Scientific Games SGMS is banking on sports betting at various locations in the United States to strengthen its foothold in the gaming industry.
Recently, the company announced a partnership with FireKeepers Casino Hotel in Battle Creek, MI to launch sports betting and iGaming across the state.
The partnership comes after Michigan governor Gretchen Whitmer signed House Bill 4916 — the Lawful Sports Betting Act last month, which allows the Michigan Gaming Control Board to issue sports gambling licenses to tribal casinos, as well as the three commercial casinos in Detroit. This made Michigan the 20th state in the United States to pass sports betting regulations. Michigan sports betting licenses will cost $100,000, and be renewed annually at $50,000. Tribal sportsbooks will be taxed at 8.4%.
Scientific Games Corp Price and Consensus
Scientific Games Corp price-consensus-chart | Scientific Games Corp Quote
FireKeepers Casino will use Scientific Games’ OpenSports sportsbook solution to power both its online and retail sports betting operation.
On-site sports gambling will be the first service offered in the casino at Dacey's Taphouse. Once approved by state and tribal regulators, Scientific Games’ portfolio of slot games available in the United States will be launched online for players across the state.
Notably, in early January, operators like PointsBet and The Stars Group signed market access agreements with Michigan tribal casinos to offer sports betting and iGaming.
Additionally, FireKeepers’ new products will also involve Don Bets Sports, a leading managed trading service from Scientific Games. Don Best Sports will allow the casino access to end-to-end retail sports betting solutions as well as a comprehensive data feed.
Moreover, FireKeepers will also receive iGaming content through Scientific Games’ OpenGaming content aggregation platform.
Sports Betting Offers Solid Opportunities
Per a Bloomberg report, Scientific Games provides game technology and sports betting solutions to more than 150 lotteries in 50 countries globally. It also includes 30 lotteries across the United States, Canada, Europe and Asia.
The sports betting market has been gaining significant traction in recent times. Per Research and Markets reports, globally, this market is expected to witness compound annual growth rate (CAGR) of 10% during the period 2019-2023.
The company is well poised to benefit from the massive growth opportunities in the sports betting market through global expansion and new partnerships. This is also expected to help its share-price rebound in 2020. Notably, shares have underperformed the industry in a year’s time.
Scientific Games is expected to benefit from expanding opportunities in the emerging digital market worth $20 billion. The company intends to become a pre-eminent player in the iGaming market in the long haul.
The company’s digital segment consists of iGaming, B2B interactive and sports betting. In third-quarter 2019, digital revenues and AEBITDA increased 7% and 42% year over year on growth in existing accounts and new deal wins.
Zacks Rank & Other Stocks to Consider
Scientific Games currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader technology sector are Synopsys SNPS, Perficient, Inc. PRFT and Keysight Technologies KEYS, each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth rate for Synopsys, Perficient and Keysight is currently pegged at 12.8%, 11.8% and 9.1%, respectively.
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