Scientific Games Announces its Joint Venture Selected for Illinois Lottery Private Management Agreement

NEW YORK, Sept. 16 /PRNewswire-FirstCall/ -- Scientific Games Corporation (Nasdaq: SGMS) today announced that Illinois Governor Pat Quinn has selected Northstar Lottery Group, LLC ("Northstar") as the private manager for the Illinois Lottery for a ten-year term.  Northstar is a joint venture between Scientific Games and GTECH Corporation, a subsidiary of Lottomatica Group S.p.A. (LTO.MI), two best-in-class lottery companies with more than 50 years of combined experience as vendors in Illinois.  Scientific Games will have a 20% equity interest in the joint venture.

The private manager award is the first of its kind in the U.S. lottery industry.

As the private manager, Northstar will be responsible for the day-to-day operations of the Illinois Lottery and its core functions, including lottery game development, supply of goods and services, and marketing and advertising, among other services, subject to oversight by the lottery.  The private management agreement is expected to be signed within the next several weeks. Operations under the new arrangement are scheduled to commence on July 1, 2011 following a transition period.

Scientific Games will be responsible for the design, development, manufacturing, warehousing and distribution of instant lottery tickets and will be compensated based on a percentage of retail sales.  Scientific Games will also be entitled to its pro rata share of Northstar's earnings.  Under the contemplated terms of the private management agreement, Northstar will receive annual incentive compensation payments to the extent it is successful in increasing the Illinois Lottery's net income above certain target levels, subject to a cap of 5% of the applicable year's net income.  Northstar will be responsible for payments to the State of Illinois to the extent such targets are not achieved, subject to a similar cap.  Northstar is expected to be reimbursed for most of its operating expenses under the arrangement.

"As a member of the Northstar Lottery Group, we look forward to the opportunity to responsibly drive sales growth and returns to Illinois," stated Michael R. Chambrello, President and Chief Executive Officer of Scientific Games.  "This award represents a paradigm shift for the U.S. lottery industry as it is the first instance that a commercial enterprise has been charged with the duty of fulfilling a state's statutory mandate that a lottery responsibly generate additional revenue for good causes.  We are proud to be a part of the Illinois Lottery's progressive efforts and we see this as an opportunity to prove to policy makers across the country how meaningful a commercial business model can be to their State and its residents."

About Scientific Games

Scientific Games Corporation is a leading integrated supplier of instant tickets, systems and services to lotteries worldwide, a leading supplier of server-based gaming machines and systems, Amusement and Skill with Prize betting terminals, interactive sports betting terminals and systems, and wagering systems and services to pari-mutuel operators.  It is also a licensed pari-mutuel gaming operator in Connecticut, Maine and the Netherlands.  The Company's customers are in the United States and approximately 50 other countries.  For more information about the Company, please visit our website at www.scientificgames.com.

Forward-Looking Statements

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," "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 projected in these statements due to a variety of risks and uncertainties and other factors, including, among other things: failure to enter into the Illinois Lottery private management agreement (including as a result of a protest) or failure to meet the related net income targets or otherwise realize the anticipated benefits under such agreement; 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 flow 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, joint ventures and strategic investments and relationships; inability to complete the proposed sale of the racing and venue management businesses; seasonality; inability to identify and capitalize on trends and changes in the lottery and gaming industries; 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 foreign operations; influence of certain stockholders; dependence on key personnel; failure to perform on 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. 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