Had it not been for the online casino operations, Scientific Games Corp (SGC), the companies’ losses in the third quarter of the year would have been worse. As a result, the gaming, betting and lottery software provider lost only $ 111 million.
During the presentation of its results, SGC reported revenues totaling $ 698 million for the three months ended september 30. A lower than the $ 855 million figure obtained in the same period in 2019, although higher than the $ 539 million that the second quarter of 2020 showed.
On SGC’s balance sheet, adjusted earnings saw a 31.6% drop to $ 235 million. The company’s net loss was $ 111 million compared to a profit of $ 18 million in the third quarter of last year.
The company’s worst performer was SGC’s core gaming division with revenue declining nearly 50% to $ 231 million. While profits fell two-thirds to $ 77 million, as a result of the closures of land-based casinos due to sanitary restrictions.
With the closures, revenues from active gaming machines fell along with the need for more gaming services. But the lottery division had a better quarter, as revenue increased 10% to $ 241 million and earnings a similar percentage to $ 109 million.
These gains were produced by a 20% increase in instant ticket sales throughout the country, added to a 50% increase in international product sales.
On the other hand, the social gaming unit SciPlay saw greater momentum due to the shutdowns caused by the pandemic. Revenues were up 30% to $ 151 million, while profits were up 54% to $ 32 million. The earnings were driven by gambling through mobile devices.
Revenues in this area had an increase of 36% to $ 132 million. While the desktop stock remained stable at $ 19 million. The number of average daily users (DAU) decreased slightly, but this was offset by an increase of more than a third ($ 0.63) in average revenue per DAU.
In the digital segment, where casino games, iLottery and sports betting are included, there was a significant increase of 15% to $ 75 million with profits rising from 47% to $ 17 million.
The New Jersey iGaming operations primarily saw growth of 22% to $ 44 million. As for ‘sports and platforms’ the increase was from just $ 2 million to $ 31 million. This was due in part to the delay in the opening of the Major League Baseball season after COVID-19 cases fell in the spring.
As sports betting has been expanding in the US, SGC’s digital sector revenue benefited in the third quarter. The company is focused on attracting digital customers, this includes the recent agreement signed with Hard Rock International in New Jersey and Iowa for the supply of its OpenSports software.
New ‘contactless’ systems
SGC Executive Vice President Michael Eklund on wednesday acknowledged the damage that a second wave of the virus will do to the casino industry. In this sense, he indicated that the hard lessons left by the second quarter have convinced the company “to bring the cost structure where it had to be” and admitted that it will be necessary “to go back there again if necessary.”
The company seeks to adapt to the new pandemic environment, through the development of disinfection modules to protect customers. Likewise, it works on the incorporation of a variety of electronic table games in which an adequate distance between customers is maintained.
The provider will also implement new ‘contactless’ systems, incorporating cashless payments into table games and slot machines. Barry Cottle, CEO of SGC, noted that the company had “developed really good intellectual property” in this field.
He also added that with the possession of 525,000 slots and some 5000 tables on the net, “we are already part of that last mile … between the wallet and the hole.” Before the end of the year, two large corporate clients of SGC are likely to implement the company’s cashless system.
These games would offer the company “multi-stream revenue, which is a combination of initial hardware along with software licenses, maintenance, etc.,” Cottle said.
Regarding the withdrawal of the company from the bidding process of the instant lottery in Brazil, where it was participating with its partner International Game Technology, Cottle explained that SGC did not make any “material investment” there, but said that “it would continue to explore opportunities in the country.”