On Wednesday, slot machine and lottery servicer Scientific Games Corporation (“SciGames”) announced its acquisition of Canadian digital gaming leader NYX Gaming Group (“NYX”) for roughly $632 million U.S. dollars, a move that will provide a foothold in the potential U.S. sports betting market. NYX owns OpenBet, a London-based sportsbook and gaming software company with offices around the world.
Scientific Games is Clear With Its Intention to Enter a Sports Betting Market in the U.S., Pending Regulatory Changes
From the company’s press release in a section regarding “strategic benefits”:
Adds #1 Global Sports Betting Platform to Scientific Games’ Strong Portfolio – Scientific Games will now be perfectly positioned to capitalize on future regulatory developments in real-money wagering and sports betting by adding NYX’s industry-leading OpenBet Sportsbook. NYX’s digital Sportsbook can be seamlessly delivered throughout Scientific Games’ global gaming and lottery networks in existing and future regulated U.S. and global markets.
It’s a cash and debt-funded deal. SciGames is on the NASDAQ stock exchange (SGMS) where its share price is largely unchanged (as of its Wednesday closing) from $43.10 where it closed on Tuesday.
Two months ago, Scientific Games announced its acquisition of the UK-based Red7Mobile, which develops sports apps and mobile casino games for its gaming partners. Since that time in mid-July, SciGames’ share price has nearly doubled from $24.65.
Some more details about SciGames plans, from the press release:
It is expected that upon completion of the transaction, Matt Davey, currently Chief Executive Officer of NYX, will oversee a newly created Digital Gaming and Sports division at Scientific Games, working with the leadership of NYX and SG Interactive, including Leigh Nissim, Managing Director, B2B Interactive of Scientific Games. Matt Davey will report to Kevin Sheehan, Chief Executive Officer and President of Scientific Games.
Like the state of Kentucky, which on Wednesday saw state senator Julian Carroll introduce a bill that would establish a framework for sports betting in the state, the company is preparing for the eventuality that sports betting gets legalized in the U.S.
The quickest route to that end would be a New Jersey victory in the United States Supreme Court’s October term in its case against the NCAA, NFL and major sports leagues. New Jersey is seeking to have the law known as PASPA (Professional and Amateur Sports Protection Act), which prohibits states from legalizing sports betting, ruled unconstitutional.