Scientific Games revenue spikes following Bally acquisition

scientific-games-bally-technologiesGaming and lottery technology supplier Scientific Games Corp (SGMS) revenue jumped 29% in Q4 thanks to contributions from the recently acquired Bally Technologies.

Revenue in the three months ending Dec. 31 hit $565.8m, counting 40 days of Bally contributions since the $5.1b acquisition officially closed in November. Despite the windfall, $75.8m in costs related to that acquisition created a net loss of $47.1m for the quarter. SGMS finished the year with $8.5b in debt, up from $3.2b in 2013.

SGMS’ gaming division, which includes not only Bally’s slot machine operations but 2013’s big acquisition WMS Industries, saw revenue nearly double to $301.7m. This sum is broken down into gaming operations ($134.8m), gaming machine sales ($119.2m), gaming systems ($27.7m) and table products ($20m).

SGMS’ interactive division reported revenue up 43.3% to $43m thanks to a full quarter of contributions from WMS’ Williams Interactive operations. Social gaming, particularly the Jackpot Party Social Casino and the new Gold Fish Slots app, was credited with driving most of the interactive gains. The ranks of daily and monthly average users posted good gains but average revenue per daily average user fell 15% to $0.22.

The quarter saw the launch of real-money desktop gaming products with eight new customers and nine more for mobile, including sites in New Jersey. On the analyst call, SGMS CEO Gavin Isaacs said the company was investing more in the “the roll out of the real money gaming part of interactive, and so we’re spending a bit more there that’s having an impact on the overall margin of the business.”

Lottery revenue was flat at $221.1m. Instant games were up 2.6% to $140.6m and product sales rose 10% to $28.4m but services revenue fell 9% to $52.1m thanks to the loss of the Colorado lottery systems contract on Oct. 1.