How Scientific Games Selling Sports Betting Business Could Ripple In US

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Scientific Games

Scientific Games is selling off its sports betting business in order to focus on its core competency of gaming. 

The B2B provider announced Tuesday it was divesting its lottery and sports betting businesses in separate transactions.

How will SG flip sportsbook business?

SG said it will consider:

The company said it was looking at “all avenues” in order to maximize the value of the sales.

“We are very well advanced in the process,” a company spokesperson said Tuesday.

SG to focus on gaming

Following the divestitures, the SG business will consist of:

Proceeds from the sales will be used to pay down debt and invest in the remaining business.

Big deal for US sports betting

The announcement could have major ramifications in US sports betting, with SG supplying multiple operators.  Current partners include:

Could one of them make a play to bring their tech in-house like DraftKings did with SBTech?

European giants like Flutter and Entain also rely on SG Digital in parts of their tech stack. They could make sense as potential bidders. 

Of course, any deal would have a knock-on effect on SG’s other operator partners.

B2B bidders

Multiple providers in the industry could also consider the acquisition to beef up their sports betting capabilities. That list includes:

As for going public, former SG Digital CEO Matt Davey is currently heading up a SPAC on the lookout for a target.

That would make for an interesting reunion.

What is actually up for sale?

The SG sports betting business includes: 

SG said the timing and value of the transaction would be “decided by the market.” Some industry sources raised some concerns about the age and complexity of the tech stack.

Smart move for Scientific Games

One analyst said a move away from sports betting is right for Sci Games.

“It makes total sense for SG to divest this and concentrate on the core business,” said Jeevan Jeyaratnam, the COO at B2B sports betting firm Abelson Odds.

“From the outside, SG had a sound plan on paper of creating a sports betting hub for any third-party to integrate to. But they appear to have found the reality of creating that paradise somewhat tougher.”

Scientific Games’ share price was last up 2% to $77.65.