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Scientific Games And Bally Technologies: Stronger Together

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Integration advantages

The November 2014 merger of Scientific Games (SGMS) and Bally Technologies, or Bally, creates a leading gaming and lottery entertainment and technology company. The integration of the two companies enables Scientific Games, or SGMS, to expand its geographical footprint, particularly in the fast-growing Australasia region. It also provides customers the tools and technologies needed to increase revenue and drive operating efficiencies.

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Expanded portfolio

By merging with Bally, SGMS has become the most diversified global gaming and lottery supplier. The company is now prepared to support various customer business objectives with a wider range of products and services. SGMS can also offer customers a larger portfolio of innovative content that can be used across different platforms.

Industry consolidation

With the mergers of the Bally, WMS Industries, Shuffle Master, the Scientific Games Lottery, Williams Interactive, MDI, and SG Gaming brands, we see a combination of interactive systems, platforms, and gaming product brands. This enables multi-channel distribution to all land-based, social, mobile, and casual online platforms under the Scientific Games corporate brand.

The consolidated suite of SGMS products include lottery terminals and systems, responsive service programs, industry-leading casino and slot management systems, table utility products such as shufflers and chip sorters, and state-of-the-art gaming cabinets.

SGMS expects to enhance its margins and grow free cash flow to build long-term value for its shareholders. SGMS, WMS Industries, and Bally each have unique portfolios with a wide variety of player preferences that could help drive revenues.

In other merger news, last year, International Game Technology (IGT) agreed to merge with GTECH, an Italian company that provides and operates online lottery transaction processing systems.

The VanEck Vectors Gaming ETF (BJK), the PowerShares Dynamic Leisure and Entertainment Portfolio ETF (PEJ), and the Consumer Discretionary Select Sector SPDR Fund (XLY) invest in leisure companies.

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