Scientific Games Corporation
) has signed a contract with Oklahoma Lottery. The contract is
scheduled to take effect from Aug 9, 2013. Though the current
contract is for one year only, provisions are there to extend the
contract further to a maximum of nine years.
Scientific Games is associated with Oklahoma Lottery since its
launch in 2005 and the present contract would strengthen its
partnership. As per the Lottery Gaming Services, Scientific Games
would provide Oklahoma Lottery with terminals and statewide
communications, warehousing, instant ticket printing,
distribution, technical and sales staff and lottery services.
Apart from the current contract with Oklahoma Lottery,
Scientific Games has recently won contracts from Loteria
Electronica Internacional Dominicana S.A. and Loteria Nacional de
Beneficencia of Panama. These contracts are expected to
incrementally benefit the company, going forward.
The domestic lottery industry is undergoing a transition,
which involves increasing involvement of private vendors in state
lottery management, higher prize payouts and introduction of
tiered pricing for national jackpot games to add impetus to the
sagging lottery industry in the U.S. We believe that Scientific
Games is well positioned to benefit from these transitions, going
We believe that the company's diversified product offerings,
international development activities, recurring revenue business
model, strong growth of the Internet-based business and
) acquisition will drive the stock over the long term.
However, increasing investments for product development is
expected to hurt profitability in the near term. Additionally, a
significant increase in regulatory, professional fees and other
expenses related to the WMS acquisition will hurt margins in the
Further, stiff competition from the likes of
International Game Technology
Bally Technologies Inc.
) is expected to hurt profitability, going forward.
Currently, Scientific Games carries a Zacks Rank #4
BALLY TECH INC (BYI): Free Stock Analysis
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SCIENTIFIC GAME (SGMS): Free Stock Analysis
WMS INDS INC (WMS): Free Stock Analysis
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