SBC News Scientific Games seeks to shed lottery & sports betting weight

Scientific Games seeks to shed lottery & sports betting weight

The board of Scientific Games Corporation (SGC) has this afternoon disclosed that it will pursue a ‘strategic divestment’ of the technology group’s lottery and sports betting units.

The decision is reported to be supported unanimously by the SGC board, including Executive Chairman Jamie Odell and Executive Vice Chair Toni Korsanos.

Issuing a short statement, SGC detailed that decisive steps needed to be undertaken following a strategic review of the Nasdaq technology group, which intends to ‘significantly de-lever and positioning the Company for enhanced growth’.

SGC’s board has begun to weigh up the divestment options for its lottery and sports betting divisions, including a potential IPO, the sale of their respective assets or a ‘combination with a SPAC.
In his statement to investors, Odell underscored that he had been appointed as chairman to take drastic actions to reduce SGC bloated long-term debt holding.

“When I joined the Board in September 2020, I told stakeholders that we 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.” Odell statement read.

Prior to 2020’s pandemic, SGC’s new governance had been tasked with significantly reducing the firm’s long-term debt, which currently registers at $9.5 billion – more than $4 billion over the firm’s market capitalisation of $5.40 billion.

SGC’s corporate debt ballooned to $8.5 billion in 2014 following the firm’s leveraged acquisition of casino slot and games manufacturer Bally Technologies for $5.1 billion.

The announcement sees SGC overhaul its long-standing corporate strategy, in which the company had positioned itself to become the leading systems provider for all gambling verticals (land-based and digital) following its back-to-back M&A enlargement,  acquiring the digital assets of OpenBet and NYX Gaming in 2018.

SGC governance will host an investor conference call at 8.30 EST to explain its future strategy, in which the company seeks to become ‘a more content-led growth company with a particular focus on digital markets and to drive long-term sustainable value’.

“Today’s announcement reflects key steps to optimize our portfolio and strengthen our balance sheet by significantly de-levering while also targeting investments in our largest growth opportunities,” said Barry Cottle, President and Chief Executive Officer of Scientific Games.

“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. We will capitalise on the increasing convergence of these businesses, as players look to play their favourite games wherever and whenever they want to play.

“Given this significant opportunity, we are targeting our digital businesses to be comparable in size to the land-based gaming business within three years. I’m confident that, with these steps, we are well-positioned for future growth prospects.”

Check Also

Better Collective

Better Collective eyes ‘home support’ with Copenhagen dual listing

Better Collective AS will place its shares on Nasdaq Copenhagen, supplementing the media group’s current …

SBC News EEG promotes Villani to CFO for reogranisation 

EEG promotes Villani to CFO for reogranisation 

Esports Entertainment Group Inc (EEG) has confirmed the promotion of Michael Villani to Chief Financial …

SBC News Codere Online positive of 2024 cash flow following Q2 growth spurt 

Codere Online positive of 2024 cash flow following Q2 growth spurt 

Codere Online continued its robust momentum in Q2 trading as strides were made across its …