Scientific Games to divest in lottery and sports betting

by Charlotte Lee Last Updated
Scientific Games’ lotteries arm receives varying valuations from investors

Global gaming giant Scientific Games has revealed plans that will see it deleverage two major businesses and invest further in digital aspects of its operations.

Inside Asian Gaming reports that Scientific Games will divest its lottery and sports betting businesses.

The divestment strategy follows a strategic review conducted by the board of directors in March, which aimed to determine how the company could best optimise its portfolio.

Scientific Games said it is also considering strategic alternatives for the divestitures for each business, including an initial public offering, combination with a special purpose acquisition company or a strategic combination with another business.

“When I joined the Board in September 2020, I took stakeholders that were focused on rapidly de-leveraging the balance sheet, unlocking the value of the company’s products and technologies and creating a flexible, nimble company positioned to deliver above-market returns to investors,” said Scientific Games chairman Jamie Odell.

“Today, we have announced major initiatives aimed at achieving each of these key objectives, recognising significant value in each of the businesses and positioning the company for sustainable growth, all as a result of the dedicated work of our teams.”

Scientific Games president and chief executive Barry Cottle added, “Today’s announcement reflects key steps to optimise our portfolio and strengthen our balance sheet by significantly de-levering while also targeting investments in our largest growth opportunities. These steps will accelerate our path to become a content-led growth company focused on leading in both land-based and digital markets.

“Our company will be positioned to build great games that define the future of gaming, supported by platforms that power the best operators in the world. 

“We believe these steps will enable us to capitalise on the high growth potential of each of our businesses, including their expanding digital content offerings and platforms, unlocking value for shareholders, customers, and employees.

“Each of our businesses will be better positioned to partner with their respective customers and to deliver long-term growth and profitability.

“At the conclusion of this process, the new company will consist of leading gaming, iGaming and SciPlay businesses, all of which have great momentum and will collectively deliver great value.”

Scientific Games ponders ASX launch

The Nasdaq-listed Scientific Games has engaged Sydney-based Jarden Australia to run the numbers on a potential ASX-listing and feed their input into a broader strategic review that’s mulling options to fix up the company’s debt-heavy corporate structure.

An ASX-listing is believed to be just one option on the table, however sources said it was a serious consideration.

Australia’s equity capital markets are open to new floats, shares in fellow gaming companies are trading at all-time highs and Scientific Games has plenty of Australian hooks to help it catch some big domestic investors.

The Australian connections start with Scientific Games executive chairman Jamie Odell, who joined the company’s board in 2020.

Mr Odell is a well known and highly respected Australian gaming company executive, having spent nearly a decade running poker machine maker Aristocrat Leisure and turning it into one of the country’s best performing companies.

Another connection is Sydney based fund manager Caledonia Investments, which spearheaded a consortium that invested US$1 billion in Scientific Games in 2020.

Mr Odell was also part of the consortium, he knew Caledonia well from his days as a major Aristocrat shareholder.

Caledonia, run by Will Vicars and Mike MEssara, now owns 9.8 per cent of the company.

Also involved at Scientific Games is Toni Korsanos, another former Aristocrat Leisure executive now plying her trade on the boards of Crown Resorts and Treasury Wine Estates.

Ms Korsanos is Scientific Games’ executive vice chair.

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