10-Q 1 e10-q.txt SCIENTIFIC GAMES HOLDINGS CORP. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------- FORM 10-Q (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000 ------------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO -------------- -------------------------------- COMMISSION FILE NUMBER 000-22298 ----------- SCIENTIFIC GAMES HOLDINGS CORP. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 13-3615274 -------------------------------------------------------------------------------- (STATE OR OTHER JURISDICTION OF (IRS IDENTIFICATION NO.) EMPLOYER) 1500 BLUEGRASS LAKES PARKWAY, ALPHARETTA, GEORGIA 30004 -------------------------------------------------------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (770) 664-3700 ----------------------------- -------------------------------------------------------------------------------- FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT. 1 2 INDICATE BY CHECK [X] WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO [ ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: INDICATE BY CHECK [X] WHETHER THE REGISTRANT HAS FILED ALL DOCUMENTS AND REPORTS REQUIRED TO BE FILED BY SECTION 12, 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN CONFIRMED BY A COURT. YES [ ] NO [ ] APPLICABLE ONLY TO CORPORATE ISSUERS: INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE: 11,938,082 SHARES OF COMMON STOCK, $.001 PAR VALUE PER SHARE, AS OF AUGUST 10, 2000. 2 3 PART I - FINANCIAL INFORMATION

3 4 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS SCIENTIFIC GAMES HOLDINGS CORP. CONSOLIDATED CONDENSED BALANCE SHEETS (IN THOUSANDS EXCEPT SHARE DATA)

(1) Derived from audited financial statements See accompanying notes. 4 5 SCIENTIFIC GAMES HOLDINGS CORP. CONSOLIDATED CONDENSED STATEMENTS OF INCOME (IN THOUSANDS EXCEPT PER SHARE DATA) (UNAUDITED)

See accompanying notes. 5 6 SCIENTIFIC GAMES HOLDINGS CORP. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)

See accompanying notes. 6 7 SCIENTIFIC GAMES HOLDINGS CORP. NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED) Note 1. Basis of Presentation The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements and should be read in conjunction with the financial statement disclosures contained in the Company's 1999 Annual Report on Form 10-K for the year ended December 31, 1999. In the opinion of management, all adjustments considered necessary for a fair presentation (which were of a normal, recurring nature) have been included. Operating results for the three and six month periods ended June 30, 2000 are not necessarily indicative of the results that may be expected for the year ended December 31, 2000. Note 2. Inventories Inventories consist principally of instant lottery tickets, materials related to their production and certain electronic components related to Systems terminals which are valued at the lower of cost (first-in, first-out method) or market. Inventories consisted of the following at:

Note 3. Contingencies As initially reported in July 1993 and periodically reported thereafter, the Company's Scientific Games Inc. ("SGI") subsidiary owns a minority interest in Wintech de Colombia S.A. ("Wintech"), which formerly operated the Colombian national lottery under contract with Empresa Colombiana de Recursos para la Salud, S.A. ("Ecosalud"), an agency of the Colombian government. The contract projected that 7 8 Note 3. Contingencies continued certain levels of lottery ticket sales would be attained and provided a penalty against Wintech, SGI and the other shareholders of Wintech of up to $5.0 million if such performance levels of lottery ticket sales were not achieved. In addition, with respect to a further guarantee of performance under the contract with Ecosalud, SGI delivered to Ecosalud a $4.0 million bond issued by a Colombian surety, Seguros del Estado ("Seguros"). Wintech started the instant lottery in Colombia, but, due to difficulties beyond its control, including, among other factors, social and political unrest in Colombia, frequently interrupted telephone service and power outages, and competition from another lottery being operated in a province of Colombia in violation of Wintech's exclusive license from Ecosalud, the projected sales level was not met for the year ended June 1993. On July 1, 1993, Ecosalud adopted resolutions declaring, among other things, that the contract was in default and asserted various claims for compensation and penalties against Wintech, SGI and other shareholders of Wintech. As the Company has previously disclosed in its filings with the Commission, litigation is pending in Colombia concerning various claims among Ecosalud, Wintech and SGI, relating to the termination of the contracts with Ecosalud (the "Colombian Litigation"). Ecosalud's claims in the Colombian Litigation were for, among other things, realization on the full amount of the penalty, plus interest and costs of the bond. SGI has consulted with Colombian counsel and been advised that SGI has various legal defenses to Ecosalud's claims. SGI also has certain cross indemnities and undertakings from the two other privately held shareholders of Wintech for their respective shares of any liability to Ecosalud. That obligation is secured in part by a $1.5 million confirmed letter of credit in favor of SGI. The Colombian surety, which issued a $4.0 million bond to Ecosalud under the contract, paid $2.4 to Ecosalud under the bond, and made demand upon SGI for that amount under the indemnity agreement entered into by the surety and SGI. SGI declined to make or authorize any such payment and notified the surety that any payment in response to Ecosalud's demand on the bond was at the surety's risk. No assurance can be given that the other shareholders of Wintech will, or have sufficient assets to, honor their indemnity undertakings to SGI when the claims by Ecosalud against SGI and Wintech are finally resolved, in the event such claims result in any final liability. On April 2, 1998, Seguros brought suit against SGI in the United States District Court for the Northern District of Georgia, Atlanta Division, Civil Action No. 1:98-CV-968-CAM. The plaintiff sought $2.4 million for sums paid by Seguros to Ecosalud under the surety bond on November 1, 1994, plus interest at the Colombian bank rate of 8 9 Note 3. Contingencies continued interest. SGI filed a motion to dismiss based on the Colombian statute of limitations of two years and, alternatively, sought that the case be dismissed on other grounds. Seguros filed a motion for summary judgment with the Court on May 6, 1998 seeking summary judgment on its claim in the amount of $2.4 million, plus interest. On September 29, 1999, the District Court issued an order in which it denied various motions of SGI, including a motion to dismiss, and granted Seguros' motion for summary judgment. On September 29, 1999, the District Court also entered judgment for Seguros in the amount of $2.4 million or the equivalent in Colombian pesos as of the judgment date, plus pre-judgment interest at a rate of 38.76% per annum, equivalent to approximately $4.6 million. SGI has appealed the matters covered by the District Court's order and judgment. SGI has posted an appeal bond in the amount of $7 million through its existing bonding arrangements. SGI continues to believe that it has meritorious defenses, including that the amount paid by Seguros was improperly paid because of the default by Ecosalud of its obligations to SGI, which claims remain the subject of separate litigation in Colombia. In addition to vigorously prosecuting its appeal of the District Court's order and judgment, SGI continues to vigorously defend the Colombian litigation and has been advised by counsel that SGI has various defenses on the merits as well as procedural defenses to the litigation (which it has asserted). Nevertheless, it is not possible to determine the exact/ultimate outcome of the appeal of the order and judgment granted to Seguros or the outcome of any litigation in Colombia. While it is not feasible to predict or determine the final outcome of these proceedings, management, based on the knowledge of the related facts and circumstances, believes that any potential losses will not result in a materially adverse effect on the Company's financial position, results of operations, liquidity or capital resources. Note 4. Comprehensive Income Total comprehensive income was $195,000 and $5.8 million for the three-month and six-month periods ended June 30, 2000 and $5.4 million and $10.0 million for the three-month and six-month periods ended June 30, 1999, respectively. 9 10 Note 5. Credit Facilities The Company has two credit facilities, an $80 million revolving credit facility with four banks which expires November 30, 2002 and a $25 million revolving 364-day credit facility with a single bank that expires on November 29, 2000. (Refer to the Company's 10-K for the year ended December 31, 1999 for a description of the Company's credit facilities). Net borrowings under the credit facilities were $28.9 million at June 30, 2000. Note 6. Segment Information

Note 7. Plant Closure On January 28, 2000, the Company announced plans to consolidate its printing operations by expanding its Alpharetta, Georgia facility and closing its instant ticket printing operation in Gilroy, California. The severance and stay incentive plan was announced to the employees on January 27, 2000. A total of $309,000 and $2.8 million in closure costs were expensed for the quarter and six months ended June 30, 2000, respectively. The reserve in accrued liabilities was $2.4 million at June 30, 2000. These costs consisted of severance, stay incentives, lease termination and asset write-downs. There are approximately 130 employees that will be terminated including both production and support employees at the plant. The plant stopped printing operations on July 26, 2000 and will cease total operations by the end of August 2000. There were $185,000 in charges taken against the reserve during the quarter ended June 30, 2000. 10 11 SCIENTIFIC GAMES HOLDINGS CORP. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. GENERAL Our revenues are generated primarily from sales of our products and services to governmentally operated or sanctioned lotteries worldwide and, to a lesser extent, non-lottery related entities both in the United States and worldwide. We categorize our sales into two main segments: (1) Instant Ticket and Related Services and (2) Systems. In the Instant Ticket and Related Services segment, we primarily supply game design, sales and marketing support, instant ticket manufacturing and delivery, inventory management and distribution, and retailer telemarketing and field services to our customers. In addition, this segment includes promotional instant tickets and pull-tab tickets that we sell to both lottery and non-lottery customers and prepaid phone cards sold to telecommunications companies. In the Systems segment, we primarily supply transaction processing software that accommodates instant ticket accounting and validation and on-line lottery games, point-of-sale terminal hardware which connects to these systems, central site computers and communication hardware which run these systems, and ongoing support and maintenance services for these products. This segment also includes software, hardware and support for sports betting and credit card processing systems. Instant Ticket and Related Services revenues are generally based on a price per 1,000 tickets delivered or based upon a percentage of the lottery's sales to the public over a contract period. Systems revenues may be based on a fixed price for the product or service or based upon a percentage of the lottery's sales to the public over a contract period. For the period January 1, 2000 through June 30, 2000, we have: - received an extension on our current Instant Ticket and Related Services contracts with the Kentucky Lottery Corporation through September, 2002. - been awarded a new three-year contract, with an option for an additional three-year extension, to provide Instant Tickets and Related Services to the Washington State Lottery. - been awarded a new four-year contract, with an option for an additional one-year extension, to provide Instant Tickets and Related Services to the Colorado Lottery. - been awarded a new two-year secondary supply contract, with an option for three additional one-year extensions, to provide Instant Tickets and Related Services to the Minnesota Lottery. - been awarded a new three-year contract, with an option for two additional one-year extensions, to provide Instant Tickets and Related Services to the West Virginia Lottery. 11 12 - been awarded a new three-year contract, with an option for two additional one-year extensions, to provide Instant Tickets and Related Services to the South Dakota Lottery. - received one-year extensions on our Instant Ticket and Related Services contracts with the Illinois, New York and New Mexico Lotteries. RESULTS OF OPERATIONS Three-month period ended June 30, 2000 compared to three-month period ended June 30, 1999. Revenues for the three-month period ended June 30, 2000 increased $4.3 million, or 7.6%, over the revenues for the three-month period ended June 30, 1999. The increase was primarily due to increased Instant Tickets and Related Services revenues of approximately $8.4 million, which represented a 19.1% increase for the segment. This increase was mostly due to an $6.8 million increase in sales of international pre-paid telephone cards, which represented a 185% increase over the same period last year for this product. Partially offsetting the increase for the period was a $3.9 million decrease in revenues from the Systems segment due to lower sales of new systems to international customers. Instant Ticket and Related Services revenues accounted for approximately 85.3% and 77.1% of our total revenues for the three-month periods ended June 30, 2000 and 1999, respectively. On a comparative basis, gross margin decreased $3.1 million, or 14.3%, while gross margin as a percentage of revenues decreased to 30.1% from 37.7% for the three-month periods ended June 30, 2000 and 1999, respectively. The margin decrease expressed in dollars was primarily due to the decreased sales volumes in the Systems segment. The percentage margin decline was mainly attributable to lower equivalent sales prices charged on certain instant ticket lottery contracts awarded or extended and the decrease in Systems sales, offset in part by continued efficiency improvements and additional sales of pre-paid telephone cards. The lower equivalent sales prices were a result of competitive pricing pressures in the lottery industry. Selling, general and administrative (SG&A) expenses decreased $107,000, or 1.4%, for the three-month period ended June 30, 2000 from the same period of 1999. SG&A expenses decreased as a percentage of revenues to 12.2% from 13.3%. Depreciation and amortization expense increased for the three-month period ended June 30, 2000 by $34,000, or 0.7%, over the comparable period of 1999. Plant closure costs, including related severance costs, of $309,000 recorded during the current quarter are for the planned closure of our instant ticket manufacturing facility in Gilroy, California. This closure resulted from our decision to consolidate U.S. based production in our Alpharetta, Georgia facility, which is being expanded to accommodate a state-of-the-art printing press. Once the new press is operational, we 12 13 believe the facility consolidation and equipment upgrade will produce cost savings as well as increase our production capabilities. Interest income for the three-month period ended June 30, 2000 decreased $14,000, or 7.4%, compared to the three-month period ended June 30, 1999. The decrease was attributable to lower average cash and cash equivalents balances in the current period than in the same comparable period of 1999. Gain/(loss) on foreign currency for the three-month period ended June 30, 2000 resulted in a loss of $14,000 compared with a loss of $174,000 for the same period in 1999. Interest expense for the three-month period ended June 30, 2000 increased $102,000 from the three-month period ended June 30, 1999. The increase was primarily due to an increase in the average balance outstanding under one of our credit facilities compared to the prior period. The effective income tax rate for the three-month ended June 30, 2000 was 37.0% as compared to 37.1% for the three-month period ended June 30, 1999. As a result of the foregoing, net income for the three-month period ended June 30, 2000 was $3.5 million compared to $5.4 million for the three-month period ended June 30, 1999. The decrease in net income of $1.9 million was primarily due to the Gilroy closing costs, the decrease in Systems sales and competitive pricing pressures discussed above. Net income without the one-time plant closing costs and associated severance costs would have been $3.7 million. Earnings per common share (diluted) for the three-month period ended June 30, 2000 were $0.30 compared to $0.45 for the comparable period in 1999. The decrease in earnings per common share was primarily due to the Gilroy closing costs, the decrease in Systems sales and competitive pricing pressures. Partially offsetting the decrease was a reduction in the weighted average number of common equivalent shares outstanding, resulting from our repurchase of shares of our common stock during 1999. Earnings per common share without the Gilroy closing costs would have been $.32. Six-month period ended June 30, 2000 compared to Six-month period ended June 30, 1999. Revenues for the six-month period ended June 30, 2000 increased $10.7 million, or 9.8%, over the revenues for the six-month period ended June 30, 1999. The increase was primarily due to increased Instant Tickets and Related Services revenues of approximately $20.0 million, which represented a 24.0% increase for the segment. This increase was mostly due to a $15.1 million increase in sales of international pre-paid telephone cards, which represented a 228% increase over the same period last year for this product. Partially offsetting the increase for the period was a $9.2 13 14 million decrease in revenues from the Systems segment due to lower sales of new systems to international customers. Instant Ticket and Related Services revenues accounted for approximately 85.5% and 75.7% of our total revenues for the three-month periods ended June 30, 2000 and 1999, respectively. On a comparative basis, gross margin decreased $2.6 million, or 6.4%, while gross margin as a percentage of revenues decreased to 31.4% from 36.9% for the six-month periods ended June 30, 2000 and 1999, respectively. The margin decrease expressed in dollars was primarily due to the decreased sales volumes in the Systems segment. The percentage margin decline was mainly attributable to lower equivalent sales prices charged on certain instant ticket lottery contracts awarded or extended and the decrease in Systems sales, offset in part by continued efficiency improvements and additional sales of pre-paid telephone cards. The lower equivalent sales prices were a result of competitive pricing pressures in the lottery industry. Selling, general and administrative (SG&A) expenses increased $1.7 million, or 11.8%, for the six-month period ended June 30, 2000 over the same period of 1999. SG&A expenses increased as a percentage of revenues to 13.3% from 13.1%. The increase was due primarily to severance costs related to a management re-organization and higher selling, general and administrative expenses required to support increased sales activity in new and existing markets, including pre-paid telephone cards. Depreciation and amortization expense increased for the six-month period ended June 30, 2000 by $530,000, or 6.0%, over the comparable period of 1999 due primarily to additional depreciation expenses from capital expenditures to support the growth in pre-paid telephone demand and for new Instant Ticket and Related Services operations. The Gilroy closure costs of $2.8 million recorded during the year are for the planned closure of our instant ticket manufacturing facility in Gilroy, California. This closure resulted from our decision to consolidate U.S. based production in our Alpharetta, Georgia facility, which is being expanded to accommodate a state-of-the-art printing press. Once the new press is operational, we believe the facility consolidation and equipment upgrade will produce cost savings as well as increase our production capabilities. Interest income for the six-month period ended June 30, 2000 increased $89,000, or 31.9%, compared to the six-month period ended June 30, 1999. The increase was attributable to higher average cash and cash equivalents balances in the current period than in the same comparable period of 1999. Gain/(loss) on foreign currency for the six-month period ended June 30, 2000 resulted in a loss of $308,000 compared with a gain of $273,000 for the same period in 1999. The loss primarily resulted from the negative exchange rate effect of the strengthening U.S. dollar on certain assets denominated in foreign currency. Interest expense for the six-month period ended June 30, 2000 increased $220,000 from the six-month period ended June 30, 1999. The increase was primarily due to an increase in the average balance 14 15 outstanding under one of our credit facilities compared to the prior period. The effective income tax rate for the six-month ended June 30, 2000 was 36.7% as compared to 37.5% for the six-month period ended June 30, 1999. The lower effective tax rate was primarily the result of adjustments to tax liabilities, due to the favorable resolution of certain contingencies. As a result of the foregoing, net income for the six-month period ended June 30, 2000 was $5.6 million compared to $10.4 million for the period ended June 30, 1999. The decrease in net income of $4.8 million was primarily due to the one-time plant closing costs, the severance costs, the decrease in Systems sales and competitive pricing pressures discussed above. Net income without the one-time plant closing and severance costs would have been $7.8 million. Earnings per common share (diluted) for the six-month period ended June 30, 2000 were $0.49 compared to $0.87 for the comparable period in 1999. The decrease in earnings per common share was primarily due to the one-time plant closing costs, the severance costs, the decrease in Systems sales and competitive pricing pressures. Partially offsetting the decrease was a reduction in the weighted average number of common equivalent shares outstanding, resulting from our repurchase of shares of our common stock during 1999. Earnings per common share without the one-time plant closing and severance costs would have been $.68. LIQUIDITY AND CAPITAL RESOURCES The Company's cash and cash equivalents balance decreased by approximately $3.5 million during the six-month period ended June 30, 2000. For the six-month period ended June 30, 2000, net cash provided by operating activities increased by $2.6 million to $13.2 million from $10.6 million for the comparable period in 1999. The primary contributions to cash from operating activities during the period were net income and depreciation and amortization. Net cash used in investing activities for the six-month period ended June 30, 2000 increased to $21.8 million from $5.8 million for the same period in the prior year. These investments were mostly in property and equipment for our Alpharetta, Georgia and Leeds, England operations and primarily related to consolidation and expansion projects that were begun in 1999 and which will continue through the fourth quarter of 2000. The Company's financing activities generated cash of $5.9 million for the six-month period ended June 30, 2000 compared to $1.5 million in the six-month period ended June 30, 1999. As a result of a net increase in borrowings for anticipated future capital expenditure requirements during the current quarter, the balance outstanding under one of our credit facilities at June 30, 2000 was $28.9 million. 15 16 While we estimate we will spend over $45 million in capital expenditures in the current year, we believe that the availability of funds under our credit facilities, cash flows from operations and our ability to obtain alternative sources of financing will permit us to fund our operations and working capital requirements, as well as other potential investments and business opportunities. In the event we have additional capital requirements for new business opportunities, we believe we have the ability to obtain the required capital from the capital markets. FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains certain statements and projections (including statements concerning plans and objectives of management for future operations and services and statements concerning revenue expectations), other than those covering historical information, that should be considered forward-looking and subject to certain risks and uncertainties. Such forward-looking statements are based on management's belief as well as assumptions made by, and information currently available to, management pursuant to "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The Company's actual results may differ materially from the plans envisioned in, or results projected by, those statements if the Company's assumptions prove to be incorrect or for a variety of other reasons, including those relating to factors identified in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 as part of a Cautionary Statement for purposes of such safe harbor. The Company cautions that such factors are not exclusive. The Company does not undertake to update any forward-looking statement that may be made from time to time by, or on behalf of, the Company. 16 17 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Refer to the Company's Form 10-K for the year-ended December 31, 1999 for a description of pending legal proceedings, with respect to which there have been no further developments. ITEMS 2,3 AND 4 ARE NOT APPLICABLE AND HAVE BEEN OMITTED. ITEM 5. OTHER EVENTS On August 8, 2000, the Company's stockholders approved the Merger Agreement with Autotote Corporation (see Item 6(b)), whereby at the effective time of the Merger, each share of common stock of the Company outstanding immediately prior to the effective time of the Merger will be converted into the right to receive $26 in cash. Consummation of the Merger is still subject to the receipt of certain customer consents and lottery related regulatory approvals. Also, the Company understands that Autotote has not yet completed its financing arrangements. Closing of the transaction currently is anticipated to occur before the end of August 2000. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits #27 Financial Data Schedule (for SEC use only) (b) Reports on Form 8-K On May 26, 2000 the Company filed a current report on Form 8-K to report that on May 18, 2000, the Company, Autotote Corporation, a company organized under the laws of the State of Delaware ("Autotote") and ATX Enterprises, Inc., a corporation organized under the laws of the State of Delaware and wholly owned subsidiary of Autotote ("Merger Sub"), entered into an agreement and plan of merger whereby the Company will merge (the "Merger") with and into Merger Sub, with the Company as the surviving corporation in the Merger (the "Merger Agreement"). On June 1, 2000, the Company filed an amendment to the Form 8-K previously filed on May 26, 2000 in order to file a copy of the Merger Agreement as an exhibit to such amended filing. 17 18 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SCIENTIFIC GAMES HOLDINGS CORP. Date: August 14, 2000 By: /s/WILLIAM G. MALLOY -------------------------------- William G. Malloy President and Chief Executive Officer Date: August 14, 2000 By: /s/CLIFF O. BICKELL -------------------------------- Cliff O. Bickell Vice President, Treasurer, And Chief Financial Officer 18

SCIENTIFIC GAMES HOLDINGS CORP 10-Q