SGMS Wins Lottery Again

Scientific Games Corporation (SGMS - Analyst Report) announced that the company has been selected again to be the primary vendor to supply instant tickets and related services for the Massachusetts State Lottery. The contract's initial term is three years with two one-year extension options. Scientific Games expects to generate revenues of approximately $12 million per year from this contract.

Scientific Games has a leading position in several markets, including the instant ticket and online lottery markets. The company continues to win significant contracts in both the instant ticket and online lottery markets from both domestic and international lottery authorities. We rate the stock a Buy.

Also this year, the company signed an amendment contract which extends for four years the Tennessee Lottery Contract, which designates the company as the primary vendor to supply instant tickets and related services (including warehousing and distribution). The amendment covers the period between April 2011 and 2015. The Tennessee Lottery Contract is expected to generate revenues of approximately $9 million per year.

In 2008, The Pennsylvania Department of Revenue selected Scientific Games in an open and competitive procurement process to supply a new range of lottery equipment, including the "next-generation" WAVE terminals. The contract has an initial term of five years and provides for five one-year extension options.

Also in 2008, the company received a contract as the primary vendor to supply instant tickets and related services to the Florida Lottery, which should generate annual revenues of approximately $35 million. In addition, the company was granted three year extension of instant ticket contract with the Georgia Lottery, which generates annual revenues of approximately $28 million.

Within the instant ticket lottery market, the company also has instant ticket lottery contracts in Tennessee, Texas, California, New York, Illinois, Colorado, Vermont, Indiana, Kentucky, Washington, Idaho, and West Virginia.

Based in New York City, Scientific Games Corporation is a global information technology systems and services company that provides instant ticket and online lottery products, systems and services to lottery authorities worldwide. Scientific Games is a provider of computerized systems and services to the pari-mutuel wagering industry, an operator of off-track betting (OTB) facilities, and a manufacturer of paper-based prepaid phone cards. Scientific Games' customers are not only in the United States, but also in more than 60 other countries worldwide.