Scientific Games Reports Strong Results

22 Apr 2004

NEW YORK – (PRESS RELEASE) --Scientific Games Corporation (Nasdaq: SGMS) today announced results for the first quarter ended March 31, 2004. Revenues for the first quarter of 2004 increased 51% to $185.5 million compared to $123.2 million for the first quarter of 2003. Income before the preferred stock dividend was $20.4 million, an increase of 80% over 2003 first quarter income of $11.3 million, and diluted earnings per share increased 69% to $0.22 in the first quarter of 2004 from $0.13 per diluted share in of the first quarter of 2003.

EBITDA (earnings before interest, taxes, depreciation and amortization -- see the following EBITDA reconciliation) was $53.0 million in the first quarter of 2004 versus $34.8 million for the first quarter of 2003, an increase of 52%.

Increases in revenue were primarily due to the contribution from IGT OnLine Entertainment Systems, Inc. (OES) acquired in November of 2003, the additional revenues from new lottery customers such as Tennessee and North Dakota, continued strong instant ticket sales especially in states using our Cooperative Services, and sales of lottery terminals to The Ontario Lottery Corporation. Together with the preceding factors, the increase in net income also reflects a decrease in our effective tax rate to 31.5%.

"We had a very busy and successful first quarter helping both the Tennessee Lottery and the North Dakota Lottery with their start ups," said Lorne Weil, Chairman and CEO of Scientific Games. "We got the Tennessee Lottery started three weeks early and in those three weeks it sold almost $100 million worth of instant tickets. North Dakota started its Powerball(R) online game on March 25th with about 400 retailers and achieved the highest per capita launch in Powerball history. Never before has a new lottery launched with its online game first and we did it in record time. The North Dakota Lottery is expected to add two more multi-state online games, Hot Lotto and Wild Card 2, shortly."

"During the first quarter we made important strides integrating the OES operations into ours. We have begun transitioning customers over to our centralized customer service center in Georgia, and making equipment and software upgrades, both of which should reduce costs and improve service for these lottery customers and their retailers, as well as stimulate growth in revenue. We are also establishing centralized support for customer networks, software and quality control."

Mr. Weil continued, "Once again instant ticket sales were very strong in our Cooperative Service states. Although the industry figures have not yet been published for the first quarter, we see no retreat from recent quarters' 9-10% sales growth. In a continuing effort to maximize efficiencies we have ordered a new short run press for our Alpharetta, Georgia facility that will allow us to better manage production and handle increasing commercial orders. In addition we are in the process of shifting phone card production to our facility in Chile and increasing our instant ticket capability in the UK."

Scientific Games said it has begun to introduce five new online games to customers and the reception has been very positive. Pennsylvania in particular is experiencing robust sales of its new Match 6(TM) online game.

Mr. Weil continued, "During the first quarter, we introduced our newest vending solutions, PlayCentral(TM) and ConvenienceCentral(TM), to most of our customers in the US and abroad. PlayCentral, targeted at supermarkets, and ConvenienceCentral, designed for convenience stores and other smaller retailers, allow lotteries to increase the efficiency of existing retail outlets as well as expand into new distribution points. Both should lead to notably higher ticket sales. Currently our backlog stands at 2,450 vending machines."

"The pari-mutuel and venue management business segments are just now entering their strongest seasons. During the first quarter we continued conversion to our new Linux-based Quantum(TM) system, providing unprecedented throughput, distribution and security. We signed an agreement with Youbet.com to provide pari-mutuel services including a centralized wagering network, maintenance and security services - a contract worth nearly $7 million over its five-year term and containing a three-year option to renew."

"Magna Entertainment extended its contract for our account wagering platform Trackplay(TM), used to run Magna's XpressBet(TM) Internet site. Finally we obtained new racing customers in Ghana, Kenya and Armenia for pari-mutuel services and began offering our new proprietary V 75(TM) wagers in The Netherlands."

"Our Venue Management subsidiary launched its first cable racing show in February and we will be expanding its broadcast hours and subscriber base throughout the rest of the year. For the first quarter of 2004, call volume during the hours of the show increased 70% over the prior year. Wagering through our On The Wire(R) account wagering hub was $29 million in 2003. We are also in preliminary discussions with several Native American tribes and casino ships to establish race books within their operations, similar to our enormously successful race book at the Mohegan Sun. Although we can offer no assurance that such agreements will in fact be completed, we are excited about the possibilities."

Guidance

We are maintaining our previous 2004 guidance for revenue of $690 million to $720 million, EBITDA of $195 million to $205 million and net income per diluted share of $0.76 to $0.83.

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	Scientific Games Reports Strong Results 22 Apr 2004 NEW YORK – (PRESS RELEASE) --Scientific Games Corporation (Nasdaq: SGMS) today announced results for the first quarter ended March 31, 2004. Revenues for the first quarter of 2004 increased 51% to $185.5 million compared to $123.2 million for the first quarter of 2003. Income before the preferred stock dividend was $20.4 million, an increase of 80% over 2003 first quarter income of $11.3 million, and diluted earnings per share increased 69% to $0.22 in the first quarter of 2004 from $0.13 per diluted share in of the first quarter of 2003. EBITDA (earnings before interest, taxes, depreciation and amortization -- see the following EBITDA reconciliation) was $53.0 million in the first quarter of 2004 versus $34.8 million for the first quarter of 2003, an increase of 52%. Increases in revenue were primarily due to the contribution from IGT OnLine Entertainment Systems, Inc. (OES) acquired in November of 2003, the additional revenues from new lottery customers such as Tennessee and North Dakota, continued strong instant ticket sales especially in states using our Cooperative Services, and sales of lottery terminals to The Ontario Lottery Corporation. Together with the preceding factors, the increase in net income also reflects a decrease in our effective tax rate to 31.5%. "We had a very busy and successful first quarter helping both the Tennessee Lottery and the North Dakota Lottery with their start ups," said Lorne Weil, Chairman and CEO of Scientific Games. "We got the Tennessee Lottery started three weeks early and in those three weeks it sold almost $100 million worth of instant tickets. North Dakota started its Powerball(R) online game on March 25th with about 400 retailers and achieved the highest per capita launch in Powerball history. Never before has a new lottery launched with its online game first and we did it in record time. The North Dakota Lottery is expected to add two more multi-state online games, Hot Lotto and Wild Card 2, shortly." "During the first quarter we made important strides integrating the OES operations into ours. We have begun transitioning customers over to our centralized customer service center in Georgia, and making equipment and software upgrades, both of which should reduce costs and improve service for these lottery customers and their retailers, as well as stimulate growth in revenue. We are also establishing centralized support for customer networks, software and quality control." Mr. Weil continued, "Once again instant ticket sales were very strong in our Cooperative Service states. Although the industry figures have not yet been published for the first quarter, we see no retreat from recent quarters' 9-10% sales growth. In a continuing effort to maximize efficiencies we have ordered a new short run press for our Alpharetta, Georgia facility that will allow us to better manage production and handle increasing commercial orders. In addition we are in the process of shifting phone card production to our facility in Chile and increasing our instant ticket capability in the UK." Scientific Games said it has begun to introduce five new online games to customers and the reception has been very positive. Pennsylvania in particular is experiencing robust sales of its new Match 6(TM) online game. Mr. Weil continued, "During the first quarter, we introduced our newest vending solutions, PlayCentral(TM) and ConvenienceCentral(TM), to most of our customers in the US and abroad. PlayCentral, targeted at supermarkets, and ConvenienceCentral, designed for convenience stores and other smaller retailers, allow lotteries to increase the efficiency of existing retail outlets as well as expand into new distribution points. Both should lead to notably higher ticket sales. Currently our backlog stands at 2,450 vending machines." "The pari-mutuel and venue management business segments are just now entering their strongest seasons. During the first quarter we continued conversion to our new Linux-based Quantum(TM) system, providing unprecedented throughput, distribution and security. We signed an agreement with Youbet.com to provide pari-mutuel services including a centralized wagering network, maintenance and security services - a contract worth nearly $7 million over its five-year term and containing a three-year option to renew." "Magna Entertainment extended its contract for our account wagering platform Trackplay(TM), used to run Magna's XpressBet(TM) Internet site. Finally we obtained new racing customers in Ghana, Kenya and Armenia for pari-mutuel services and began offering our new proprietary V 75(TM) wagers in The Netherlands." "Our Venue Management subsidiary launched its first cable racing show in February and we will be expanding its broadcast hours and subscriber base throughout the rest of the year. For the first quarter of 2004, call volume during the hours of the show increased 70% over the prior year. Wagering through our On The Wire(R) account wagering hub was $29 million in 2003. We are also in preliminary discussions with several Native American tribes and casino ships to establish race books within their operations, similar to our enormously successful race book at the Mohegan Sun. Although we can offer no assurance that such agreements will in fact be completed, we are excited about the possibilities." Guidance We are maintaining our previous 2004 guidance for revenue of $690 million to $720 million, EBITDA of $195 million to $205 million and net income per diluted share of $0.76 to $0.83.