Scientific Games

Scientific Games Corporation is an American corporation that provides gambling products and services to lottery and gambling organizations across the globe. The company is headquartered in Alpharetta, Georgia. Its products include computerized and mechanical slot machines, table game theme copyrights, electronic card shufflers, instant lottery games, lottery gaming systems, terminals and services, internet applications, server-based interactive gambling terminals, gambling control systems, social gaming, and sports betting.

Scientific Games Corporation
TypePublic
ISINUS80874P1093 
IndustryGambling
PredecessorAutotote
FounderJohn Koza, Daniel Bower
Headquarters
Las Vegas, Nevada
Key people
Revenue US$3.363 billion(2018)[3]
US$265.6 million(2018)[3]
–US$352.4 million(2018)[3]
Total assetsUS$7.718 billion(2018)[4]
OwnerMacAndrews & Forbes: 39.1%[5]
Number of employees
9,700[6] (2018)
SubsidiariesWMS Industries
Bally Technologies
Websitescientificgames.com

Scientific Games was the first to introduce a secure instant lottery ticket, in 1974.[7] It provides point-of-sale systems that allow retailers to print lottery tickets such as Mega Millions and Powerball.[8] The company employs about 8,600 people globally and owns several subsidiaries including Bally Technologies and WMS Industries, as well as operating the UK sports-betting platform OpenBet.

History

The company traces its history to Autotote,[9] a manufacturer of totalizator systems for parimutuel wagering at racetracks. The history of Autotote dates to 1917, when George Julius founded Automatic Totalisators Limited in Australia to build the totalizator system he had invented.[10][11]

In 1989, United Tote, another leading totalizator company, purchased Autotote Systems, Inc. from Thomas H. Lee Partners.[12][13] Before the companies' operations could be integrated, the merger was challenged by federal antitrust regulators.[12][14] 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.[12][15]

In 2000, Autotote Corp. bought Scientific Games Holdings Corp., a maker of instant lottery equipment, for $308 million.[16][17] Scientific Games was founded in 1973, and introduced the first secure instant lottery ticket in 1974.[7] The combined company changed its name from Autotote to Scientific Games Corporation in 2001.[18]

By 2002, two-thirds of the $20 billion wagered annually on racing in North America was tracked by Autotote computers. Autotote supplied parimutuel wagering systems worldwide. These were automated, computerized off-track and on-track systems for betting on horse races and grayhound racing. It was an integrated system for off-track betting, keeping track of race results and winning tickets, and race simulcasting. 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."[19]

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 transmit betting information immediately after the bet has closed. It also pressured its member tracks into not doing business with parlors that did not have the ability to record wagers taken over the phone.[20][21]

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."[7] The Autotote racing division was sold to Sportech in 2010.[22]

In June 2014, Gavin Isaacs was appointed president and CEO.[23] In September 2014, they extended their deal with the Slovakian national lottery, TIPOS a.s., for another four years.[24]

Isaacs was succeeded by Kevin Sheehan as CEO in August 2016.[2] In March 2017, Scientific Games acquired rights to use the James Bond franchise after reaching a deal with Eon Productions and MGM Interactive. The deal gives them the rights to all James Bond films alongside the franchise's trademark opening sequence, soundtrack, and catchphrases.[25][26][27]

In June 2018, Barry Cottle, previously head of Scientific Games Interactive, was named as president and CEO to replace Sheehan.[1]

In December 2018, Scientific Gaming Digital's CEO Matt Davey stepped down and was replaced with SG Digital's executive vice president Jordan Levin.[28]

In 2019 the SG Digital platform expanded with more supplier deals including 4ThePlayer.com – a content studio formed by Andrew Porter and Chris Ash, both previously from Ash Gaming and Playtech. [29]

Subsidiaries

Wholly owned subsidiaries of Scientific Games Corporation include The Global Draw,[30] Barcrest,[31] Bally Technologies,[32][33] WMS Industries,[34][35] MDI Entertainment, LLC, and NYX Gaming Group Limited.[36]

In 2006, the company acquired the lottery operations of the Swedish firm EssNet,[37] as well as The Global Draw which provides server-based gambling machines to betting shops in the UK.[30] Another UK-based gaming company Barcrest was acquired from IGT in 2010.[31] Barcrest is the owner of Deal Games and a producer of betting and gambling terminals.[38] Scientific Games later acquired the slot machine maker Bally Technologies, in November 2014, for $3.3 billion plus $1.8 billion in assumed debt.[39] In October 2013, the company bought WMS Industries, the third largest manufacturer of slot machines, for $1.5 billion.[34][35]

In 2016, the company acquired DEQ Systems, a Canadian table-game maker.[40] The mobile bingo app maker Spicerack Media Inc. was acquired in April 2017 to expand the Scientific Games social gaming division.[41] Scientific Games also announced the $631 million acquisition of NYX Gaming Group Limited in September 2017.[42] When NYX acquisition was completed, the company gained the sports-betting platform OpenBet which handles about 80% of all sports betting in the UK as of 2018.[1]

Along with its own operations and wholly owned subsidiaries, Scientific Games owns significant stakes in the following companies: Lotterie Nazionali (20%, Italy),[43] Guard Libang (50%, China),[44][45] Northstar Lottery Group (20%, Illinois State Lottery),[46] Sportech (20%, United Kingdom), and the Robert Communications Network (29.4%).[47]

References
  1. Velotta, Richard N. (May 3, 2018). "Scientific Games posts $201.8 M net loss in first quarter". Las Vegas Review-Journal. Retrieved September 29, 2018.
  2. "Scientific Games taps new CEO; shares skid 14 percent". Las Vegas Review-Journal. August 5, 2016. Retrieved September 29, 2018.
  3. "Form 10-K". Scientific Games Corporation. 2018. p. 50 – via EDGAR, Securities and Exchange Commission.
  4. 10-K, p. 83
  5. 10-K, p. 45
  6. 10-K, p. 14
  7. Stodghill, Ron; Nixon, Ron (October 21, 2007). "Divide and Conquer: Meet the Lottery Titans". The New York Times. Retrieved October 21, 2007.
  8. Eule, Alexander (April 7, 2012). "A Dollar and a Dream". Barron's. Retrieved April 7, 2012.
  9. "Our History of Innovation". Scientific Games. Retrieved March 14, 2019.
  10. Lindsay Barrett; Matthew Connell (2006). "An Unlikely History of Australian Computing: the Reign of the Totalisator". The Rutherford Journal. Retrieved March 14, 2019.
  11. Daniel F. Cuff (October 4, 1982). "Holder of most stock will head Autotote". New York Times. Retrieved March 14, 2019.
  12. Phyllis Berman (November 9, 1992). "Home on the range". Forbes. Archived from the original on April 2, 2015.  – via HighBeam Business (subscription required)
  13. U.S. v. United Tote, Inc., 768 F.Supp. 1064 (D. Del. 1991).
  14. Reuters (December 28, 1990). "Company News; United Tote Sees Significant Loss". The New York Times. Retrieved September 28, 2018.
  15. Form 10-K: Annual Report (Report). Autotote Corporation. January 26, 1996. Retrieved March 11, 2015 – via EDGAR.
  16. "Autotote completes acquisition of Scientific Games" (Press release). Autotote Corp. September 6, 2000. Retrieved June 1, 2012.
  17. "Autotote purchase of Scientific Games is set for $310 million". Wall Street Journal. May 19, 2000. Retrieved June 1, 2012 – via ProQuest. (subscription required)
  18. Form 8-K: Current Report (Report). Scientific Games Corp. April 30, 2001. Retrieved March 11, 2015 – via EDGAR.
  19. "How Autotote Insider Rigged the System". Baseline Magazine. Ziff-Davis Media. December 1, 2002. Retrieved February 18, 2012.
  20. "Betting Inquiry Will Include F.B.I." New York Times. November 9, 2002. Retrieved February 18, 2012.
  21. "Handlers of Pick-Six Bets to Face a Lawsuit". Retrieved September 29, 2018.
  22. "Sports Haven/Autotote has new owner". New Haven Register. October 7, 2010. Retrieved February 18, 2012.
  23. Stutz, Howard (June 11, 2014). "Gavin Isaacs named CEO of Scientific Games". Las Vegas Review-Journal. Retrieved September 29, 2018.
  24. "Scientific Games and Slovakian Lottery Contract Extended". latestbingobonuses.com. September 11, 2014.
  25. "Scientific Games strikes deal to showcase slots featuring James Bond". Las Vegas Review-Journal. March 8, 2017. Retrieved September 28, 2018.
  26. "Ron Perelman's Scientific Games Inks James Bond Licensing Deal". The Hollywood Reporter. Retrieved September 28, 2018.
  27. "Scientific Games Corp. to start producing James Bond slot machines". Las Vegas Business Press. March 29, 2017. Retrieved September 28, 2018.
  28. "SG Digital CEO Matt Davey Steps Down in Scientific Games Shuffle". December 28, 2018.
  29. admin (December 11, 2019). "Scientific Games Expands OpenGaming™ with 4ThePlayer.com". 4ThePlayer.com. Retrieved December 11, 2019.
  30. Davies, Rob (October 10, 2017). "The multimillionaires making a packet out of Britain's gamblers". The Guardian. Retrieved September 29, 2018.
  31. "IGT sells British-based slot machine developer". Las Vegas Review-Journal. April 27, 2011. Retrieved April 27, 2011.
  32. "Scientific Games Buys Bally in $3.3 Billion Gaming Deal". Bloomberg.com. August 1, 2014. Retrieved September 29, 2018.
  33. "Scientific Games to Buy Bally Technologies". Wall Street Journal. August 1, 2014. ISSN 0099-9660. Retrieved September 29, 2018.
  34. "Scientific Games Agrees to Buy WMS for $1.5 Billion". Bloomberg.com. Retrieved September 29, 2018.
  35. Velotta, Richard N. (July 24, 2017). "Scientific Gaming reports revenue gain in 2nd quarter". Las Vegas Review-Journal. Retrieved September 29, 2018.
  36. "Form 10-K". Retrieved December 31, 2011.
  37. "Scientific Games köper Essnet". Dagens Nyheter (in Swedish). January 21, 2006. Retrieved December 20, 2018.
  38. "Barcrest Group faces job losses after Scientific Games Corporation review". Manchester Evening News. January 24, 2012. Retrieved September 29, 2018.
  39. Howard Stutz (November 21, 2014). "Scientific Games completes $5.1 billion acquisition of Bally". Las Vegas Review-Journal. Retrieved March 9, 2015.
  40. "Scientific Games to acquire Canadian table-game provider". Las Vegas Review-Journal. September 1, 2016. Retrieved September 29, 2018.
  41. "Las Vegas-based Scientific Games acquires bingo app maker". Las Vegas Review-Journal. April 11, 2017. Retrieved September 29, 2018.
  42. Richard N., Velotta (December 20, 2017). "NYX Gaming Group shareholders approve acquisition by Scientific Games". Las Vegas Review-Journal. Retrieved September 29, 2018.
  43. "Il grande risiko della concessione dei Gratta & Vinci". Vita (in Italian). September 29, 2018. Retrieved September 29, 2018.
  44. "Scientific Games acquires 50% interest in Guard Libang". Reuters. July 19, 2007. Retrieved September 29, 2018.
  45. "Scientific Games To Buy 50% Guard Libang Stake For $27M >SGMS". MarketWatch. July 19, 2007. Retrieved September 29, 2018.
  46. "Lucky lotto lady". Crain's Chicago Business. Retrieved September 29, 2018.
  47. "Scientific Games sells its racing communications business to Roberts Communications". Reuters. March 14, 2007. Retrieved September 29, 2018.
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