U.S.-based lottery giant Scientific Games has sold its racing and venue management divisions to UK bookmaker Sportech for $33 million in cash and Sportech stock valued at approximately $26 million.
Sportech will pay an additional $10 million in 2013 and could pay an additional $8 million during that time frame based on performance targets. If all incentives are reached, the total price will be $77 million. And as part of the deal, Scientific Games becomes a 19.9 percent owner of Sportech.
While Sportech started as a bookmaker, the company is confident it will meet regulatory approval as a tote operator in the United States, as well as Europe. As part of the deal, Sportech said it already has met regulatory approval standards and will make changes to its board, including the addition of Scientific Games Racing President Brooks Pierce and Scientific Games Chairman Lorne Weil as a non-executive director.
“This is [a] hugely important transaction, which transforms the business of Sportech,” said Chief Executive Ian Penrose. “Over the past three years, Sportech has undergone significant restructuring, culminating in the completion of the SGR acquisition. This acquisition creates a world-leading pools betting company with international reach, as well as significant growth potential in our existing main markets of Europe and North America. The enlarged Sportech will have the scale and capability to compete in the new and emerging regulated global gaming markets.”
SciGames President Michael Chambrello said combining the businesses will create new opportunities for pari-mutuel wagering. In the United States, Scientific Games, formerly known as Autotote, boasts two large data centers in Sacramento, Calif., and in Mount Laurel, N.J. The venue management wing includes the race book operation at the Mohegan Sun Casino in Connecticut and a casino in Wisconsin.
Sportech buys SciGames' racing business
October 6, 2010