IL approvals ring in their second best month
The Illinois Gaming Board (“IGB”) released a list of all licensees, which included 1,554 licensed establishments, implying the approval of 275 incremental establishments, marking the 2nd biggest month of approvals behind December.
To date, there have been no establishment licenses revoked and 100 establishments have been denied licensure. There has been one terminal operator who had its license revoked along and 24 terminal operators and 2 manufacturer that have been denied licensure. Currently, there are 2,420 establishments pending approval, a 7% decrease from February.
Each location can have a maximum of 5 machines so 1,554 approved locations imply a current maximum market size of 7,770. There were 4,353 machines online in February, up from 3,394 in January. VGT revenue in January rose to $13.6 million February from $9.78 in January. It looks like average win per day in February was around $111/day.
We stand by our prior estimate of a 10,000 unit market by the end of 2013. We expect that most of the VLT sales (upwards of 75%) will come with some sort of financing, but the vast majority will be accounted for as for-sale units.
Our understanding is that ASPs should be around the $12k range. We believe that distributors receive a 10-15% cut of the purchase price as their commission, with the big suppliers paying on the low end of that range and some of the smaller guys paying at the higher end of that range. Typically, distributors take the machines on a consignment basis, meaning that suppliers cannot recognize revenues until the machines are placed in the establishments.
DETAILS ON PENDING APPLICATIONS:
Manufacturer: 2 (Speilo and Konami)
Terminal handlers: 133
Terminal operators: 10
Establishments: 2,420 pending