Scientific Games' Joint Venture Signs Services Agreement with New Jersey
NEW YORK, June 21, 2013
NEW YORK, June 21, 2013 /PRNewswire/ -- Scientific Games Corporation (Nasdaq:
SGMS) today announced that Northstar New Jersey Lottery Group, LLC ("Northstar
NJ") has signed along-term agreement to provide marketing, sales and other
services to the New Jersey Lottery.Services under the agreement are expected
to begin on October 1, 2013 following a transition period and end on June
30,2029. Northstar NJ is a joint venture comprised of Scientific Games New
Jersey LLC, a subsidiary of Scientific Games Corporation, GTECH Corporation, a
subsidiary of GTECH S.p.A. ("GTECH"), and OSI LTT NJ Grantor Trust ("OSI"), an
affiliated entity of OMERS Administration Corporation, the administrator of
the Ontario Municipal Employees Retirement System pension funds (OMERS).
Scientific Games New Jersey, LLC owns approximately 18% of Northstar NJ. An
entity comprised of GTECH and OSI owns approximately 82% of Northstar NJ.
Northstar NJ will provide a wide range of specialized services to the Lottery
that will focus on strengthening its marketing and sales functions and will
include support for lottery game development, marketing and advertising, as
well as the procurement of related goods and services. All of these activities
will be subject to control and oversight by the Lottery.
Under the terms of the agreement, Northstar NJ will be entitled to receive
annual incentivecompensation to the extent the Lottery's net income for the
applicable year exceeds specified target levels, subject to a cap of 5%
ofsuch net income. Northstar NJ will be responsible for payments to the
State to the extent the Lottery net income targets set forth in Northstar NJ's
successful bid are not achieved, subject to a cap of 2% of the applicable
year's net income and a $20 million shortfall payment credit. Upon execution
of this agreement, Northstar NJ made a $120 million payment to the State,
andNorthstar NJhas committed to ensuring that at least 30% of annuallottery
ticket revenues will be transferred to State institutions and State aid for
Under separate supply agreements, Scientific Games and GTECH will provide
Northstar NJ with instant lottery games, lottery systems and equipment, and
related services. Scientific Games is expected to have a 30 percent economic
interest (and be responsible for 30 percent of the capital requirements)
associated withthese supply arrangements.
"We look forward to working with the New Jersey Lottery, with whom we have a
good working relationship, to responsibly grow lottery revenue for the State,"
stated A. Lorne Weil, Chairman and Chief Executive Officer of Scientific
Games. "We applaud the Lottery forits innovative business model, which will
bring in significant resources in terms of capital, talent and entertaining
products, to help establish the New Jersey Lottery as an industry leader in
terms of both performance and innovation."
About Scientific Games
Scientific Games Corporation is a global leader in providing customized,
end-to-end gaming solutions to lottery and gaming organizations worldwide.
Scientific Games' integrated array of products and services includes instant
lottery games, lottery gaming systems, terminals and services, and internet
applications, as well as server-based interactive gaming terminals and
associated gaming control systems. For more information, please visit our
website at www.scientificgames.com.
Cindi Buckwalter, Investor Relations
In this press release, the Company makes "forward-looking statements" within
the meaning of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements describe future expectations, plans, results or
strategies and can often be identified by the use of terminology such as
"may," "will," "estimate," "intend," "continue," "believe," "expect,"
"anticipate," "should," "could," "potential," "opportunity," or similar
terminology. These statements are based upon management's current
expectations, assumptions and estimates and are not guarantees of future
results or performance. Actual results may differ materially from those
contemplated in these statements due to a variety of risks and uncertainties
and other factors, including, among other things: competition; material
adverse changes in economic and industry conditions; technological change;
retention and renewal of existing contracts and entry into new or revised
contracts; availability and adequacy of cash flows to satisfy obligations and
indebtedness or future needs; protection of intellectual property; security
and integrity of software and systems; laws and government regulation,
including those relating to gaming licenses, permits and operations; inability
to identify, complete and integrate future acquisitions; inability to benefit
from, and risks associated with, strategic equity investments and
relationships; failure of our Northstar Illinois joint venture to meet the net
income targets or otherwise to realize the anticipated benefits under its
private management agreement with the Illinois Lottery; failure of our
Northstar New Jersey joint venture to meet the net income targets or other
requirements underits agreement to provide marketing and sales services to
the New Jersey Lottery or otherwise to realize the anticipated benefits
undersuch agreement (including as a result of a protest); the seasonality of
our business; failure to complete the pending acquisition of WMS Industries
Inc. ("WMS") on a timely basis or at all, including due to the inability to
obtain the gaming regulatory approvals required to complete the acquisition;
disruption of our current plans and operations in connection with the WMS
acquisition; failure to achieve the intended benefits of the WMS acquisition,
including due to the inability to realize synergies in the anticipated amounts
or within the contemplated time-frames or cost expectations, or at all;
inability to identify and capitalize on trends and changes in the lottery and
gaming industries, including the potential expansion of regulated gaming via
the internet; inability to enhance and develop successful gaming concepts;
dependence on suppliers and manufacturers; liability for product defects;
fluctuations in foreign currency exchange rates and other factors associated
with international operations; influence of certain stockholders; dependence
on key personnel; failure to perform under our contracts; resolution of
pending or future litigation; labor matters and stock price volatility.
Additional information regarding risks and uncertainties and other factors
that could cause actual results to differ materially from those contemplated
in forward-looking statements is included from time to time in the Company's
filings with the Securities and Exchange Commission ("SEC"), including under
the heading "Risk Factors" in the Company's Annual Report on Form 10-K filed
with the SEC on March 12, 2013 and in its subsequent periodic reports.
Forward-looking statements speak only as of the date they are made and, except
for the Company's ongoing obligations under the U.S. federal securities laws,
the Company undertakes no obligation to publicly update any forward-looking
statements whether as a result of new information, future events or otherwise.
SOURCE Scientific Games Corporation
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