NEW YORK (AP) — Casino-equipment maker Scientific Games Corp. should benefit from the National Football League’s recent vote to allow teams to sign license deals with state lotteries for instant tickets, an analyst said Monday.
Given its previous success with Major League Baseball and the NBA, we believe Scientific Games should be the primary provider of these license agreements, which could be a nice boost to instant ticket revenue, starting this fall,” Robert Evans of Craig Hallum Capital said in a client note.
While the NFL could provide a boon to business, New York-based Scientific Games faces some uncertainty on an existing Italian instant ticket contract which the company shares with Lottamattica and other local businesses.
Evans says local media reports indicate the contract may go up for bids instead of being renegotiated. But the analyst is still confident Scientific Games could retain the business.
“Given that this lottery has been built from $500 million euros ($703.1 million) to almost $10 billion euros ($14.06 billion) by the current consortium, with Scientific Games being a key reason for this success, we believe a renewal of this contract at a discounted price is the more likely scenario,” he said.
Evans maintained an “Accumulate” rating but lowered his price target to $23 from $24 after lowering his 2009 and 2010 net earnings before interest, taxes, depreciation and amortization estimates on some repriced contracts and a $225 million subordinated notes offering.
Shares of Scientific Games added 36 cents to $16.58 in morning trading.
