Scientific Games Expects Lottery Revenue and Earnings to Rise in Q4 2021
Scientific Games Corporation anticipates its lottery operations to exhibit year-on-year revenue and earnings expansion in the final quarter of fiscal 2021.
The enterprise stated in a press release that its lottery division’s income is anticipated to be in the range of $265 million (£196 million/€235 million) and $275 million for the three-month period concluding on December 31.
Scientific Games indicated that the lower boundary of this range would signify a 4% rise from the preceding year, whereas the upper limit would represent a 7% surge over fiscal 2020.
Operating earnings are projected to be between $70 million and $75 million, which would surpass the $68 million recorded in 2020. Meanwhile, adjusted operating earnings could experience an 11% to 16% increase from $99 million, based on an estimated range of $110 million to $115 million.
Scientific Games also highlighted that earnings before interest, taxes, depreciation, and amortization (EBITDA) derived from equity investments could attain $19 million, signifying a 58% surge from the previous year.
This update follows Scientific Games’ October announcement of a definitive agreement to divest its lottery operations to private equity firm Brookfield Business Partners for $6.05 billion.
The transaction encompasses an initial $5.
Scientific Games has divested its lottery operations for a sum of $830 million in cold hard cash, along with the potential for an additional $225 million in performance-based payments contingent upon the achievement of specific EBITDA goals set for the year 2022 and 2023.
Scientific Games’ lottery division collaborates with approximately 130 governmental and non-governmental lottery organizations spanning over 50 nations across the globe. They provide a comprehensive suite of solutions, encompassing instant and terminal-generated lottery games, sports wagering, lottery systems, as well as retail technology and online lottery marketplaces.
In June of 2021, Scientific Games initially unveiled plans to separate its lottery operations, aiming to position the company for a path of “sustainable growth.”
In September of the preceding year, Scientific Games indicated that the division was on course to generate $1 billion in revenue for the current year, contributing $266 million to the group’s overall revenue of $880 million during the second quarter.
Last week, Scientific Games also secured certification from the World Lottery Association for its responsible gaming framework, encompassing its global operations spanning five continents.
The independent audit acknowledged that Scientific Games has implemented a range of procedures, including a Healthy Play program launched in 2020, which aims to foster the healthy enjoyment of gaming through player education.
This month, Scientific Games withdrew its proposal to acquire the remaining 19% stake in its SciPlay social gaming division through an all-stock transaction.
In the previous July, Scientific Games proposed to acquire all of the SciPlay stock they didn’t possess. This transaction valued SciPlay at $1.9 billion and would have provided SciPlay shareholders (excluding SGC) with 0.25 shares of Scientific Games stock for each SciPlay share they held.
However, Scientific Games withdrew from the agreement, leaving SGC with an 81% interest in SciPlay and 98% of the voting rights.
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