Cloud Computing  Sep 23  Comment 
Azul Systems, the award-winning leader in Java runtime scalability, announced today that it has signed a reseller agreement with Beijing Fortunet Information and Technology Co., Ltd. (Fortunet). Fortunet will be selling the Zing Elastic Software...
TheStreet.com  Jan 15  Comment 
Several stocks trading near $5 were moving on above-average volume during Friday's session.
StreetInsider.com  Jan 15  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Yuri+Itkis+Gaming+Trust+Announces+Tender+Offer+of+All+Outstanding+FortuNet+%28FNET%29+Shares+at+%242.25Share/5250300.html for the full story.
Globe Newswire  Jan 8  Comment 
LAS VEGAS, Jan. 8, 2010 (GLOBE NEWSWIRE) -- FortuNet, Inc. (the "Company") (Nasdaq:FNET) announced today that it has received approval from the Nasdaq Stock Market Listing Qualifications Staff to transfer the listing of its common stock from the
Globe Newswire  Dec 22  Comment 
LAS VEGAS, Dec. 21, 2009 (GLOBE NEWSWIRE) -- FortuNet, Inc. (the "Company") (Nasdaq:FNET) announced today that it received notice from The NASDAQ Stock Market that the Company's common stock failed to maintain a minimum market value of publicly held
Globe Newswire  Nov 24  Comment 
LAS VEGAS, Nov. 23, 2009 (GLOBE NEWSWIRE) -- FortuNet, Inc. (the "Company") (Nasdaq:FNET) announced today that its Board of Directors has received a notice from Yuri Itkis, as trustee of the Yuri Itkis Gaming Trust of 1993 (the "Trust") indicating
TheStreet.com  Nov 23  Comment 
Several stocks trading under $5 were moving on above-average volume during Monday's session.
Globe Newswire  Nov 23  Comment 
LAS VEGAS, Nov. 23, 2009 (GLOBE NEWSWIRE) -- The Yuri Itkis Gaming Trust of 1993 (the "Trust") announced today that it intends to make a tender offer for all of the outstanding shares of Common Stock of FortuNet, Inc. (Nasdaq:FNET) not already owned
Globe Newswire  Nov 12  Comment 
LAS VEGAS, Nov. 11, 2009 (GLOBE NEWSWIRE) -- FortuNet, Inc. (the "Company") (Nasdaq:FNET) today filed with the Securities and Exchange Commission its quarterly report on Form 10-Q for the quarter ended September 30, 2009. The Company's revenue
Globe Newswire  Oct 22  Comment 
LAS VEGAS, Oct. 21, 2009 (GLOBE NEWSWIRE) -- FortuNet, Inc. (the "Company") (Nasdaq:FNET) today announced that it has withdrawn its application with the Nevada State Gaming Control Board for the approval of the Company's current mobile gaming system


FortuNet (NASDAQ: FNET) makes electronic bingo game machines.[1] The company is waiting for approval from Nevada gaming authorities for a new line of wireless gaming platforms, on which both bingo and more traditional casino games will be played.[2] If approved, the new machines will diversify the company's product line, and customers will be able to do business with FortuNet for both electronic bingo game machines and wireless casino games.

FortuNet's 2007 revenue was $16.49 million, showing no growth from its 2006 figure of $16.46 million.[3] The stagnancy can be attributed to the lack of consumer spending that caused the entire casino industry to struggle in fiscal 2007. Slow consumer spending resulted from a strain on disposable income due to trends such as rising oil prices and a struggling U.S. housing market. This limited growth in the casino industry, which FNET depends upon for its revenues.[4]

Business Overview

FortuNet designs and manufactures electronic gaming platforms and related management systems. The company does not separate its revenue into separate segments in its 10-K report, but offers a wide range of different products:

  • The majority of FortuNet's products fall under the Wireless and Stationary Player Terminals category. These terminals are used to play FortuNet's electronic bingo games and other casino games. As of 2008, the company's wireless terminals are not completely in circulation, as FortuNet is seeking approval for many of these wireless devices for the playing of more traditional electronic casino games.[2]
  • The BingoStar Electronic Gaming Platform enables players to play many variations of bingo and other entertainment games such as solitaire. This platform lets players play over 4,000 bingo cards (yielding higher revenues bingo hall/casino operators) and runs on FortuNet's wireless and stationary terminals.[5] FortuNet is working on releasing a new line of bingo products under the Smart name. The products manufactured under this name include bar coded bingo balls and paper bingo cards, and automatic bingo ball blowers, with plans for release in late 2008.[6]
  • Accounting and Inventory Management System (AIMS) is an accounting and inventory management software package that runs on FortuNet's central game file servers and POS terminals. The AIMS software package performs operational tasks such as tracking players' spending and calculating payouts and awards owed to the bingo players.[5]
  • WIN-WIN Mobile Gaming Platform is the brand name under which FortuNet markets mobile casino gaming platforms. These platforms are comprised of central game file servers, gaming software, wireless player terminals and POS terminals/kiosks. As of 2008, FortuNet is still working on getting its WIN-WIN products approved by the Nevada gaming authorities, after which they will be ready for deployment.[5]
  • Redundant Central Game File Servers are internally developed, PC-compatible computers that enable the concurrent playing of bingo games and traditional casino games. In addition, the central game file servers are responsible for generating random factors to determine game outcomes, and preserving game histories.[7]
  • Cashier-operated POS terminals and self-service POS kiosks are machines at which players make money deposits and receive their winnings. POS terminals are operated by a human cashier while POS kiosks are wholly automatic machines. FortuNet obtains more business for its self-service kiosks, as they save operators from labor costs and tend to cause shorter wait times.[8]
  • FortuNet's mobile casino gaming platform runs on its Wireless Communication Technology. The company's communication hardware and software deliver data securely and reliably to and from wireless player terminals.[9]
  • Software Packages enable FortuNet to rapidly customize its gaming packages to meet regulatory requirements. Its software packages are designed to provide multi-game, multi-player functionality, enabling both existing games and new traditional casino games to be downloaded to the wireless player terminals.[2]

Business Financials

FortuNet Revenue and Income ($ in millions)
Segment 2007[3] 2006[3] 2005[10] 2004[10] 2003[10]
Revenue 16.49 16.46 14.68 14.33 14.29
General and Administrative 4.62 6.46 3.55 4.04 3.77
Sales and Marketing 4.93 5.30 4.38 3.93 3.94
Research and Development 0.53 0.65 0.93 0.37 0.48
Total Operating Expenses 10.09 12.41 8.86 8.34 8.19
Operating Income 3.94 1.92 3.50 3.76 3.92
Net Income 3.95 2.03 2.23 2.34 2.24

FortuNet found itself in a slight slump in 2007, with its revenue increasing by only $.03 million from its 2006 numbers.[3] This stagnancy can be attributed to a number of factors, including decreasing disposable income,[11] the struggling casino industry,[4] and an inability to expand on its already limited list of markets (98% of business domestically).[12] However, FortuNet expects its business to recover in 2008 onward, as its wireless traditional casino game platforms become enabled by Nevada gambling authorities.[2]

Furthermore, FortuNet's 2006 operating income was about half the value of its other years' because its operating expenses were unusually high that year. In fact, the total operating expenses were 18.7% lower in 2007 than in 2006. In 2006, operating expenses were higher in all three of FortuNet's expense segments: General and Administrative, Sales and Marketing, and Research and Development.[3] These skewed numbers can primarily be explained by the company's large emphasis on researching new technology for its wireless player terminals[13] and the company's transition from a private to a public company in that year.[14]

Key Trends and Forces

Governments moving toward more favorable gambling regulations

FortuNet can only operate in regions that have legalized electronic bingo, which faces far stricter government regulations than many other forms of gambling, especially paper bingo. As of 2007, 27 of the 50 states in the United States permit electronic bingo, compared to 48 who permit paper bingo. The number of markets who legalize electronic bingo has grown steadily in the decade preceding 2007, as all tribal jurisdictions and United States Armed Forces bases permit it, along with the aforementioned 27 states and a growing number of foreign jurisdictions.[15] As of 2007, FortuNet's primary U.S. markets are Nevada, Texas, and Washington state, all of which have favorable gambling regulations.[16] However, the electronic bingo market continues to have problems gaining acceptance in certain markets, such as Colorado and Alabama, which deprives FortuNet of some of its business.[17][18] Furthermore, the new Nevada regulations permitting FortuNet to release its new line of traditional electronic casino games is expected to increase its revenue as well.

Economic cycles that decrease disposable income hurt the gambling industry

In 2008, domestic disposable income suffered from an overall struggling economy. This contributed to shaky consumer confidence, which has sent the Applied Analysis Gaming Index, which includes casino operators and gaming machine manufacturers, down by 15.7 percent in January 2008.[4] FortuNet was one such gaming machine manufacturer that suffered, as this trend helped force the company into its 2007 economic slump.

FortuNet depends on a few specific markets for the majority of its revenue

Although FortuNet's new electronic traditional casino games figure to expand its clientele, it obtained 34% of its 2007 revenue from sales to charitable organizations in Texas. Furthermore, even though FortuNet is expanding its international clientele, it obtained 98% of its revenue domestically every year from 2005-2007, with most of its business coming from Texas, Nevada, and Washington state.[12] If there is a change in government regulations in any of these states, FortuNet's business will suffer and there will be substantial losses in revenue.

Customer preferences shifting towards electronic casino games

As of fiscal 2007, customer preferences have begun to shift away from traditional table games and towards electronic casino games.[19] In 2008, casinos nationwide continued to follow this trend, implementing high-tech game systems, wireless customer-service features, and other technologically advanced services. The shifting preference towards electronic games in casinos, racinos, and bingo halls benefits FortuNet because its entire product line is made up of electronic bingo games.[20] Furthermore, as of 2008, FortuNet is planning to develop a line of more traditional electronic casino games, such as video poker and slot machines, both of which will also benefit from this trend. Nevertheless, FortuNet's revenue growth was flat from 2006 to 2007 because of factors such as a struggling casino industry.


As an electronic bingo game manufacturer, FortuNet primarily competes with other electronic bingo game makers. However, FortuNet also heavily competes with manufacturers of other electronic casino games for valuable floorspace in casinos. Its competitors include:

  • GameTech International (GMTC) is primarily a manufacturer and distributor of electronic bingo machines. However, it also introduced its video lottery terminals (VLTs) segment in 2007. This segment consists of electronic games such as slot machines and video poker that figure to let GameTech become a player in the Class III gaming market. Thus, GameTech competes with both FortuNet's current line of electronic bingo machines and the other electronic casino games it hopes to manufacture in the near future.[21]
  • International Game Technology (IGT) manufactures electronic casino games, and is the market leader for slot machines with a 70% share of the North American market. In addition to simple slot machines, IGT also manufactures video poker games and other electronic games, thus competing with FortuNet for floorspace in casinos. IGT has an advantage over FortuNet due to its wider range of products, as it produces network systems for operating casinos in addition to its large list of various electronic games.[22]
  • WMS Industries (WMS) is an American electronic gaming company that initially specialized in the manufacturing of pinball machines. Since then, WMS has added popular casino slot machines such as Reel 'em In and Jackpot Party to its list of products. With these games, WMS Industries competes with FortuNet in the manufacturing of electronic gaming products.[23]
  • Bally Technologies (BYI) is another manufacturer of slot machines and other electronic casino games, such as Easy Lotto and Millionaire Sevens. As a result, Bally is another company whose products compete for casino space with the less popular bingo games produced by FortuNet, and figure to offer more direct competition as FortuNet tries to establish itself in the market for electronic casino games.[24]
Company 2007 Revenue ($ in millions) 2007 Operating Income ($ in millions) 2007 Operating Margin
FortuNet[25] 16 4 23.93%
GameTech International[26] 59 9 15.09%
International Game Technology[27] 2,621 800 30.53%
WMS Industries[28] 540 74 13.75%
Bally Technologies[29] 682 67 9.82%


  1. FNET 2007 10-K, Item 1: Business, page 5
  2. 2.0 2.1 2.2 2.3 FNET 2007 10-K, Item 1: Business, page 7
  3. 3.0 3.1 3.2 3.3 3.4 FNET 2007 10-K, Item 8: Financial Statements and Supplementary Data, page 40
  4. 4.0 4.1 4.2 ReviewJournal.com: Casino-stock index declines during January
  5. 5.0 5.1 5.2 FNET 2007 10-K, Item 1: Business, page 6
  6. PrimeNewswire: FortuNet Introduces New Products At the Global Gaming Expo in Las Vegas
  7. FNET 2007 10-K, Item 1: Business, page 6-7
  8. FNET 2007 10-K, Item 1: Business, page 7-8
  9. FNET 2007 10-K, Item 1: Business, page 8
  10. 10.0 10.1 10.2 FNET 2005 10-K, Item 6: Selected Financial Data, page 35
  11. Inflation Data: Historical Oil Prices
  12. 12.0 12.1 FNET 2007 10-K, Item 1: Business, page 10
  13. FNET 2006 10-K, Item 1: Business, page 4
  14. FNET 2006 10-K, Item 7: Management's Discussion and Analysis of Financial Condition, Page 48
  15. FNET 2007 10-K, Item 1: Business, page 11
  16. FNET 2007 10-K, Item 7: Management's Discussion and Analysys of Financial Condition, page 30
  17. Ethics & Religious Liberty Commission: State’s electronic gambling battle continues
  18. New York Times: Still Your Grandmother's Bingo, but Supercharged
  19. SeekingAlpha: International Gaming Technology: Clear Leader in a High-Growth Industry
  20. Native American Times: Downstream Casino Resort Goes High-Tech
  21. Wikinvest: GMTC
  22. Wikinvest: IGT
  23. WMS Industries: About WMS
  24. Bally Technologies: Company Information
  25. Google Finance: FNET
  26. Google Finance: GMTC
  27. Google Finance: IGT
  28. Google Finance: WMS
  29. Google Finance: BYI
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