Scientific Games (SGMS - Free Report) is banking on sports betting and iGaming at various locations in the United States to strengthen its foothold in the gaming industry.
The sports betting market has been gaining significant traction in recent times. Per Research and Markets reports, globally, this market is expected to witness compound annual growth rate (CAGR) of 11% during the period 2020-2024.
Recently, long-term partner Hard Rock International selected Scientific Games’ digital and retail solutions to lead its iGaming and sports betting expansion, after the firm mutually terminated a platform and sportsbook services collaboration with Gaming Innovation Group.
Scientific Games is well poised to benefit from the massive growth opportunities in the sports betting market through global expansion and new partnerships. Notably, the stock has gained 30.4% year to date against the industry’s decline of 13.8%.
Year to Date Performance
Initially, Scientific Games will deploy its sportsbook platform across digital and retail for Hard Rock in both Iowa and New Jersey. The company will also become the exclusive provider of sportsbooks operating under the Hard Rock brand across the agreed states.
Additionally, Hard Rock International will also power their iGaming offering in New Jersey with Scientific Games' OpenGaming solution via the Hard Rock Casino apps and HardRockCasino.com.
Moreover, Hard Rock customers will have access to omni-channel sports betting and iGaming through Scientific Games’ OpenGaming solution.
Sports Betting Offers Solid Opportunities
Scientific Games provides game technology and sports betting solutions to more than 150 lotteries in 50 countries globally. It also includes 30 lotteries across the United States, Canada, Europe and Asia.
Markedly, in January 2020, Scientific Games was chosen by Hard Rock International to supply casino management system products, as well as slot and table games and utility products, for its newest hotel and casino in Sacramento, CA.
The casino opened with more than 1,800 slot machines and table game positions, all of which is managed and monitored by Scientific Games’ systems. Notably, as of Jul 23, 85% of domestic casinos have reopened after temporary closures of casino operations in jurisdictions globally due to the coronavirus outbreak.
Scientific Games is expected to benefit from expanding opportunities in the emerging digital market worth $20 billion. The company intends to become a pre-eminent player in the iGaming market in the long haul.
The company’s digital segment consists of iGaming, B2B interactive and sports betting. In second-quarter 2020, digital revenues increased 5.8% year over year on growth in existing accounts and new deal wins.
Zacks Rank & Stocks to Consider
Currently, Scientific Games carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader technology sector are Zoom Video Communications (ZM - Free Report) , Jabil (JBL - Free Report) and Cirrus Logic (CRUS - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Zoom Video, Jabil and Cirrus Logic is currently pegged at 25%, 12% and 7.8%, respectively.
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