Scientific Games, Playtech Strike International Distribution Agreement

Posted on: July 20, 2021, 10:46h. 

Last updated on: July 20, 2021, 02:38h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Gaming technology provider Scientific Games (NASDAQ:SGMS) and European gaming firm Playtech (OTC:PYTCY) have reached an agreement. It paves the way for the companies to capitalize on the other’s scale in various regions around the world.

Scientific Games
Scientific Games headquarters in Las Vegas, pictured above. The company has a global distribution agreement with Playtech. (Image: Jeff Scheid/Nevada Independent)

As part of the accord, Playtech’s software will be accessible to operators via Scientific Games’ Open Gaming System (OGS) offering.

The agreement includes Playtech’s casino offerings, such as its slots, table games, and live casino entertainment. These offerings will be integrated into Scientific Games’ features. The content will then be rolled out in New Jersey first. More states will follow, according to a statement issued by Scientific Games.

Playtech makes software for internet casinos, web-based poker rooms, and online sports wagering, making the company somewhat comparable to GAN Ltd. (NASDAQ:GAN). Playtech also provides software for fixed-odds arcade games, online games, and provides services for scratch games. It was founded in Estonia more than two decades ago and is headquartered in the Isle of Man.

Scientific Games iGaming Play

The agreement with Playtech is the latest sign of Scientific Games’ desire to forge deeper into the fast-growing world of internet casinos.

That could be a prudent move on the Las Vegas-based company’s part, because, by some estimates, the North American online casinos and sports wagering markets could eventually be worth $42 billion or more, and iGaming is seen as the more lucrative of the two segments, because it has better margins and a longer runway for state-level legalization.

Late last month, Scientific Games said it will divest its lottery and Don Best sports betting units to firm its balance sheet and allow it to focus on higher growth opportunities. Last week, the company offered to acquire the 19 percent of social casino developer SciPlay Corp. (NASDAQ:SCPL) it doesn’t already control — another sign of its plan to push into online gaming.

Geographic Scale with Playtech Deal

For Playtech and Scientific Games, the newly inked agreement sets the stage for the companies to enter markets where they previously lacked exposure.

“This new partnership, featuring two of the industry’s biggest companies, will enable Scientific Games and Playtech to mutually benefit from each other’s scale and reach across the US, in addition to regulated markets in Latin America and Central, Eastern, and Western Europe,” according to the statement.

Financial terms of the deal weren’t disclosed. Playtech was previously rumored to be a potential acquisition target. But the agreement with Scientific Games isn’t necessarily a precursor to dealmaking.