Todd Shriber

Posted on: July 20, 2021, 10:46h. 

Last updated on: July 20, 2021, 10:46h.

Gaming technology provider Scientific Games (NASDAQ:SGMS) and European gaming firm Playtech (OTC:PYTCY) reached an agreement that 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. 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.

Playtech’s software will be available to operators via the Open Gaming System (OGS). The agreement covers the breadth of Playtech’s industry leading Casino offering, including its portfolio of slots, table games and Live Casino entertainment, which will all be integrated with Scientific Games’ features and promotions set. Playtech’s game content will be rolled out through the OGS initially in New Jersey with more states to follow,” according to a statement issued by Scientific Games.

Founded in Estonia more than two decades ago and headquartered in the Isle of Man, 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.

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

“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 U.S. 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 deal making.

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