While 2019 is not even 100 days old, it has already been quite a year at Scientific Games Corp. That continued on Tuesday when the company announced that they would be issuing a series of senior unsecured notes valued at $1.1 billion to help pay for a series of unsecured notes set to mature in the year 2022. The newly offered notes will mature in 2026.
The fourth quarter of 2018 proved to be a very lucrative one for Scientific Games, as the company announced that they had a net profit of $206.8 million. That was an increase of nearly $250 million from the fourth quarter of 2017.
Not only did the company see dramatic increases in their gaming operations, but they were able to settle a dispute with Shuttle Tech for a significantly smaller amount then what they were expecting to pay. The company was expecting to spend nearly $335 million as part of an intellectual property dispute, but that number decreased by over $180 million, helping to bolster the company’s long-term prognosis.
In January, Matt Davey took over as the new digital chief at Scientific Games. This became part of an overhaul of the senior management team at SGC which included the naming of Jordan Levin as the new Executive Vice President.
On January 8, SGC announced a deal with the Oneida Indian nation in New York to provide all of the gaming technology for their three casinos located in the upper part of the state. With sports gambling being legalized in a recent Supreme Court decision, it was expected that a large number of states would offer legalized gambling on sporting events. The Oneida nation was quick to seize on the likelihood of this occurring by signing a deal with Scientific Games to provide the technology through their OpenBet platform.
Just eight days later, SGC would sign a deal with Paddy Power Betfair opening their platform in countries such as the United Kingdom, Ireland, and Italy. That gave Paddy Power access to 2000 casino titles offered by SGC’s Digital component. This not only built a closer relationship between the two organizations but gave additional avenues for the OpenBet platform to be expanded.
With a large number of additional sources of revenue coming online, the company has now decided its time to pay off $1 billion in unsecured notes that were expected to mature in 2022. Despite the significant fourth-quarter profit, the company still lost $353 million in 2018, an increased loss of $110 million from the previous year.
There is a concern of whether they would be able to pay off the unsecured notes in 2022 even with the additional sources of revenue. However, this gives the company a little breathing room while their other ventures bloom.
