BUSINESS

SG wins Missouri and New York lottery instant ticket contracts

TAGs: Missouri Lottery, New York Lottery, Scientific Games

Scientific Games buys BarcrestScientific Games Corporation came up winners in the rocky mountains of Colorado after the company was awarded a three-year contract to become the primary vendor to supply instant ticket games and related services to the Colorado Lottery. You can now call it a winning streak as Scientific Games Corporation announced that the Company has been awarded a contract to be the primary vendor to supply instant ticket games and related services to the Missouri State Lottery and the New York Lottery.

After winning the selection process, SG was awarded the three-year contract for the Missouri State Lottery, which begins on July 1, 2011 and includes seven one-year contract extension options. Revenue to Scientific Games will be based on a percentage of instant ticket retail sales.

“We are excited to continue to work with Scientific Games, who has a strong track record of growing Missouri Lottery proceeds as a result of their innovative content, comprehensive marketing analysis and excellent security,” said May Scheve Reardon, Executive Director of the Missouri State Lottery in the press release. “Over our nearly 20-year history of working together, Scientific Games has helped grow Scratchers instant ticket sales from $97 million, or 44% of total lottery sales in fiscal year 1992, to $638 million, or 66% of total lottery sales in fiscal year 2010.”

“We look forward to continuing our successful partnership with the Missouri Lottery,” commented Jim Trask, President of the Printed Products Group for Scientific Games Corporation. “With the marketing plan we proposed, we believe the Lottery’s growth trajectory will continue and further benefit education in the state of Missouri.”

In fiscal year 2010, the Missouri Lottery generated $972 million in retail sales, of which $638 million were derived from instant ticket game sales.

As a New York based company, the win for SG was almost automatic. New York Lottery selected SG as the primary vendor and selected GTECH and Pollard Banknote Limited as alternate printers. The new contract will take effect upon expiration of the existing contract on July 28, 2011.

“Printing lottery instant tickets is a highly specialized process,” said Gordon Medenica, Director, New York Lottery in the release. “We have had very good experience with all three companies over many years. The final selection of a primary printer versus alternate printers was the result of a detailed evaluation process and a thorough analysis of the capabilities of each bidder.”

As the primary vendor, SG will provide marketing services, including research, game design and retail support, and they will receive a minimum of 50 percent of the printing work. As alternate vendors, GTECH and Pollard will receive specific ticket printing assignments as selected by the Lottery. In the last year, Scientific Games received $17.7 million for instant ticket services provided under the terms of its current contract with the New York Lottery.

As the primary vendor, Scientific Games will be able to earn performance awards based on hitting various benchmark levels of sales and profits.

“It’s a win-win situation for both the Lottery and the vendor,” Mr. Medenica added.

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