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NEW YORK, Nov 21 (IFR/TRLPC) - Banks are not shying away from underwriting highly leveraged buyouts even as the buyside balks at some recent deals deemed to have too much debt and regulators continue...
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NEW YORK, Oct 31 (IFR) - Underwriters are facing another problem when backing leveraged buyouts - and this time it's not regulators but unpredictable debt markets.
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Scientific Games Inc. said it remains fully committed to its $5.1 billion acquisition of Bally Technologies Inc. and expects to complete marketing debt for the transaction within the next few weeks. Scientific Games, which is 39% controlled...




 

Based in New York City, Scientific Games Corporation (SGMS) is a global information technology (IT) systems and services company that provides instant ticket and online lottery products, systems and services to lottery authorities worldwide. Scientific Games is also the leading provider of computerized systems and services to the pari-mutuel wagering industry, an operator of off-track betting (OTB) facilities, and a leading manufacturer of paper-based prepaid phone cards.

Scientific Games continues to benefit from its strong and growing presence in the worldwide instant ticket and online lottery markets. Within the instant ticket lottery market, the company started instant ticket lottery contracts for lottery authorities in Georgia, Tennessee, and Texas over the past two years. The company also signed a four-year contract with the California State Lottery, three-year contracts in New York and Illinois, and two-year contracts in Colorado and Vermont. Additionally, the company was awarded contract extensions from lottery authorities in Indiana, Kentucky, Washington, and West Virginia during the second half of 2005. In addition to strong and growing relationships with state lottery authorities, the company benefits from its licensed instant ticket brands, such as Texas Hold'em from the World Poker Tour, Pac-Man, Yahoo!, and American Idol.

Business Overview

Business & Financial Metrics[1]

In 2009, SGMS incurred a net loss in $39.8 million on revenues of $927.7 million. This represents a 789.2% jump in net loss and a 17.1% decrease in revenues from 2008, when the company lost $4.5 million on $1.12 billion in revenues.

Business Segments[2]

SGMS is divided into three reportable business segments.

  • Printed Products Group (50.3% of revenues): This segment represents the company's instant lottery ticket business.[3]
  • Lottery Systems Group (27.7% of revenues): This segment sells customized computer software to government-sponsored and privately-operated lotteries.[4]
  • Diversified Gaming Group (22.0% of revenues): This segment sells services and systems to operators in the gaming and wagering industries. The segment sells server-based gaming machines, video lottery terminals, and sports betting systems.[4]

Competition

In the United States, SGMS's primary competitors in the instant lottery ticket market are Pollard Banknote Inc FD (PBL) and GTECH. In the lottery systems market, the company's major competitors are GTECH and Intralot (ATH:INLOT). The company's competitors in the video gaming terminal market are:

References

  1. SGMS 2009 10-K pg. 45  
  2. SGMS 2009 10-K pg. 124  
  3. SGMS 2009 10-K pg. 3  
  4. 4.0 4.1 SGMS 2009 10-K pg. 4  
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