Scientific Games Results Up

2 November 2004

NEW YORK – (PRESS RELEASE) -- Scientific Games Corporation (Nasdaq: SGMS) today reported third quarter 2004 revenues increased 36 percent to $179.3 million from the $132.1 million reported in the third quarter of 2003. Net income before preferred stock dividend rose 62 percent to $21.5 million or $0.24 per diluted share in the third quarter of 2004 compared to $13.2 million or $0.15 per diluted share in the third quarter of 2003. EBITDA (earnings before interest, taxes, depreciation and amortization -- see the following EBITDA reconciliation) increased 41 percent to $53.5 million in the third quarter of 2004 from $37.9 million in the third quarter of 2003.

For the first nine months of 2004, revenues were $542.9 million compared to $384.1 million for the first nine months of 2003, an increase of 41%. Net income before preferred stock dividend was $61.4 million or $0.68 per diluted share for the first nine months of 2004 compared to net income before preferred stock dividend of $37.1 million or $0.43 per diluted share in the first nine months of 2003. EBITDA increased 44 percent to $157.8 million in the first nine months of 2004 from $109.8 million in the first nine months of 2003.

Scientific Games said that the acquisition of IGT OnLine Entertainment Systems was a significant contributor to the gains in 2004, along with continued strong sales of instant lottery tickets, licensed game properties and lottery systems throughout the world. For the fiscal year ended June 30, 2004, U.S. lotteries reported overall sales growth of 8.8% to more than $45 billion; instant tickets, which now account for more than half the total market, were the fastest growing segment, increasing by more than 12% from the prior year. (LaFleur's Magazine).

During the quarter, Scientific Games was awarded instant lottery contracts in Massachusetts, Iowa and Texas, won renewal as secondary instant supplier in New York, and received extensions of existing online contracts from Indiana, South Dakota, Vermont and West Virginia. After the close of the quarter, the company was awarded the instant lottery contract in Louisiana. In addition, Scientific Games won the online system contract for the lottery in Puerto Rico. As previously announced, the aggregate revenues of these contracts exceeds $150 million over their initial terms.

Lorne Weil, Chairman and CEO, commented on several important developments.

"The early results of the Iowa test market for our electronic game cards have exceeded expectations and we are accelerating plans for a broader rollout. Our new patent pending online lotto game, Match 6, passed the $100 million sales mark in Pennsylvania in less than nine months, stimulating interest in several additional states. Twenty-five lotteries have now agreed to sub-license Scientific Games' multiplier patent from our licensee, the Multi-State Lottery Association," Mr. Weil continued.

Scientific Games noted that its instant lottery network in Italy had grown to about 20,000 retailers by mid-October, significantly greater than a quarter earlier though still below the longer range target.

Mr. Weil said, "We are very pleased with the recent progress in Italy. In the last three months sales have nearly doubled, reaching approximately 15 million euros per week. Together with the just-announced acquisition of Printpool Honsel, a supplier of instant tickets to 16 lotteries in Germany, and upcoming major capital investments in our UK facility, we are gathering the critical mass necessary to realize both significant sales growth and operating synergies in Europe."

Scientific Games Racing, had an unusually active quarter in terms of contract signings. It extended contracts with 12 casinos in Atlantic City, and added new pari-mutuel customers representing $6.2 million of annual revenue.

Guidance

Scientific Games is revising its guidance for 2004 as follows: revenues of $715 to $725 million, EBITDA of $205 to $210 million with earnings per diluted share of $0.84 to $0.88.

Previously Scientific Games said it expected revenues between $690 and $720 million, EBITDA of $195 to $205 million and earnings per diluted share of $0.78 to $0.83.

As a reminder, Scientific Games previously announced its intention to discontinue guidance beginning in 2005.