Scientific Games enters definitive agreement to sell Lottery for $6.05bn

Image source: Deutschlandreform /

Scientific Games Corporation has confirmed that it has entered into a definitive agreement to sell its Lottery business to Brookfield Business Partners LP, together with its institutional partners, in a cash and earn-out deal worth $6.05bn.

The $5.825bn cash and $225m earn-out transaction will be based on the achievement of certain EBITDA targets in 2022 and 2023 and is expected to close in Q2 2022, subject to applicable regulatory approvals and customary closing conditions. SG Lottery will remain headquartered in metro-Atlanta with operations expected to continue around the world.

In acquiring Scientific Games’ Lottery business, Brookfield will be getting a diversified global lottery partner that holds long-standing relationships with approximately 130 government and non-government lottery entities in over 50 countries. 

SG President and CEO Barry Cottle commented: “This transaction is transformative in accelerating the delivery of our stated strategy to optimize our portfolio, aggressively de-lever our balance sheet and position us to invest in future growth. 

“We conducted a thorough review of paths to divest the Lottery business and we are confident that this transaction maximizes value and certainty while minimizing complexity and execution risk, and positions both Scientific Games and SG Lottery for continued success along their unique growth trajectories.” 

He added: “The significant near-term proceeds from this transaction as well as our previously announced sale of Sports Betting will transform our balance sheet and provide the financial flexibility to invest organically and inorganically to accelerate our strategies. This marks a major milestone and puts us on a clear path to achieve our vision to become the leading cross-platform global game company and unlock our full value for shareholders.”

Patrick McHugh, CE of Scientific Games Lottery, stated: “We are thrilled with this outcome and what it means for the future of Scientific Games Lottery and our customers. I am confident that, with Brookfield’s support, we will have the flexibility and agility to expand our deep product portfolio to meet our customers’ evolving needs and maximize lottery beneficiary proceeds across the globe, enabling us to capture the significant opportunities we see ahead.”

David Nowak, Managing Partner, Brookfield Business Partners, said of the deal: “The Scientific Games Lottery team has built a leading business, which has innovated its industry, at the convergence of games, technology and services, across retail and digital channels for its global customers. With our capabilities and global reach, we look forward to supporting management in the continued growth of the business.” 

SG Lottery has also entered into a transitional services agreement with Scientific Games Corporation whereby the latter will provide certain finance, information technology, regulatory compliance, legal, human resources and facilities at cost for an initial term of 12 months.

Scientific Games Corporation revealed plans to divest its sports betting and lottery businesses as part of a strategic review of the business in June this year. At the conclusion of the process, the newly strategized company will comprise three units; Gaming, iGaming and SciPlay, with a view to capitalizing on the increasing convergence of those businesses.