Scientific Games Shares Tumble As Playtech Deal Fails
Shares in Scientific Games dropped 10 percent yesterday after EGR Magazine reported the company’s joint venture with Playtech was falling apart. As of this writing, neither company had posted press releases about the news, but an EGR article stated that the joint venture had been reduced to a strategic partnership.
It’s been less than a week since the two companies announced that they were entering into a joint venture aimed at providing software solutions to the state sponsored lottery market. The new company, named SciPlay, hoped to make a splash in a market segment they termed B2G for business to government.
Just a few days ago, executives from the two companies released a statement that was nothing but optimistic, “We have highly complementary skill-sets allied with a global reach and this partnership provides the opportunity to leverage off this combined know-how to maximum effect,” they said.
“Customers will benefit from best of breed content, sophisticated player management systems, and long-standing industry experience in providing highly secure, regulated, compliance-oriented services.”
On paper, it looked like a dream partnership.
Scientific Games already owns a good chunk of the state sponsored lottery market and services 120 customers. One of their biggest customers, the Chinese Government, gets 8 billion scratch cards from them a year. Playtech saw the deal as a good opportunity to provide gaming software to state governments should legalized intrastate online gambling come to pass.
Both companies stood to benefit from building new markets as new competitors had been challenging them in the B2B space.
Story Still Developing
Details about why the joint venture fizzled out are currently quite scarce, but the companies are expected to release a statement in the next day or two.
Do you have any insight as to why this deal fizzled out so quickly? Let us know on our Online Gambling Newswire.