International Game Technology Agrees to Purchase Double Down Casino

International Game Technology (IGT), the worldwide leader in designing, developing and manufacturing gaming machines and related products, has reached an agreement to purchase Double Down Interactive LLC, an industry-leading online gaming company focused on the social aspects of internet gaming in its operation of Double Down Casino on Facebook.

Since launching in April 2010, Double Down Casino has become the largest online casino in the world with 4.7 million active monthly users, according to AppData. Online gamers are flocking to the site in droves through Facebook, as only three months ago, its player base numbered 3.3 million. Double Down Casino offers free blackjack, roulette, video poker and slots to social gamers who can enjoy their favorite casino games without risking a penny.

The purchase price of $500 million is broken down into three sectors, with $250 million payable in cash, another $85 million due over the coming two years in retention payments, and the final $165 million set to be paid in a three-year span pursuant to Double Down achieving particular targets in performance. The final acquisition price may fall below $500 million depending on whether or not Double Down meets the unspecified targets. It is expected that IGT will fund the purchase from available cash on hand.

“The addition of Double Down launches IGT into a leadership position in social gaming, extends our global reach through new mediums and leverages our unmatched expertise in game development,” said Patti Hart, IGT’s Chief Executive Officer, in a statement released by both companies. “We intend to drive meaningful value from this rapidly growing distribution platform that reaches a new but complementary demographic of gamers.”

Players at the Double Down site don’t bet real money, instead earning points as they compete against other players or versus an automated player or machine. However, the acquisition by IGT is seen by industry analysts as a precursor to potentially offering online casino wagering for money. Online gambling is still mired in legal uncertainty in the U.S., but the recent U.S. Department of Justice decision stating that the 1961 Wire Act pertains only to sports betting has individual states such as Nevada and New Jersey taking steps to provide internet gambling on an intrastate basis in the very near future. With the acquisition of Double Down, IGT is betting on Facebook being a dominant platform on which to launch real money online casino wagering. If legalization should not be passed in the U.S., but most gaming experts agree that it eventually will, IGT can perhaps still rely on the more than 30 other countries where Double Down currently operates.

“Double Down and IGT share complementary cultures focused on innovation and creativity,” Double Down CEO Greg Enell said in the companies’ joint statement. “Both companies are committed to providing unrivaled quality, service and entertainment to millions of players. Leveraging IGT’s research and development, global reach, and best-in-class content will provide our loyal player base with an even more robust experience and is expected to augment Double Down’s growth trajectory.”

Based on surveys of its users, Facebook has pegged Double Down Casino as ranking fourth on the social site’s list of most popular games last year. Three months ago, Double Down was believed to be generating approximately $140,000 in daily revenue. That figure is certain to be much higher today, with new social gaming players signing on in huge numbers as of late.

IGT is based in Nevada, but has offices all over the world. It has manufactured about half of all the slot machines found in American casinos. The company’s yearly revenue is close to $2 billion.