Scientific Games Corporation

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Scientific Games Corporation
Public
Traded as NASDAQSGMS
S&P 600 Component
Industry Gambling
Predecessor Autotote
Founded 1973; 44 years ago (1973)[1]
Founder John Koza, Daniel Bower
Headquarters Las Vegas, Nevada
Key people

Kevin Sheehan (CEO),

Ronald O. Perelman
(Chairman)
[2]
Revenue Increase$2.8 billion USD (2015)
Decrease$1.024 billion USD (2015)
Decrease$1.394 billion USD (2015)
Total assets $7.732 billion USD (2015)
Total equity -$1.495 billion USD (2015)
Subsidiaries WMS Industries
Bally Technologies
Website scientificgames.com

Scientific Games Corporation is an American company that provides gambling products and services to lottery and gambling organizations worldwide. The company is headquartered in Las Vegas, Nevada. Products include electronic gaming machines, table games, iGaming and iLottery products, instant lottery games, lottery gaming systems, terminals and services, internet applications, server-based interactive gambling terminals, and gambling control systems.

Scientific Games introduced the first secure, instant lottery ticket in 1974.[1] Through high-security techniques including complex algorithms, printing treatments, encryption and firewalls, Scientific Games ensures that no one knows where a winning ticket is. They provide lottery retailers with secure point-of-sale systems that print Mega Millions and Powerball tickets. Over time, Scientific Games has added loyalty and reward websites, where players can earn points and prizes on non-winning tickets bought at retail.[3]

In 2012, global lottery revenues totaled $262 billion.[4] In 2011, U.S. lottery revenues totaled $56 billion with approximately 30% of total revenues directed to government transfers. There are currently 44 states and territories in the U.S. that offer government-operated lotteries.[5]

History[edit]

Two leading totalizator companies were combined in 1989 when United Tote purchased Autotote Systems, Inc. from Thomas H. Lee[6][7] Before the companies' operations could be integrated, the merger was challenged by federal antitrust regulators.[6] A 1991 court ruling forced the company to split back up. The former United Tote assets were sold back to that company's founders, the Shelhamer family, and what remained of the company was renamed as Autotote Corporation.[6][8]

In 2000, Autotote Corp. bought Scientific Games Holdings Corp., the leading maker of instant lottery equipment, for $308 million.[9][10] Scientific Games had been founded in 1973, and introduced the first secure instant lottery ticket in 1974.[1] The combined company changed its name from Autotote to Scientific Games Corporation in 2001.[11]

By 2002, two thirds of the entire $20 billion annually wagered on racing in North America was tracked by Autotote computers. [12] Autotote supplied pari-mutuel wagering systems worldwide. These were automated, computerized off-track and on-track systems for betting on horse races and greyhound racing. It was an integrated system for off-track betting, keeping track of race results and winning tickets, and race simulcasting.[citation needed]

In 2006, Scientific Games acquired The Global Draw, which provides server-based gambling machines to betting shops in the U.K. The Company has added to its position in the U.K. by acquiring Games Media, specializing in server-based, digital gambling and entertainment solutions to U.K. pubs, in 2007 and Barcrest from IGT in 2010.[13] Barcrest, which was founded in 1968, established itself as a market leader in betting and gambling terminals in the UK. Several of Barcrest's slot machine titles, such as Rainbow Riches and Monty's Millions, have been redeveloped for online real money gambling. Despite being acquired in 2011 by Scientific Games, the Barcrest brand lives on, with the logo appearing on some new slot game releases.[citation needed]

In 2007, the New York Times credited Scientific Games and Gtech for transforming what was known “historically [as] an underground operation run by mobsters” into “a lucrative, state-sponsored corporate enterprise.”[1] The Autotote racing division was sold to Sportech in 2010.[14]

In October 2013, the company bought WMS Industries, the third largest manufacturer of slot machines, for $1.5 billion.[15]

In June 2014, Gavin Isaacs was appointed president and CEO. [16]

In September 2014, they extended their deal with the Slovakian national lottery, TIPOS a.s., for another four years.[17]

In November 2014, Scientific Games acquired slot machine maker Bally Technologies for $3.3 billion plus $1.8 billion in assumed debt.[18]

In August 2016, Kevin Sheehan was named CEO, replacing Isaacs.[citation needed]

In March 2017, Scientific Games were awarded the James Bond franchise[19] after reaching a deal with EON Productions Limited, Danjaq, LLC and MGM Interactive. The deal gives them the rights to all James Bond films alongside the 007 franchise's trademark opening sequence, soundtrack and catchphrases.[citation needed]

Scientific Games announced the $631 million acquisition of NYX Gaming Group Limited in September 2017.[20]

Subsidiaries[edit]

Wholly-owned subsidiaries of Scientific Games Corporation:[21]

Along with its own operations, Scientific Games owns significant stakes in the following companies:[22]

  • 20% Lotterie Nazionali - Italy's instant game, largest instant game in the World
  • 49% CSG Lottery - Instant lottery games in China
  • 50% Guard Libang - Lottery systems and services in China
  • 20% Northstar Lottery Group - Private manager of Illinois State Lottery. Was the first state awarded private contract (July 2011)
  • 20% Sportech - United Kingdom betting site.
  • 29.4% Robert Communications Network - Communications provider.

Controversy[edit]

The security of Autotote software for the racing industry garnered media attention in 2002 when one of their software developers attempted to steal $3 million through a hole in their software and processes described as "... an example of a very simple exploitation of a rather stupid design flaw." [12] The role of Autotote's software in the 2002 Breeders' Cup betting scandal caused the National Thoroughbred Racing Association to take swift action in the face of a growing outcry once the nature of the scam emerged. It required all tote companies to modify their software to allow bets to be forwarded immediately after a race closed.[23] The Autotote racing division was sold to Sportech PLC in 2010.[14]

In December 2008, then CEO A. Lorne Weil’s son Luke Weil[24][25] was employed as Director, International Business Development.[26]

See also[edit]

References[edit]

  1. ^ a b c d "Divide and Conquer: Meet the Lottery Titans". Retrieved 2007-10-21. 
  2. ^ "David L. Kennedy Appointed as President and Chief Executive Officer of Scientific Games". marketwatch.com. 19 November 2013. Retrieved 20 November 2013. 
  3. ^ "A Dollar and a Dream". Retrieved 2012-04-07. 
  4. ^ "La Fleur's 2012 World Lottery Almanac". Retrieved 2013-01-01. 
  5. ^ "Lottery Sales Rise to Record as Cash-Hungry States Search for More Revenue". Retrieved 2011-11-13. 
  6. ^ a b c Phyllis Berman (November 9, 1992). "Home on the range". Forbes.   – via HighBeam Business (subscription required)
  7. ^ U.S. v. United Tote, Inc., 768 F.Supp. 1064 (D. Del. 1991).
  8. ^ Form 10-K: Annual Report (Report). Autotote Corporation. January 26, 1996. Retrieved 2015-03-11 – via EDGAR. 
  9. ^ "Autotote completes acquisition of Scientific Games" (Press release). Autotote Corp. September 6, 2000. Retrieved 2012-06-01. 
  10. ^ "Autotote purchase of Scientific Games is set for $310 million". Wall Street Journal. via ProQuest. May 19, 2000. Retrieved 2012-06-01.  (subscription required)
  11. ^ Form 8-K: Current Report (Report). Scientific Games Corp. April 30, 2001. Retrieved 2015-03-11 – via EDGAR. 
  12. ^ a b Barrett, Larry (2002-12-01). "How Autotote Insider Rigged the System". Ziff-Davis Media. Retrieved 2012-02-18. 
  13. ^ "IGT sells British-based slot machine developer". Retrieved 2011-04-27. 
  14. ^ a b Nowak, Dan (2010-10-07). "Sports Haven/Autotote has new owner". New Haven Register. Retrieved 2012-02-18. 
  15. ^ "Scientific Games completes acquisition of WMS" (Press release). Scientific Games. October 18, 2013. Retrieved 2015-03-10 – via PR Newswire. 
  16. ^ http://www.prnewswire.com/news-releases/gavin-isaacs-named-ceo-at-scientific-games-corporation-262509421.html
  17. ^ "Scientific Games and Slovakian Lottery Contract Extended". latestbingobonuses.com. 11 September 2014. 
  18. ^ Howard Stutz (November 21, 2014). "Scientific Games completes $5.1 billion acquisition of Bally". Las Vegas Review-Journal. Retrieved 2015-03-09. 
  19. ^ "Scientific Games awarded the James Bond franchise". casinopedia.org. 10 March 2017. 
  20. ^ "Scientific Games Purchases NYX for $631m". twolittlefleas.co.uk. Retrieved 2017-10-02. 
  21. ^ "Form 10-K". Retrieved 2011-12-31. 
  22. ^ "Can Recent Lottery Jackpots Power Scientific Games To First Quarter Earnings Beat?". Retrieved 2012-04-10. 
  23. ^ Finley, Bill (2002-11-09). "Betting Inquiry Will Include F.B.I". New York Times. Retrieved Feb 18, 2012. 
  24. ^ Weil, Luke. "Luke Weil Info Page". lukeweil.info. lukeweil.info. 
  25. ^ Weil, Luke. "Luke Weil". lweil.com. Luke Weil. 
  26. ^ "SCIENTIFIC GAMES CORP - FORM 8-K - December 3, 2010". Washington, D.C. 20549: UNITED STATES SECURITIES AND EXCHANGE COMMISSION. December 3, 2010. Retrieved 19 Feb 2012. 

External links[edit]