Illinois Gaming Board announced it will be rebidding the central system contract which will likely delay the rollout.



On August 12th, Scientific Games (SGMS) was awarded the contract to develop and run the central system for the video gaming network in that state.  The rollout of games was expected to begin sometime in Q1 of calendar 2011 and in earnest in 2Q2011.  Unfortunately, the rebid of the central system will likely delay the timing of initial shipments by at least a quarter.  Thus, there is a high probability that IL won't impact fiscal 2011 for BYI and WMS - both have June fiscal year ends - and maybe not even IGT's 2011 (September).  


The rebid should only affect the timing but not the opportunity.  We still expect at least 25,000 machines to be shipped into Illiniois and if Chicago signs up then up to 50,000, making Illiniois potentially the largest video game network in the country.  However, those looking for fiscal 2011 contribution for the big three suppliers may be disappointed. 


IGT has not yet provided fiscal 2011 guidance and the WMS and BYI FY2011 guidance contains only a very modest amount of revenues from Illinois given the uncertainty - timing and size and how many games will be straight sale versus lease has always been uncertain.  For the industry we had projected 1,500 and 2,500 in slot shipments to Illinois in calendar Q1 and Q2, respectively.  We don't anticipate any change to our fiscal 2011 EP estimate for WMS and only slight downside to BYI and IGT.

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