Niedersachsen GmbH of Hanover
NEW YORK, Oct. 10 - Scientific Games (Nasdaq: SGMS) announced today that its German subsidiary Scientific Games Honsel GmbH was awarded two contracts with Toto-Lotto Niedersachsen GmbH, the state lottery of Niedersachsen (Lower Saxony) based in Hanover - one to supply instant lottery tickets, and the other for distribution and consulting services.
The two contracts begin March 1, 2006 and will run for five years, with options to extend for additional two-year increments. Scientific Games Honsel will handle the supply and distribution of instant tickets throughout Lower Saxony for Toto-Lotto Niedersachsen, including shipping, warehousing, communications, and will advise on game design and marketing issues. Revenues to Scientific Games Honsel will be based on a percentage of sales. Lower Saxony has a population of 8 million, about the same as the U.S. State of Georgia and approximately 10 percent of the population of Germany.
"We believe there is enormous potential throughout Lower Saxony for instant ticket sales," said Scientific Games CEO and Chairman Lorne Weil. "In fact, considering how well the German lotteries have functioned in the past few years, and how much money they have returned to the states, we're expecting the games to have an immediate impact on the performance of the lottery."
According to Weil, instant tickets account for only 3% of German lottery sales in an 8.5 billion Euros lottery market. This is a sharp contrast to the American market, where instants provide more than half of total sales. Nonetheless, he said, in the past few years since Scientific Games won the contracts in the UK, France and Italy, sales of instant tickets began to grow at a substantially faster rate.
"Partnering with Scientific Games Honsel gives us access to the industry's most sophisticated lottery management tools and a deep pool of lottery experience, especially in the European market," said Rolf Stypmann, Managing Director of Toto-Lotto Niedersachsen GmbH. "The potential sales growth here in Hanover could be enormous."
"This bodes well not just for the lottery, but for the public we serve," added Stypmann, "Without a successful lottery, we would not be able to support the public programs that we currently fund in Lower Saxony, programs that reach thousands of our people every day."
"We've worked well with Toto-Lotto Niedersachsen for many years and these new contracts take that close relationship to a new level, one that will help realize the potential of instants in Lower Saxony," said Klaus Honsel, Managing Director of Scientific Games Honsel.
About Scientific Games
Scientific Games Corporation is the leading integrated supplier of instant tickets, systems and services to lotteries, and the leading supplier of wagering systems and services to pari-mutuel operators. It is also a licensed pari-mutuel gaming operator in Connecticut and the Netherlands and is a leading supplier of prepaid phone cards to telephone companies. Scientific Games' customers are in the United States and more than 60 other countries. For more information about Scientific Games, please visit our web site at http://www.scientificgames.com.
Forward-Looking Statements
In this press release we make "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "may," "will," "estimate," "intend," "continue," "believe," "expect" or "anticipate," or the negatives thereof, variations thereon or similar terminology.
These forward-looking statements generally relate to plans and objectives for future operations and are based upon management's reasonable estimates of future results or trends. Although we believe that the plans and objectives reflected in or suggested by such forward-looking statements are reasonable, such plans or objectives may not be achieved.
Actual results may differ from projected results due, but not limited, to unforeseen developments, including developments relating to the following:
-- economic, competitive, demographic, business and other conditions in
our local and regional markets;
-- changes or developments in the laws, regulations or taxes in the
gaming and lottery industries;
-- actions taken or omitted to be taken by third parties, including
customers, suppliers, competitors, members and shareholders, as well
as legislative, regulatory, judicial and other governmental
authorities;
-- changes in business strategy, capital improvements, development plans,
including those due to environmental remediation concerns, or changes
in personnel or their compensation, including federal, state and local
minimum wage requirements;
-- the availability and adequacy of our cash flow to satisfy our
obligations, including our debt service obligations and our need for
additional funds required to support capital improvements, development
and acquisitions;
-- an inability to renew or early termination of our contracts;
-- an inability to engage in future acquisitions;
-- the loss of any license or permit, including the failure to obtain an
unconditional renewal of a required gaming license on a timely basis;
and
-- resolution of any pending or future litigation in a manner adverse to
us.
Actual future results may be materially different from what we expect. We will not update forward-looking statements even though our situation may change in the future.
Forward-looking statements speak only as of the date they are made, and except for our ongoing obligations under the U.S. federal securities laws, we undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.
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Scientific Games Corporation
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