International Game Technology’s purchase of Seattle-based Double Down Interactive, a developer of casino-style Facebook games, is starting to pay dividends. In the slot machine giant’s earnings report today, IGT said that revenues increased 13 percent largely due to the growth of the company’s interactive unit, which includes Double Down.

Without the interactive businesses, revenue would have been flat in part due to what the company calls an “elongated and protracted” economic recovery as well as intense competition across its more traditional slot business. Meanwhile, excluding the interactive businesses, IGT saw revenue per unit drop four percent to $50.20.

In a call with analysts, CEO Patti Hart said that the IGT interactive business, including Double Down, is “performing out ahead of where we expected it to be at this point.”

But there are warning signs ahead for Double Down, which has been rapidly expanding its staff in Seattle in recent months. Double Down’s monthly user base stood at 5.2 million during June, a seven percent drop over the previous month. And IGT’s gross margin took a hit because of the interactive offerings, which are requiring more investment and causing some analysts to wonder whether IGT might have to take an impairment charge on Double Down.

Double Down’s bookings per daily users increased a penny to 25 cents, and the company noted that they just “wrote-up” the expected payout related to the social gaming unit. That’s a signal that the business is improving, not in any way declining, said IGT Chief Financial Officer John Vandemore.

IGT launched its slot title Da Vinci Diamonds earlier this year in the Double Down Casino, and it is planning to release new interactive titles in the next two months from its gaming library.

IGT’s Vandemore said they are “extremely pleased” with the bookings per daily user, calling them “among the best in this market on the Facebook platform.”

Hart added that the new titles from IGT will be repurposed from its existing “game library,” marking the fastest and lowest cost manner to push its content out to customers.

Another key focus: Mobile.

“It is all about mobile, mobile, mobile for us in the Double Down area,” said Hart. “In order to really take us from our daily and monthly average users to where we want to go, it is going to require two main things: It is platform reach and language conversion. Those are the two things that we need, to kind of break through to the next level.”

DoubleDown President Glenn Walcott in the KIRO-FM studios. (Erynn Rose photo)

In total, IGT posted revenue of $301.2 million for the quarter, a 13 percent increase over the same period last year. The gross profit was up eight percent to $178.2 million.

IGT — which makes slot games such as Diamond Nights; Exotic Island; and Fiesta Chihuahua  — purchased Double Down for as much as $500 million in January.

Double Down president Glenn Walcott spoke this afternoon at the Casual Connect conference in Seattle, and GeekWire’s Todd Bishop caught up with him after his talk about the results.

“We’ve been focusing on acquiring users that are monetizing. Before, the numbers were all about how do you grow your daily active users. We’ve learned a lot more about our daily active users, our monthly active users, about who our users are, and we’re focusing more on those that are paying off better,” he said. “It comes back down to lifetime value (of a user) and cost per acquisition. We’ve got really good analytics around that. In markets where we were acquiring a lot of users, but they weren’t paying off, we’ve redeployed those funds into other markets.”

Previously: Real gambling on Facebook? Double Down CEO says IGT deal could make it a reality

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