $88 million in 2012 from less than $500,000 in 2011. Its strong brand name and international presence will continue to bring in additional revenues from Asian markets. For this reason I will give a buy recommendation for International Game Technology, as it offers high growth potential as well as an attractive dividend yield.

Hussain Asghar has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Online Gaming Is the Growth Opportunity for the Gambling Industry originally appeared on Fool.com.

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