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Why Scientific Games Shares Popped 11.5% Wednesday

By Travis Hoium – Updated Nov 28, 2018 at 5:08PM

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Mobile and sports betting could be a big growth market for the casino supplier the next few years.

What happened 

Shares of casino supplier Scientific Games (LNW 1.87%) jumped as much as 14.9% in trading Wednesday after the company announced a key new partner. Shares closed slightly off their peak but still gained 11.5% on the day. 

So what

Subsidiary SG Digital announced that it has rolled out a new managed trading service with Caesars Entertainment (CZR) in New Jersey and Mississippi. The service offers new betting and pricing services to Caesars' casinos and online services. 

Man sports betting on a mobile device.

Image source: Getty Images.

This is part of a broader goal for Scientific Games of getting into sports betting and online betting, which are both included in this deal. Given Caesars' nationwide reach, if the program goes to more markets, it could be a big win for Scientific Games. 

Now what

It's not clear what the financial impact of the managed trading service business will be, but it's a positive to see Scientific Games signing deals with big casino companies. What investors should watch for in the next few quarters is even a small impact on financials as sports betting is rolled out to more casinos and online platforms. If it is, this is a wave of growth the company could ride for 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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Stocks Mentioned

Light & Wonder, Inc. Stock Quote
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