International Game Technology (NYSE:IGT), a developer of casino and lottery gaming equipment, has struggled in the last few quarters as revenues have slowed considerably as there has been less need for new machines in Las Vegas and Macau. However, with Las Vegas gaming revenues picking up again and casino expansion booming in Macau in the next two years, a boost from its social online gaming business, and IGT's coming merger with Italian gaming company GTECH, there are reasons that this stock could rise again. There's no guarantee which way the stock will go, but let's take a look at three things that could help the business and send the stock price up.

1. Renewed growth in Vegas and Macau
Lowered demand for new gaming equipment, particularly in the U.S., has reduced IGT's revenue in the last few quarters as the company hasn't been able to sell as many machines as it once did. With barely more than half as many gaming units sold in the last quarter compared to the same time the previous year, IGT reported revenue decreased 19% year over year. Yet the company was still able to grow net income by 10%, and if sales can increase again, there is reason to believe that the company can be even more profitable than before. If so, the share price should respond favorably.

Can IGT get more sales? In Las Vegas, total gaming revenues have begun to pick up again and some analysts are calling this the comeback of Las Vegas. Gross gaming revenue there is nearly back to its 2007 peak. If gaming revenue in Vegas is picking up again, casinos will once again start expanding in Vegas (as is already happening with the started construction of the newest megaresort, Resorts World Las Vegas). With that, there could be renewed demand for gaming equipment from companies like IGT.


Las Vegas GGR ($US)

(Strip + Downtown)

2004 5,996,791
2005 6,687,747
2006 7,319,307
2007 7,460,816
2008 6,708,983
2009 6,074,019
2010 6,269,962
2011 6,565,637
2012 6,716,374
2013 7,005,649
2014 Est. 7,236,327

Data: UNLV Center for Gaming Research

And while Las Vegas revenues are improving, it's still Macau that is bringing in the most total gaming revenue. While no new major casinos were opened in Macau this year, 2015 and 2016 are going to be boom years for the island as each of the four big names in the gaming industry have resorts planned to open on the Macau Cotai Strip in the next two years.

IGT is hoping to get in on this Macau growth. In August, IGT signed a deal with local gaming company LT Game Ltd. of Macau. In the agreement, IGT will manufacture slot machines that LT Game will distribute in Macau. Additionally, IGT will do the same for LT Game's live and electronic table games in the U.S. and Canada.

2. Social gaming
IGT has been winning in its interactive gaming division, where revenue increased 15% year over year to $83.1 million in the most recent quarter, primarily because of DoubleDown Casino, a social gaming website that also operates through Facebook. This follows the upward trend that social gaming has been on the previous quarters.

With a growing smart device market and social network growth, as well as consumers getting more comfortable with online gaming, this could be a great position for IGT to be in going forward. By producing more online and social games, and managing a diversified and broad distribution network throughout the world, these interactive segment revenues could be a major win for IGT's bottom line, and thus share value.

Source: IGT website.

3. The coming merger
IGT agreed to a buyout from Italian gaming developer GTECH S.p.A in July which, if it goes through as planned, is slated to bring IGT shareholders cash and stock valued at more than their IGT stock is worth today.

The companies will merge into a new company headquartered in the U.K. and trading in the U.S., likely under the GTECH name. The deal is not completed yet, and there are still hoops for the companies to jump through, however, progress on the deal looks promising and could be complete as early as Q1 next year.

As described by the companies, each share of IGT will at that time convert to a combination of $13.69 in cash, plus shares of the new company equal to $4.56. That $18.25 per share is about 8% higher than IGT's closing price on Sept. 24.   

Foolish final bet: IGT shares might be on the rise, but that comes with risk
With increased potential for regrowth in Las Vegas and the boom of new casinos on the Cotai Strip in Macau, the growth of IGT's interactive and social gaming, and a likely immediate increased value that will come with IGT's shares converting following the merger with GTECH, shares of IGT could be going higher in the coming quarters.

However, there are still things to watch out for. IGT needs to prove that it is going to be able to start selling units again, and that it won't miss out on the boom in Macau and the regrowth in Vegas. Furthermore, the deal with GTECH is not complete yet, and without it, shares of IGT might not fare so well as investors would worry that IGT has yet another competitor back on the market. Therefore, IGT shares could rise, but it might be best to keep watching for increased sales and how well the merger actually works out.

Bradley Seth McNew has no position in any stocks mentioned. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.