Texas Lottery Extends Scientific Games Contract Another Decade

Posted on: September 13, 2022, 12:45h. 

Last updated on: September 13, 2022, 06:04h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

The Texas Lottery is living by the motto, “If it’s not broke, don’t fix it.” As such, the lottery recently extended its existing partnership with Scientific Games by another decade.

Texas Lottery scratch-off Scientific Games
A Texas Lottery retailer in Groves, Tx. Through at least 2034, the Texas Lottery’s scratch-off games will continue to be manufactured by Scientific Games. (Image: KBMT)

The Texas Lottery is one of the richest state-run lotteries in the entire country. The lottery sold north of $8 billion worth of tickets last year, which trailed only Florida, New York, and California.

The lottery is one of the only forms of permitted gambling in the Lone Star State, as Texas doesn’t allow commercial casinos, sports betting, racinos, or pari-mutuel wagering. The state is home to tribal casinos, but those properties can only offer bingo-based gaming, not slot machines or table games.

The new Scientific Games, which resulted after its predecessor sold off its lottery business last year to private equity firm Brookfield Business Partners for $6.1 billion, says it’s reached a deal with the Texas Lottery to continue managing its scratch-off games.

Of the lottery’s more than $8 billion in revenue generated in 2021, the Texas Lottery says approximately $6.72 billion came via scratch-offs. Under the updated deal, Scientific Games will continue providing the Texas Lottery with scratch-offs through 2034.

Retailer Improvements

Scientific Games says part of its contract extension with the Texas Lottery includes deploying the company’s SCiQ units to leading retailers across the state. The company says the cabinets improve in-store displays of the scratch-off games, better secure the games, and enhance inventory maintenance, marketing, accounting, and operational efficiencies.

The SCiQ units are scheduled to roll out across Texas beginning in early 2023.

Texas extending its arrangement with Scientific Games comes as little surprise. The lottery firm has been running the Texas Lottery’s scratch-off operations since the lottery began in 1992.

Since then, the Texas Lottery has benefited public education and veterans’ services with more than $35 billion in assistance.

The bulk of the money — almost $30 billion — has gone toward the state’s Foundation School Fund. The fund is the primary source of state funding for Texas public school districts. The fund received nearly $2 billion in lottery proceeds during the 2021 fiscal year.

The Texas Lottery operates six draw games with its scratch-off games: Lotto Texas, Texas Two Step, All or Nothing, Pick 3, Daily 4, and Cash Five.

New Company, Same Name

Scientific Games today is a much different Scientific Games than it was at this time a year ago. The former company rebranded as Light & Wonder after divesting its lottery division to Brookfield. It also sold its sports betting unit to Endeavor Group Holdings for $1.2 billion.

Scientific Games says it’s now “100% lottery-focused” and has the self-claimed motto of being “The World’s Most Trusted Lottery Company.” Though the organization recently underwent a major overhaul, Patrick McHugh remains a familiar face at the top.

McHugh joined the company in 2004 and served as chief executive of Scientific Games’ lottery divisions since 2013. He helped spearhead this year’s sale of the company’s lottery unit to Brookfield.

Brookfield subsequently promoted him to CEO after acquiring the Scientific Games name and its lottery products.