Segment Reporting and Geographic Information

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

28. Segment Reporting and Geographic Information

Operating segments are identified as components of an enterprise for which separate and discrete financial information is available and is used by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company's chief decision-maker is the Office of the Executive Chairman.

The Company's chief decision-maker reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenue and operating profit by operating unit. This information is used for purposes of allocating resources and evaluating financial performance.

The Company operates its business along three operating segments, which are segregated based on the basis of revenue stream: Service Based Gaming, Virtual Sports (which includes Interactive) and Acquired Businesses. The Company believes this method of segment reporting reflects both the way its business segments are managed and the way the performance of each segment is evaluated.

The accounting policies of the segments are the same as those described in the "Summary of Significant Accounting Policies."

The following tables present revenue, cost of sales, excluding depreciation and amortization, selling, general and administrative expenses, depreciation and amortization, stock-based compensation expense and acquisition related transaction expenses, operating profit/(loss), total assets and total capital expenditures for the periods ended December 31, 2019, December 31, 2018 and September 30, 2018, respectively, by business segment. Certain unallocated corporate function costs have not been allocated to the Company's reportable operating segments because these costs are not allocable and to do so would not be practical. Corporate function costs consist primarily of selling, general and administrative expenses, depreciation and amortization, capital expenditures, cash, prepaid expenses and property and equipment and software development costs relating to corporate/shared functions.

As a result of improved processes that have allowed us to more accurately allocate costs between reporting segments, we have reclassified the previously reported segment allocation of selling, general and administrative expenses and stock-based compensation expense for the year ended September 30, 2018.

Segment Information

Year Ended December 31, 2019

	Server Based Gaming			Virtual Sports			Acquired Businesses			Intergroup Eliminations			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	71.0		$	37.0		$	27.6		$	(0.7	)	$	—		$	134.9
Hardware		13.5			—			5.3			(0.3	)		—			18.5
Total revenue		84.5			37.0			32.9			(1.0	)		—			153.4
Cost of sales, excluding depreciation and amortization:
Cost of service		(17.6	)		(3.2	)		(3.4	)		0.7			—			(23.5	)
Cost of hardware		(9.1	)		—			(3.8	)		0.3			—			(12.6	)
Selling, general and administrative expenses		(23.6	)		(8.7	)		(20.1	)		—			(20.2	)		(72.6	)
Stock-based compensation expense		(1.7	)		(1.4	)		—			—			(5.9	)		(9.0	)
Acquisition and integration related transaction expenses		—			—			—			—			(6.7	)		(6.7	)
Depreciation and amortization		(29.1	)		(5.5	)		(6.0	)		—			(1.4	)		(42.0	)
Segment operating income (loss)		3.4			18.2			(0.4	)		—			(34.2	)		(13.0	)
Net operating loss																$	(13.0	)
Total assets at December 31, 2019	$	80.8		$	66.8		$	156.7		$	—		$	23.1		$	327.4
Total goodwill at December 31, 2019	$	—		$	46.4		$	34.5		$	—		$	—		$	80.9
Total capital expenditures for the year ended December 31, 2019	$	12.3		$	5.9		$	4.4		$	—		$	2.6		$	25.2

Three Months Ended December 31, 2018

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	21.8		$	8.2		$	—		$	30.0
Hardware		0.7			—			—			0.7
Total revenue		22.5			8.2			—			30.7
Cost of sales, excluding depreciation and amortization:
Cost of service		(4.9	)		(1.1	)		—			(6.0	)
Cost of hardware		(0.6	)		—			—			(0.6	)
Selling, general and administrative expenses		(6.9	)		(3.2	)		(5.2	)		(15.3	)
Stock-based compensation expense		(0.1	)		(0.1	)		(1.4	)		(1.6	)
Acquisition related transaction expenses		—			—			(0.1	)		(0.1	)
Depreciation and amortization		(7.8	)		(1.4	)		(0.3	)		(9.5	)
Segment operating income (loss)		2.2			2.4			(7.0	)		(2.4	)
Net operating loss										$	(2.4	)
Total assets at December 31, 2018	$	93.0		$	68.1		$	25.6		$	186.7
Total goodwill at December 31, 2018	$	—		$	44.9		$	—		$	44.9
Total capital expenditures for the three months ended December 31, 2018	$	2.1		$	1.2		$	0.1		$	3.4

Year Ended September 30, 2018

	Server Based Gaming			Virtual Sports			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	93.1		$	37.8		$	—		$	130.9
Hardware		10.5			—			—			10.5
Total revenue		103.6			37.8			—			141.4
Cost of sales, excluding depreciation and amortization:
Cost of service		(18.0	)		(4.6	)		—			(22.6	)
Cost of hardware		(8.2	)		—			—			(8.2	)
Selling, general and administrative expenses		(32.1	)		(10.7	)		(17.3	)		(60.1	)
Stock-based compensation expense		(0.9	)		(0.8	)		(5.7	)		(7.4	)
Impairment expense		(4.7	)		(3.0	)		—			(7.7	)
Acquisition and integration related transaction expenses		—			—			(0.9	)		(0.9	)
Depreciation and amortization		(34.1	)		(6.3	)		(1.4	)		(41.8	)
Segment operating income (loss)		5.6			12.4			(25.3	)		(7.3	)
Net operating loss										$	(7.3	)
Total assets at September 30, 2018	$	103.4		$	69.5		$	35.0		$	207.9
Total goodwill at September 30, 2018	$	—		$	45.8		$	—		$	45.8
Total capital expenditures for the year ended September 30, 2018	$	35.3		$	6.8		$	0.2		$	42.3

Geographic Information

Geographic information for revenue is set forth below:

	Year Ended December 31, 2019		Three Months Ended December 31, 2018		Year Ended September 30, 2018
	(in millions)
Total revenue
UK	$	103.7	$	18.6	$	89.6
Greece		20.7		4.8		23.4
Italy		16.2		5.1		18.6
Rest of world		12.8		2.2		9.8
Total	$	153.4	$	30.7	$	141.4

Geographic information of our non-current assets excluding goodwill is set forth below:

	Year Ended December 31, 2019		Three Months Ended December 31, 2018		Year Ended September 30, 2018
	(in millions)
UK	$	116.1	$	52.8	$	60.0
Greece		26.5		32.8		36.2
Italy		2.3		3.0		3.4
Rest of world		6.3		4.1		3.9
Total	$	151.2	$	92.7	$	103.5

Software development costs are included as attributable to the market in which they are utilized.