Scientific Games plans to only retain minority interest in lottery business if divested

Scientific Games, sports-betting

Scientific Games on Thursday said it expects to hold no more than a minority equity interest in the entity that owns SG Lottery, should the company go ahead with an IPO of its lottery business. 

The company made the note as part of an announcement that it is soliciting consent from holders of its senior notes to amend the indentures requirement for an asset sale.

In June, Scientific Games announced its intentions to divest its Lottery and Sports Betting businesses, either through an IPO, sale or strategic merger or special purpose acquisition company (SPAC).

The company’s President and CEO said this would leave it with the leading Gaming, iGaming and SciPlay businesses, “all of which have great momentum and will collectively deliver great value”.

SciGames Lotteries recorded EBITDA of AU$570 million over the past year, with analysts considering it could be more than 10-times earnings.

The business unit was also a stand out in the company’s 1Q21 figures, with a 36 percent increase in revenue year-on-year. 

In its recent filing, Scientific Games said it intends to use the majority of net proceeds from an SG Lottery transaction  to repay indebtedness of SGMS and its restricted subsidiaries

“SGMS does not intend to pay any dividends, or make any repurchase of its equity, with the net proceeds from an SG Lottery Transaction, nor does it intend to distribute any retained interests in SG Lottery to its shareholders,” it said.