Public Gaming International • September/October 2014
40
Paul Jason, Public Gaming:
What ex-
actly is meant by consolidation? Who and
what is consolidating in our industry and
for what purpose?
Jim Kennedy:
Consolidation is simply
a natural phase that drives the economic
system across all industries. It is driven by
economics—the drive of companies to suc-
ceed by positioning themselves to produce
and deliver better products at efficient pric-
es. The consolidation of independent retail
stores into multi-state operations, for in-
stance, is producing an improved consumer
shopping experience, more efficient opera-
tions and lower prices for the consumer. It
is simply more efficient, effective and prof-
itable to operate as a cross-jurisdictional
retail organization, and it enables the en-
terprise to offer products and services at a
higher quality and greater value on a more
consistent basis and in a more cost-effective
way. Another example of this can be seen
in the consolidation of media companies,
which enables the integration of nationwide
multimedia campaigns so that they are more
impactful while drastically reducing the cost
per consumer impression.
The consolidation independently taking
place in the lottery industry and the gaming
industry—and in these two industries to-
gether—should result in better game content
being delivered through multiple channels
of distribution, media and consumer points
of access. Combining and integrating corpo-
rate assets via mergers and acquisitions en-
hances the ability of the modern enterprise
to compete, deliver shareholder value and
create unique customer value. The success
of Scientific Games lies in our ability to de-
liver the best products and services—and
the best value—to our customers.
Independent from one another, Scientific
Games, WMS and Bally are all world-class
businesses, supplying excellent products
and services to the gaming and lottery in-
dustry. Why should they all be brought un-
der the one corporate umbrella? Who ben-
efits and why?
J. Kennedy:
We completed our acquisi-
tion of WMS late in 2013 and we are now
almost at the one-year mark of our business
integration. On August 1, 2014, Scientific
Games entered into a definitive agreement
to acquire Bally Technologies, Inc. Cer-
tainly, we have already seen the benefits
from our integration with WMS. Our cus-
tomers benefit, our shareholders benefit and
the consumer benefits. Scientific Games
succeeds when we enable our government
lottery customers to increase sales, market
share and net profit performance. That goal
is achieved by enhancing the products and
services we provide. In our Lottery Group,
our direct customer is the government lot-
tery operator. But our games are delivered
to and purchased by consumers. Combining
game content, delivery systems, technolo-
gies and all of our resources under one cor-
porate umbrella greatly enhances the ability
of every one of our customers to connect
with their consumer, the player.
The mission of an individual state lot-
tery is largely to build its share of a targeted
market of traditional lottery players by mar-
keting and selling through traditional chan-
nels. Even within this context, there’s a lot
of room to innovate lottery games and to
expand the retail footprint—and Scientific
Games is more focused than ever on advanc-
ing this plan for our customers. For many,
though, the long-term business plan will be
to expand into new games, new channels
and new demographic markets. Our goal is
to innovate for our customers and create the
best game content and marketing programs
to reach consumers across multiple distribu-
tion channels. We bring together an indus-
try-leading portfolio of game content, game
development, distribution networks, insights
and technology resources. Each customer
we serve in every jurisdiction will benefit by
the depth and breadth of having this entire
portfolio of capabilities all under one roof.
The common thread behind consolidation
is cross-jurisdictional reach. That applies
to our industry just as it does to all others.
We may think of the lottery marketplace
as being defined by the borders of a juris-
PGRI Introduction:
This has
been an eventful year for the lottery
industry and for Scientific Games.
Changes are taking place across
the industry and progress is hap-
pening worldwide that promises
to change the face of government
lotteries. In this discussion with
Jim Kennedy, the changes are all
about consolidation, convergence
and content. The result of these
changes is creation of scale and a
cross-jurisdictional business mod-
el that helps position government
lotteries for a successful future by
keeping pace with shifting con-
sumer needs and maximizing ac-
cess to best distribution partners.
Public Gaming
Jim Kennedy
Executive Vice President,
Group Chief Executive
of Lottery, Scientific
Games Corporation
