tech's video lottery subsidiary, Spielo, will develop and deliver the central system and terminals, and provide ongoing support and game development to Svenska Spel. This announcement follows a competitive procurement process.
"Svenska Spel, one of the most innovative lotteries in the world, will be the first of our lottery customers to take delivery of our next-generation video central system," said W. Bruce Turner, Lottomatica and Gtech CEO. "The new system gives Svenska Spel the flexibility of traditional game configurations as well as server-based gaming. It also enables expanded functionality beyond the delivery of video game content, to include a browser to play the lottery's online offerings, and the ability to deploy third-party content on the IVTs."
Server-based applications operate by connecting all IVTs in a gaming operation to one central server. Svenska Spel will have the ability to download new games automatically to the IVTs or operate the terminals in a true server-based configuration. Through enhanced reporting and analytics, it will also receive real-time data regarding game popularity to enable optimized revenue and game life cycle management. In addition, server-based gaming eliminates the need for players to switch terminals for new games by offering a diverse game package on each terminal.
Under the terms of the five-year contract with Svenska Spel, Spielo will replace the existing system with its new Integrated Game Management System. In addition, during the term of the contract, Svenska Spel expects to replace approximately 5,300 of the 7,300 video lottery terminals (VLTs) already in operation.
Spielo has the right to provide no less than 50 percent of the replacement terminals, or a minimum of 2,650 WinWave terminals, and a minimum of 50 percent of the game content. Spielo expects the new system to be operational by July 2008.
With respect to its participation arrangement with Svenska Spel, Gtech, through its subsidiary, Spielo, expects to receive revenues of approximately euro 16 million over a five-year period. In addition, Gtech, through its subsidiary, Spielo, expects to receive approximately euro 21 million from the sale of the IVTs, associated hardware and game content.