Scientific Games reports results

4 May 2007

NEW YORK – (PRESS RELEASE) -- Scientific Games Corporation (Nasdaq: SGMS) today reported first quarter 2007 revenues of $242.3 million, up 16 percent from $208.1 million in the first quarter of 2006. Net income was $24.8 million or $0.26 per diluted share, net of $7.1 million of stock compensation expense, up from net income of $22.4 million or $0.24 per diluted share in the first quarter of 2006. Non-GAAP adjusted net income before accelerated stock compensation expense (explained below) was $26.8 million or $0.28 per non-GAAP diluted share, and $29.9 million or $0.32 per non-GAAP diluted share before all stock compensation expense, compared to non-GAAP adjusted net income of $26.9 million or $0.29 per non-GAAP diluted share in the first quarter of 2006.

EBITDA for the first quarter of 2007 was $75.8 million, up 31 percent from $57.8 million in the first quarter of 2006. Excluding stock compensation expense, adjusted EBITDA increased 30 percent to $82.9 million for the first quarter of 2007, compared to adjusted EBITDA of $64.0 million for the first quarter of 2006.

During the first quarter of 2007 the Company recorded an accelerated stock compensation charge of $2.9 million or $0.02 per diluted share. The charge reflected a requirement to expense 100 percent of the fair market value of stock options and restricted stock units granted to certain key executives in February 2007 who are of retirement age, rather than being amortized over the five-year vesting period. Total stock compensation expense for the first quarter of 2007 was $7.1 million or $0.05 per diluted share.

"Printed Products service revenue showed a continued steady growth pattern at 12 percent in the first quarter," said Lorne Weil, Chairman and CEO. "'Same store' sales growth decelerated to 8 percent in the first quarter, partly as a result of production bottlenecks. We expect this to pick up in future quarters with the launch of new licensed property games and additional production capacity coming online."

Mr. Weil continued, "Italy's strong contribution was felt twofold in the first quarter, in the revenue line and from our 20 percent ownership of the Italian instant ticket joint venture which added to a record level of equity income. Our negotiations in China are progressing well as evidenced by the recent announcement of our contract in Shandong. And lastly, we expect the necessary instant ticket game approvals in Mexico sometime in the second quarter, and anticipate launching this summer."

Printed Products sales revenue in the first quarter was $9.3 million, a decrease of 34 percent from $14.1 million in the first quarter of 2006. The decline is primarily due to a continuing decline in phone card prices and volumes reflecting the market driven shift to lower priced products. Printed Products sales margins went from 24 percent in the first quarter of 2006 to 18 percent in the first quarter of 2007 due to pricing pressure and decreased economies of scale.

"Lottery Systems Group service revenue grew 3 percent during the first quarter," added Weil. "Excluding EssNet service revenue of approximately $3.4 million, new contract revenues and elapsed contracts, 'same store' sales decreased 1 percent. This was largely due to the absence of a $365 million Powerball jackpot that occurred in the first quarter of 2006, but was ameliorated by the growth of certain international business. We successfully launched the Mexican online lottery Multijuegos(R) with our partner Televisa with approximately 3,500 terminals in February 2007. As of this week, we currently have over 4,800 terminals installed, and expect to expand this installed base to 10,000 terminals by year end driven primarily by the addition of approximately 4,000 retailers from our largest chain-store customer." Lottery Systems sales revenue was $11.0 million, a decrease of 25 percent from $14.7 million in the first quarter of 2006. This is primarily due to the absence of an $8.2 million terminal sale in 2006, but includes a $5.2 million sale to the Ontario Lottery in 2007. Add-on sales of terminals and other equipment continued to suffer from legislative uncertainty in the German market.

"Diversified Gaming Group service revenue grew 70 percent, largely due to the addition of Global Draw," noted Mr. Weil. "Excluding $19.7 million of Global Draw service revenues, our pari-mutuel related businesses showed margin improvement despite flat revenue because of cost reduction initiatives. Customers continue to migrate over to the Quantum Data Centers, a development that should continue to improve margins in this segment."

Diversified Gaming Group sales revenue increased from $2.3 million in the first quarter of 2006 to $11.0 million in 2007, due to the acquisition of Games Media Limited which contributed $10.3 million of sales revenue in the quarter.

First quarter business development included a significant licensing deal with Hasbro, giving us global exclusive lottery rights to 20 Hasbro brands over multiple lottery platforms. The Company was also awarded an 11 year racing contract with the Camarero Group of Puerto Rico; an extension with the Connecticut Lottery for a new lottery system to be launched in 2008; and an agreement with Sportech/Littlewoods, of the United Kingdom, to upgrade their pari-mutuel technology and services.

Subsequent to the end of the quarter the Company announced a joint venture with Inspur to launch instant tickets in the Shandong province of China; the acquisition of Oberthur Gaming Technologies (OGT) another leading instant ticket manufacturer; a Lottery Systems contract with Golden Casket of Australia, a new 10-year agreement with Electronic Game Card, and a technology contract with Churchill Downs.

Weil concluded, "We expect to continue executing on our previously stated business goals: Continuing to grow existing lottery businesses, launching new instant ticket businesses internationally, growing Global Draw's and Games Media's installed base in the United Kingdom, expanding Global Draw's technology into new jurisdictions, and improving margins across all segments."

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	Scientific Games reports results 4 May 2007 NEW YORK – (PRESS RELEASE) -- Scientific Games Corporation (Nasdaq: SGMS) today reported first quarter 2007 revenues of $242.3 million, up 16 percent from $208.1 million in the first quarter of 2006. Net income was $24.8 million or $0.26 per diluted share, net of $7.1 million of stock compensation expense, up from net income of $22.4 million or $0.24 per diluted share in the first quarter of 2006. Non-GAAP adjusted net income before accelerated stock compensation expense (explained below) was $26.8 million or $0.28 per non-GAAP diluted share, and $29.9 million or $0.32 per non-GAAP diluted share before all stock compensation expense, compared to non-GAAP adjusted net income of $26.9 million or $0.29 per non-GAAP diluted share in the first quarter of 2006. EBITDA for the first quarter of 2007 was $75.8 million, up 31 percent from $57.8 million in the first quarter of 2006. Excluding stock compensation expense, adjusted EBITDA increased 30 percent to $82.9 million for the first quarter of 2007, compared to adjusted EBITDA of $64.0 million for the first quarter of 2006. During the first quarter of 2007 the Company recorded an accelerated stock compensation charge of $2.9 million or $0.02 per diluted share. The charge reflected a requirement to expense 100 percent of the fair market value of stock options and restricted stock units granted to certain key executives in February 2007 who are of retirement age, rather than being amortized over the five-year vesting period. Total stock compensation expense for the first quarter of 2007 was $7.1 million or $0.05 per diluted share. "Printed Products service revenue showed a continued steady growth pattern at 12 percent in the first quarter," said Lorne Weil, Chairman and CEO. "'Same store' sales growth decelerated to 8 percent in the first quarter, partly as a result of production bottlenecks. We expect this to pick up in future quarters with the launch of new licensed property games and additional production capacity coming online." Mr. Weil continued, "Italy's strong contribution was felt twofold in the first quarter, in the revenue line and from our 20 percent ownership of the Italian instant ticket joint venture which added to a record level of equity income. Our negotiations in China are progressing well as evidenced by the recent announcement of our contract in Shandong. And lastly, we expect the necessary instant ticket game approvals in Mexico sometime in the second quarter, and anticipate launching this summer." Printed Products sales revenue in the first quarter was $9.3 million, a decrease of 34 percent from $14.1 million in the first quarter of 2006. The decline is primarily due to a continuing decline in phone card prices and volumes reflecting the market driven shift to lower priced products. Printed Products sales margins went from 24 percent in the first quarter of 2006 to 18 percent in the first quarter of 2007 due to pricing pressure and decreased economies of scale. "Lottery Systems Group service revenue grew 3 percent during the first quarter," added Weil. "Excluding EssNet service revenue of approximately $3.4 million, new contract revenues and elapsed contracts, 'same store' sales decreased 1 percent. This was largely due to the absence of a $365 million Powerball jackpot that occurred in the first quarter of 2006, but was ameliorated by the growth of certain international business. We successfully launched the Mexican online lottery Multijuegos(R) with our partner Televisa with approximately 3,500 terminals in February 2007. As of this week, we currently have over 4,800 terminals installed, and expect to expand this installed base to 10,000 terminals by year end driven primarily by the addition of approximately 4,000 retailers from our largest chain-store customer." Lottery Systems sales revenue was $11.0 million, a decrease of 25 percent from $14.7 million in the first quarter of 2006. This is primarily due to the absence of an $8.2 million terminal sale in 2006, but includes a $5.2 million sale to the Ontario Lottery in 2007. Add-on sales of terminals and other equipment continued to suffer from legislative uncertainty in the German market. "Diversified Gaming Group service revenue grew 70 percent, largely due to the addition of Global Draw," noted Mr. Weil. "Excluding $19.7 million of Global Draw service revenues, our pari-mutuel related businesses showed margin improvement despite flat revenue because of cost reduction initiatives. Customers continue to migrate over to the Quantum Data Centers, a development that should continue to improve margins in this segment." Diversified Gaming Group sales revenue increased from $2.3 million in the first quarter of 2006 to $11.0 million in 2007, due to the acquisition of Games Media Limited which contributed $10.3 million of sales revenue in the quarter. First quarter business development included a significant licensing deal with Hasbro, giving us global exclusive lottery rights to 20 Hasbro brands over multiple lottery platforms. The Company was also awarded an 11 year racing contract with the Camarero Group of Puerto Rico; an extension with the Connecticut Lottery for a new lottery system to be launched in 2008; and an agreement with Sportech/Littlewoods, of the United Kingdom, to upgrade their pari-mutuel technology and services. Subsequent to the end of the quarter the Company announced a joint venture with Inspur to launch instant tickets in the Shandong province of China; the acquisition of Oberthur Gaming Technologies (OGT) another leading instant ticket manufacturer; a Lottery Systems contract with Golden Casket of Australia, a new 10-year agreement with Electronic Game Card, and a technology contract with Churchill Downs. Weil concluded, "We expect to continue executing on our previously stated business goals: Continuing to grow existing lottery businesses, launching new instant ticket businesses internationally, growing Global Draw's and Games Media's installed base in the United Kingdom, expanding Global Draw's technology into new jurisdictions, and improving margins across all segments."