Autotote Completes Acquisition of Scientific Games

- Integration Plan in Place to Combine Capabilities in Pari-Mutuel,

Lottery and Prepaid Phone Card Businesses -

Sep 06, 2000, 01:00 ET from Autotote Corporation

    NEW YORK and ALPHARETTA, Ga., Sept. 6 /PRNewswire/ -- Autotote Corporation
 (Amex:   TTE) and Scientific Games Holdings Corp. (NYSE:   SG) announced today
 that the acquisition of Scientific Games for $308 million, or $26.00 per
 share, has been completed.  To finance the acquisition and repay existing
 debt, Autotote issued $280 million in senior secured loans and $150 million in
 Senior Subordinated Notes.  Autotote also issued $110 million of new
 convertible preferred stock, $100 million to an affiliate of Lottomatica
 S.p.A., the state concessionaire for the Italian Lotto game and an affiliate
 of Olivetti S.p.A. and Telecom Italia S.p.A., and $10 million to other
 investors through Ramius Securities, LLC, who acted as the preferred stock
 placement agent.  Donaldson Lufkin & Jenrette advised Autotote on the
 acquisition transaction and Salomon Smith Barney advised Scientific Games.
     Lorne Weil, Chairman and CEO of Autotote, said, "As a result of the
 Scientific Games acquisition, we are the largest provider of services, systems
 and products to both the pari-mutuel gaming and instant ticket lottery
 industries, and we believe we are the only fully integrated lottery service
 provider.  On an unaudited combined pro forma basis, we would have generated
 revenues of approximately $450 million and EBITDA of approximately
 $100 million for the last twelve months."
     "This transaction demonstrates our commitment to both the pari-mutuel and
 lottery businesses and our conviction that these businesses should thrive as
 we execute our integration and expansion plans.  It sets the stage for what
 could be the future expansion of the entire pari-mutuel and lottery industries
 through new games, distribution channels and entertainment options.  Over the
 past few years, we have achieved significant cost savings in our pari-mutuel
 businesses.  We continue to invest in the business to achieve further
 efficiencies through such programs as the consolidation of hubs and the
 application of the latest compression technology.  We are also continuing to
 invest in racing such as our joint venture to develop the first global
 web-based pari-mutuel service with Arena Leisure plc.  By applying the same
 business strategy to the lottery business, we should realize comparable
 savings and even faster growth."
     "We have been actively pursuing the integration of the two companies for
 the last couple of months and we have already begun to share ideas on
 technology, new products and new markets that we can now pursue.  Because of
 this careful planning, we are ready to move quickly to take advantage of these
 significant synergies:
     - We expect to leverage our products, technologies and relationships to
       our lottery, racing and telecommunications customers.  Combined, we have
       customer relationships in over 60 countries and 44 U.S. states and
       believe we have the potential to achieve a market share internationally
       commensurate with our approximately 68% share of the U.S. instant ticket
       market and our share of approximately 65% of the North American
       pari-mutuel market.
     - We will continue to offer highly innovative games.  Our lottery business
       developed the proprietary technologies to offer secure probability games
       where every ticket could be a winner.  Field trials without mass
       marketing have significantly increased total ticket sales.  Six state
       lotteries are either actively selling or are seriously considering
       deploying our proprietary probability games.  We have installed or have
       orders for 26,000 SciScan Technology(R) terminals that can validate the
       embedded electronic circuits in our Winner's Choice(TM) probability
     - We are in the process of integrating Autotote Lottery Corporation into
       Scientific Games.  Autotote Lottery was awarded four of the last seven
       domestic on-line lottery contracts on which it bid and Scientific Games
       has 41 on-line and instant ticket validation system customers,
       principally overseas.  Over the next three years, seven domestic on-line
       contracts will come up for bid that are currently held by our
       competitors.  Since these contracts represented 21% of domestic on-line
       retail lottery revenues in 1999, we intend to be very aggressive
       wherever it makes economic sense.
     - Scientific Games has applied its lottery technologies to prepaid phone
       cards and has created a high growth business in this important
       business-to-business segment.  For the six months ended June 2000,
       prepaid phone cards generated $21.5 million in revenues compared to
       $6.7 million for the comparable period in 1999.  We expect continued
       growth as cellular subscribers in Europe grow from 154 million in 1999
       to a forecasted 304 million in 2003 and prepaid services continue to
       increase from 29% to an estimated 41% of global subscribers (Sources:
       Baskerville Communications and FT Mobile Communications).
     - We have made substantial investments to reduce our cost of operations
       and expand our printing capacity.  This month our new line in
       Alpharetta, Georgia was launched and we expect it to generate an
       estimated $5.1 million in annual cost savings and to increase annual
       capacity by approximately 3.5 billion tickets or 25%.  We are also
       consolidating printing operations in the United Kingdom which should
       substantially lower our unit production costs for phone cards and
       increase our capacity from 120 million cards in early 1999 to an
       estimated 1 billion cards by early 2001.
     Mr. Weil continued, "Autotote's ability to execute its business plan is
 stronger than ever before.  We have refinanced our existing debt and now have
 a positive net worth.  William G. Malloy, previously Chairman and Chief
 Executive Officer of Scientific Games, will join Autotote's board of
 directors.  Cliff Bickell, who was Vice President and Chief Financial Officer
 at Scientific Games, will be President, Scientific Games International,
 Printed Products.  Bill Huntley, who had headed Autotote's lottery division
 during its recent accelerated growth phase, will now be President, Scientific
 Games International, Systems.  Both Mr. Bickell and Mr. Huntley will report to
 me.  This team allows Autotote to utilize the extensive experience and
 dedication of these managers to pursue our strategy to maintain our leadership
 in the pari-mutuel business and the lottery business, as well as develop the
 prepaid phone card opportunity to the fullest extent."
     Autotote will host a conference call for investors and the media on
 Thursday, September 7 at 2:30 pm ET to discuss the financial results and the
 completion of its acquisition of Scientific Games.  The call will be broadcast
 live and archived for ninety days on  Questions can be
 emailed to
     Autotote Corporation, after giving effect to the acquisition of Scientific
 Games, is the leading integrated supplier of instant tickets, systems and
 services to lotteries, the leading supplier of wagering systems and services
 to pari-mutuel operators, a leading supplier of prepaid phone cards to
 telephone operators and also is a licensed pari-mutuel gaming operator in
 Connecticut, Holland and Germany.  Autotote's customers are in the United
 States and more than 60 other countries. For more information about AUTOTOTE,
 please visit the company's website at
     This press release includes statements that constitute forward-looking
 statements made pursuant to the safe harbor provisions of the Private
 Securities Litigation Reform Act of 1995.  This information involves risks and
 uncertainties that could cause actual results to differ materially from the
 forward-looking statements.  For certain information regarding these risks and
 uncertainties, reference is made to Autotote's Annual Report on Form 10-K for
 the year ended October 31, 1999 and Scientific Games' Annual Report and Form
 10-K for the year ended December 31, 1999 and proxy statement with respect to
 the August 8, 2000 special meeting.

SOURCE Autotote Corporation