After finishing a tactical evaluation, US-based gaming provider Scientific Games (SG) has announced strategies to divest its lotto and sports betting businesses to place the company for “enhanced development.” The company revealed the news in a press release on its leading site Tuesday, also requiring Twitter to advertise the “decisive actions” later on that day:
According to Barry Cottle, president, and CEO of SG, the measure will enable the company to de-leverage its balance sheet, opening the door to new investment opportunities and digital growth. “These steps will accelerate our course to end up being a content-led growth company concentrated on leading in both digital and land-based markets,” he commented.
In regards to executing the divestment, SG is checking out several alternatives. This includes a going public, a combination with a unique purpose acquisition company, and a sale or tactical variety with another company. Despite strategies to explore the possibility, the company has affirmed that there is no assurance a transaction will proceed.
In Tuesday’s press release, Cottle made clear that a person of the primary goals of the divestment was for the company to grow its digital sector. “We are targeting our digital services to be equivalent in size to the land-based gaming company within three years,” he said. Cottle expressed confidence that the divestment would make this possible.
Land-based gaming was the only sector to see a decrease from 2019 levels, down 36%.
The new technique comes as SG’s land-based sector continues to fight the effect of the pandemic. For the full year of 2020, the company’s digital industry generated revenue of $73m. Although dwarfed by the business’s land-based gaming earnings of $286m, that still represented an increase of $1m year-on-year. On the other hand, land-based video gaming was the only sector to decrease 2019 levels, down 36%. In general, the company’s income fell nearly 21% for the entire year as a result.
Regardless of seeing a slight increase in overall income this year, SG’s land-based section is still having a hard time. For the first quarter of 2021, the company saw a boost of almost 1% year-on-year to $729m. However, land-based fell 23%. Once again, it was the only of SG’s sectors to sign up a loss.
Although reducing COVID-19 limitations in numerous states has increased commercial video gaming revenue, the sector stays impeded by the pandemic. According to the American Video gaming Association’s most current information, around 80% of the US’s 463 gambling establishments remained constrained to between 25% and 75% of complete tenancy in April.
Over the past 12 months, SG has signed deals with several United States operators as it continues its growth throughout the nation.
The business-powered FanDuel’s sportsbook launches in West Virginia, Illinois, and Indiana.
A variety of these arrangements focused around the provider’s sports wagering innovation, OpensSports. In September, the business renewed its collaboration with wagering huge Flutter Entertainment, meaning SG will continue to supply Flutter with its OpenSports technology for the next five years. More recently, the company powered FanDuel’s sportsbook launches in West Virginia, Illinois, and Indiana.
Beyond sports wagering, SG secured a cashless payments technology cross-licensing deal with IGT in March. The agreement will enable the two suppliers to sell the very same cashless video gaming products in the US market. Matt Wilson, CEO of Scientific Games, said the cross-licensing would benefit clients and the market as a whole.