We are a global business-to-business gaming technology company, supplying Virtual
Sports and Server Based Gaming (“SBG”) products to regulated lottery,
betting and gaming operators worldwide through an “omni-channel”
distribution strategy. We provide end-to-end digital gaming solutions on our
proprietary and secure network, which accommodates a wide range of devices,
including land-based gaming machine terminals, mobile devices such as smartphones
and tablets and online computer and social applications.
We operate our business in two business segments – Virtual Sports and
Server Based Gaming – representing our different products and services.
We evaluate our business performance, resource allocation and capital spending
on an operating segment level, where possible. We use the operating results
and identified assets of each operating segment to make prospective operating
decisions. Although our revenues and cost of sales (excluding depreciation and
amortization) are reported exclusively by segment, we include an unallocated
column in our financial statements for certain expenses, including depreciation
and amortization as well as selling, general and administrative expenses. Unallocated
balance sheet line items include items that are a shared resource and therefore
not allocated between operating segments. For information about our revenues,
operating results, assets, liabilities and cash flows, see our consolidated
financial statements and the section entitled “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” included
elsewhere in this report.
Our products in the Virtual Sports and Server Based Gaming categories both
offer innovative games, available through a variety of distribution channels,
including digital SBG terminals, mobile gaming products, computer and online
gaming products and services and electronic table games (“ETG”).
We believe our omni-channel distribution is an important differentiator of our
products in the market, allowing us to update our game and operating software
remotely and keep pace with fast-evolving requirements in game play, security,
technology and regulations.
Virtual Sports offers ultra-high-definition games that create an always-on
sports wagering experience, while SBG offers more traditional casino games such
as slots, roulette and other table games. Our Virtual Sports game portfolio
includes branded titles such as Rush Football 2®, Rush Boxing® featuring
Mike Tyson, as well as horse racing, tennis, motor racing, cricket and other
sports titles. We offer a comprehensive array of sports titles in Virtual Sports.
Our SBG game portfolio includes a broad selection of leading omni-channel slots
titles including CenturionTM, Super Hot FruitsTM, and 2 Fat CatsTM. These games
offer customers a wide range of volatilities, return-to-player and other special
features. We also offer a range of more traditional casino games through its
SBG network, such as roulette, blackjack and keno.
We generate revenues in two principal ways: on a participation basis and through
product sales and software license fees. Participation revenues include a right
to receive a share of revenue generated from (i) our Virtual Sports products
placed with operators; (ii) our SBG terminals placed in gaming and lottery venues;
(iii) licensing our game content and intellectual property to third parties;
and (iv) our games on third-party online gaming platforms that are interoperable
with our game servers. Under our participation agreements, payments made to
us are calculated based upon a percentage of the net win, which is the amount
of earnings generated from end-users playing the gaming machines, after adjusting
for player winnings and relevant gaming taxes. Product sales include the sale
of new SBG terminals and associated parts to gaming and betting operators. Software
license revenues are principally related to our Virtual Sports product and to
license sales of our SBG platform.
We are focused on executing on key strategies to achieve long-term growth in
revenues, profit and cash flow. Our strategic priorities are based on our experience
in serving customers in multiple jurisdictions throughout the world, as well
as on our expectations for the evolution of the gaming market. We believe the
gaming industry will continue to migrate towards networked, distributed, omni-channel
gaming. As a result, we have concentrated on developing products that could
be distributed via our omni-channel strategy, using a common technology platform.
This strategy allows us to update our games and operating software remotely,
keeping pace with evolving requirements in game play, security, technology and
regulations.
We continually invest in new product development in each of our Virtual Sports
and Server Based Gaming business segments. We believe these investments benefit
our existing and new customers by making new products available to them and
bringing exciting entertainment experiences to their players. Our digital approach,
which connects our content to a wide range of devices and is compatible with
a wide range of protocols and regulatory standards, is a differentiator in our
industry and creates a significant competitive advantage for us. We have continued
to focus on channels where we believe there is considerable growth available
– especially mobile, where we can deploy our RGS products. We believe
our technological approach allows us to quickly adapt to changes in player preferences.