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Why Scientific Games Corp's Shares Popped 13% Today

By Travis Hoium – Updated Nov 21, 2018 at 3:38PM

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Electronic games could drive Scientific Games for years to come.

What happened 

Shares of gaming industry supplier Scientific Games Corp (LNW 1.37%) jumped as much as 12.7% in trading Wednesday after announcing some new product launches. Shares held gains late in the day, trading 10.4% higher at 3:20 p.m. EST. 

So what

Scientific Games announced the launch of multiple digital games with Norsk Tipping, Norway's lottery operator. Ten online slot games and two eInstant games were added to the portfolio, with more expected over the next few months. 

Slot machines on a casino floor.

Image source: Getty Images.

New electronic table game stadium-style seats were also launched at Twin River Casino Hotel in Rhode Island, which includes $5 blackjack, roulette, and baccarat. These games are connected to live dealers in a stadium setting. 

Now what

Electronic games are the next phase of growth for gaming suppliers, so these two product launches are a big deal for the business long term. I don't think either one makes the stock a buy on their own, but they show progress in the company's product trajectory. In the coming quarters, investors will want to watch for deals like this driving both revenue growth and margin expansion. Electronic games should have higher margins, which Scientific Games could use given the net losses reported over the last few years. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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