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TABLE OF CONTENTS
INDEX TO FINANCIAL INFORMATION

As filed with the Securities and Exchange Commission on April 22, 2019

Registration No. 333-230727


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 2
to
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



SciPlay Corporation
(Exact name of Registrant as specified in its charter)

Nevada
(State or other jurisdiction of
incorporation or organization)
  7374
(Primary Standard Industrial
Classification Code Number)
  83-2692460
(I.R.S. Employer
Identification Number)

6601 Bermuda Road
Las Vegas, Nevada 89119
(702) 897-7150
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)



CSC Services of Nevada, Inc.
2215-B Renaissance Drive
Las Vegas, Nevada 89119
(702) 740-4244
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Marc D. Jaffe
Senet S. Bischoff
Latham & Watkins LLP
885 Third Avenue
New York, New York 10022
(212) 906-1200

 

Adam Fleisher
Cleary Gottlieb Steen & Hamilton LLP
One Liberty Plaza
New York, New York 10006
(212) 225-2000

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.

                  If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

                  If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

                  If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

                  If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

                  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý   Smaller reporting company o

Emerging growth company ý

                  If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ý



CALCULATION OF REGISTRATION FEE

               
 
Title of Each Class of Securities
to be Registered

  Amount to be
Registered(1)

  Proposed Maximum
Offering Price
per Share(2)

  Proposed Maximum
Aggregate
Offering Price(2)

  Amount of
Registration Fee(3)

 

Class A common stock, par value $.001 per share

  25,300,000   $16.00   $404,800,000   $49,062

 

(1)
Includes 3,300,000 shares of Class A common stock that may be sold if the underwriters' option to purchase additional shares granted by the Registrant is exercised. See "Underwriting (Conflicts of Interest)."

(2)
Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended.

(3)
The Registrant previously paid $12,120 in connection with a prior filing of the Registration Statement, and the additional amount of $36,942 is being paid herewith.

                  The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion
Preliminary Prospectus dated April 22, 2019

PROSPECTUS

22,000,000 Shares

GRAPHIC

Class A Common Stock



                  This is SciPlay Corporation's initial public offering. We are selling 22,000,000 shares of our Class A common stock.

                  We expect the public offering price to be between $14.00 and $16.00 per share. Currently, no public market exists for the shares. After pricing of the offering, we expect that the shares will trade on The NASDAQ Global Select Market under the symbol "SCPL."

                  We will use the net proceeds that we receive from this offering to purchase from SciPlay Parent Company, LLC, which we refer to as SciPlay Parent LLC, newly issued common member's interests of SciPlay Parent LLC, and from SG Social Holding Company I, LLC, a wholly owned subsidiary of Scientific Games Corporation, which we refer to as SG Holding I, existing common member's interests of SciPlay Parent LLC that are owned by SG Holding I, which we refer to collectively as the LLC Interests. There is no public market for the LLC Interests. The purchase price for the LLC Interests will be equal to the initial public offering price of our Class A common stock less the underwriting discount. The net proceeds received by SG Holding I and SciPlay Parent LLC in connection with this offering will be used as described in "Use of Proceeds."

                  We will have two classes of common stock outstanding after this offering: Class A common stock and Class B common stock. Each share of Class A common stock entitles its holder to one vote on all matters presented to our stockholders generally, and each share of Class B common stock entitles its holder to ten votes on all matters presented to our stockholders generally, for so long as the number of shares of our common stock beneficially owned by SG Holding I and SG Social Holding Company, LLC, each a wholly owned subsidiary of Scientific Games Corporation, which we refer to collectively as the SG Members, and their affiliates, represents at least 10% of our outstanding shares of common stock and, thereafter, one vote per share. Immediately following this offering, all of our outstanding shares of Class B common stock will be held by the SG Members on a one-to-one basis with the number of LLC Interests each SG Member owns. Immediately following this offering and based on the assumed offering and sale of 22,000,000 shares of our Class A common stock at an assumed initial public offering price of $15.00 per share, the holders of our Class A common stock issued in this offering will collectively hold 100% of the economic interests in us and 2.1% of the voting power in us, and Scientific Games Corporation, through its indirect ownership of all of the outstanding Class B common stock, will hold no economic interest in us and the remaining 97.9% of the voting power in us. We will be a holding company, and upon consummation of this offering and the application of proceeds therefrom, our sole material asset will be the LLC Interests we purchase from SciPlay Parent LLC and SG Holding I, representing an aggregate 17.4% economic interest in SciPlay Parent LLC. The remaining 82.6% economic interest in SciPlay Parent LLC will be owned indirectly by Scientific Games Corporation, through the ownership of LLC Interests by the SG Members.

                  Although we will have a minority economic interest in SciPlay Parent LLC, because we will be the sole manager of SciPlay Parent LLC, we will control all of the business and affairs of SciPlay Parent LLC and, through SciPlay Parent LLC and its subsidiaries, conduct our business, which before this offering was the social gaming business of Scientific Games Corporation.

                  Following this offering, we will be a "controlled company" within the meaning of the corporate governance rules of The NASDAQ Global Select Market, or the NASDAQ rules. See "The Transactions" and "Management—Corporate Governance."

                  We are an "emerging growth company" as that term is defined in the Jumpstart Our Business Startups Act of 2012 and, as such, will be subject to certain reduced public company reporting requirements. See "Prospectus Summary—Implications of Being an Emerging Growth Company."

                  Investing in the Class A common stock involves risks that are described in the "Risk Factors" section beginning on page 25 of this prospectus.



 
  Per Share   Total  

Public offering price

  $                $               

Underwriting discount

  $                $               

Proceeds, before expenses, to us

  $                $               



                  The underwriters may also exercise their option to purchase up to an additional 3,300,000 shares of Class A common stock from us at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus.

                  Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

                  The shares will be ready for delivery on or about                        , 2019.



BofA Merrill Lynch   J.P. Morgan   Deutsche Bank Securities

 

Goldman Sachs & Co. LLC   Morgan Stanley   Macquarie Capital   RBC Capital Markets

 

Stifel   Wedbush Securities



   

The date of this prospectus is                        , 2019


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TABLE OF CONTENTS

 
  Page  

PROSPECTUS SUMMARY

    1  

RISK FACTORS

    25  

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

    59  

THE TRANSACTIONS

    60  

USE OF PROCEEDS

    64  

DIVIDEND POLICY

    66  

CAPITALIZATION

    67  

DILUTION

    69  

SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

    71  

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

    73  

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    82  

BUSINESS

    99  

MANAGEMENT

    117  

EXECUTIVE COMPENSATION

    124  

PRINCIPAL STOCKHOLDERS

    135  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

    138  

DESCRIPTION OF CAPITAL STOCK

    151  

SHARES ELIGIBLE FOR FUTURE SALE

    158  

MATERIAL U.S. FEDERAL TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

    160  

UNDERWRITING (CONFLICTS OF INTEREST)

    164  

LEGAL MATTERS

    173  

EXPERTS

    173  

WHERE YOU CAN FIND MORE INFORMATION

    173  

INDEX TO FINANCIAL INFORMATION

    F-1  

              We, Scientific Games Corporation and the underwriters have not authorized anyone to provide any information or to make any representations other than that contained in this prospectus or in any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We, Scientific Games Corporation and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may provide you. We are offering to sell, and seeking offers to buy, shares of Class A common stock only under circumstances and in jurisdictions where offers and sales are permitted. The information contained in this prospectus or in any applicable free writing prospectus is accurate only as of its date, regardless of its time of delivery or of any sale of the shares of Class A common stock. Our results of operations, cash flows and financial condition may have changed since that date.

              For investors outside the U.S.: Neither we, Scientific Games Corporation nor any of the underwriters have taken any action that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the U.S. You are required to inform yourselves about, and to observe any restrictions relating to, this offering and the distribution of this prospectus.

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ABOUT THIS PROSPECTUS

              As used in this prospectus, unless the context otherwise requires or otherwise states, (a) references to "we," "us," "our," the "Company," "our company" and similar references refer: (i) on or prior to the consummation of the Transactions, to SciPlay Parent Company, LLC, which is sometimes referred to in this prospectus as "SciPlay Parent LLC," and all of its subsidiaries, and (ii) following the consummation of the Transactions, to SciPlay Corporation, which is sometimes referred to in this prospectus as "SciPlay," and all of its subsidiaries, including SciPlay Parent LLC and all of its subsidiaries, (b) references to the "SG Members" refer to SG Social Holding Company I, LLC, or SG Holding I, and SG Social Holding Company, LLC, or SG Holding, which prior to the consummation of the Transactions were the only members of SciPlay Parent LLC, and (c) references to "Scientific Games" or "Parent" refer to Scientific Games Corporation and its subsidiaries other than SG Social Holding Company II, LLC and its subsidiaries, the SG Members, SciPlay, SciPlay Parent LLC and their subsidiaries. Prior to the completion of the Transactions, SciPlay Parent LLC was an indirect wholly owned subsidiary of Scientific Games, through which Scientific Games operated its social gaming business. Accordingly, unless the context requires otherwise, statements relating to our history in this prospectus describe the history of Scientific Games' social gaming business. See "The Transactions."

              We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that precede them. The terms "dollar," "USD," "US$" or "$" refer to the legal currency of the U.S. Currency amounts in this prospectus are stated in dollars, unless otherwise indicated.


BASIS OF PRESENTATION

              This prospectus contains information about SciPlay and SciPlay Parent LLC. Upon the completion of the Transactions, SciPlay's sole material asset will be its common member's interests in SciPlay Parent LLC, and it will control all of the business and affairs and consolidate the financial results of SciPlay Parent LLC. Following completion of this offering, the reporting entity for purposes of periodic reporting will be SciPlay. Prior to this transaction, SciPlay has not engaged in any business or other activities other than in connection with its formation and this offering. As a result, we believe the financial statements of SG Social Holding Company II, LLC, which was previously named SG Nevada Holding Company II, LLC until November 30, 2018, a holding company whose sole material asset prior to the Transactions was its common member's interest in SciPlay Parent LLC, will be more relevant to the investor than the financial statements of SciPlay because SG Social Holding Company II, LLC's financial statements present the financial position and results of our underlying operations in greater detail.

              The summary unaudited pro forma condensed consolidated financial data of SciPlay presented in this prospectus have been derived from our unaudited pro forma condensed consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma condensed consolidated balance sheet reflects the Transactions, including the consummation of this offering as described in this prospectus, as if they occurred on December 31, 2018, while the unaudited pro forma condensed consolidated statement of income gives effect to the Transactions, including the consummation of this offering as described in this prospectus, as if they occurred on January 1, 2018. The unaudited pro forma financial information includes various estimates that are subject to material change and may not be indicative of what our operations or financial position would have been had the Transactions, including the consummation of this offering as described in this prospectus, taken place on the dates indicated, or of the results that may be expected to occur in any future period. See "Unaudited Pro Forma Condensed Consolidated Financial Information" for a complete description of the adjustments and assumptions underlying the summary unaudited pro forma consolidated financial data.

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              We report under accounting principles generally accepted in the United States, or GAAP. Our fiscal year ends on December 31 of each year as does our reporting year. Therefore, any references to 2018 and 2017 are references to the fiscal and reporting years ended December 31, 2018 and December 31, 2017, respectively. Our most recent fiscal year ended on December 31, 2018.


NON-GAAP MEASURES AND OTHER DATA

              In addition to GAAP measures, we also use Adjusted EBITDA, or AEBITDA, as described in footnote three to "Prospectus Summary—Summary Actual and Pro Forma Consolidated Financial and Other Data," and AEBITDA margin in various places in this prospectus. These non-GAAP financial measures are presented as supplemental disclosure and should not be considered in isolation of, as a substitute for, or superior to, the financial information prepared in accordance with GAAP, and should be read in conjunction with the financial statements included elsewhere in this prospectus. AEBITDA and AEBITDA margin may differ from similarly titled measures presented by other companies.

              Please see "Prospectus Summary—Summary Actual and Pro Forma Consolidated Financial and Other Data" for a reconciliation of non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP, and a discussion of our management's use of AEBITDA and AEBITDA margin.

              Throughout this prospectus, we also provide a number of key performance indicators used by management and typically used by our competitors in our industry. These and other key performance indicators are discussed in more detail in the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations—Key Performance Indicators and Non-GAAP Measures." Unless the context provides otherwise, the following are certain terms used throughout this prospectus:

    "ARPDAU"—means average revenue per daily active user, and is calculated by dividing revenue for the period by the average DAU for the period and then dividing by the number of days in the period;

    "Average DAU" or "DAU"—means daily active users, and is the number of individual users who played a game on a particular day, which we often present on average;

    "Average MAU" or "MAU"—means monthly active users, which is the number of individual users who played a game during a particular month, which we often present on average;

    "D&A"—means depreciation and amortization expense;

    "IRS"—means the Internal Revenue Service;

    "Mobile penetration"—means the percentage of total revenue derived from mobile platforms; and

    "R&D"—means research and development.


MARKET AND INDUSTRY DATA

              This prospectus contains references to industry market data and certain industry forecasts. Industry market data and industry forecasts are obtained from publicly available information and industry publications. Industry publications generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of that information is not guaranteed. Although we believe industry information to be accurate, it is not independently verified by us. In general, we believe there is less publicly available information concerning international social gaming industries than the same industries in the U.S. Some data is also based on our good faith estimates, which are derived from our review of internal surveys or data, as

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well as the independent sources referenced above. Assumptions and estimates of our and our industry's future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those described in "Risk Factors." These and other factors could cause future performance to differ materially from our assumptions and estimates. See "Special Note Regarding Forward-Looking Statements."


TRADEMARKS

              The name and mark, Scientific Games Corporation, and other trademarks, trade names and service marks of Scientific Games appearing in this prospectus are the property of Scientific Games, but are used under license by SciPlay Parent LLC or its subsidiaries. After the completion of this offering, the name and mark SciPlay Corporation will be the property of SciPlay. This prospectus also contains additional trademarks, trade names and service marks belonging to other companies. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus may appear without the ®, ™ or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties' trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties.

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PROSPECTUS SUMMARY

              This summary highlights information included elsewhere in this prospectus and does not contain all of the information you should consider in making an investment decision. You should read this entire prospectus carefully, including the sections entitled "Risk Factors," "Business," "Special Note Regarding Forward-Looking Statements," "Selected Consolidated Financial and Other Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the notes thereto before making an investment decision regarding our Class A common stock.


SciPlay Corporation

              Our mission is to become the #1 casual mobile gaming company in the world.


Overview

              We are a leading developer and publisher of digital games on mobile and web platforms. Our total revenue has grown from $168.8 million in 2015 to $416.2 million in 2018, representing a compound annual growth rate, or CAGR, of 35%. The mobile portion of our revenue has grown from $109.4 million in 2015 to $323.3 million in 2018, representing a CAGR of 44%. According to data from Eilers & Krejcik, the average CAGR for mobile revenue in the social gaming industry was 25% over the same period. We create our games around compelling user experiences, often using authentic land-based content from Scientific Games to anchor these experiences. Our first social game, Jackpot Party Casino, has continued to grow since its launch in 2012, with many of the players who began playing in 2012 still playing six years later. During the fourth quarter of 2018, our games were played by a total of more than 11.6 million players. Of those players, more than 8.4 million played each month, with approximately 32% of the monthly players playing every day, for an average of 54 minutes each day. During that same quarter, according to Eilers & Krejcik, we achieved an 8.6% share of the mobile social casino market and our revenue growth was 5.5 times as high as the social casino market average.

              We provide highly entertaining free-to-play games that millions of people play every day for their authenticity, engagement and fun. We believe our pace of content and feature releases, along with the data-driven, highly targeted and customized experience we provide in our games, result in increased loyalty and frequency of play. While most players play our games for free, a growing number of players, both in terms of total number and as a percentage of paying players, elect to purchase additional virtual coins, cards and chips to enable more game play, which can lead to the unlocking of content and features in a shorter elapsed time than players who opt to not buy virtual coins, cards or chips. The number of players who purchased virtual coins, cards and chips in the fourth quarter of 2018 was more than triple the number of players who did so in the first quarter of 2015, which has driven strong revenue, net income and AEBITDA growth. That number of paying players is still relatively small compared to the total number of players, which provides upside potential for continued growth.

              We currently offer seven core games, including social casino games Jackpot Party Casino, Gold Fish Casino, Hot Shot Casino and Quick Hit Slots, and casual games MONOPOLY Slots, Bingo Showdown and 88 Fortunes Slots. Each of these games achieved its highest monthly revenue in 2018. Our social casino games typically include slots-style play and occasionally include table games-style game play, while our casual games blend slots-style or bingo game play with adventure game features. All of our games are offered and played across multiple platforms, including Apple, Google, Facebook and Amazon. In addition to our internally created games, our content library includes recognizable, real-world slot and table games content from Scientific Games. This content allows players who like playing land-based slot machines to enjoy some of those same titles in our free-to-play games. We have access to Scientific Games' library of more than 1,500 iconic casino titles, including titles and content from third-party licensed brands such as JAMES BOND, MONOPOLY, MICHAEL JACKSON, CHEERS

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and THE GODFATHER. We believe our access to this content, coupled with our years of experience developing in-house content, uniquely positions us to create compelling social games.

              We utilize a disciplined, data-driven approach to create a portfolio of games that spans markets and appeals to a wide range of players. We gather and analyze data to fine tune the game play experience and enrich our games. We also leverage extensive insights learned through our relationship with Scientific Games, which helps us differentiate our content and create deeply immersive game play.

              We are a global organization powered by a culture of innovation. Our management team has more than 300 years of combined experience in the digital entertainment business and is supported by a diverse, collaborative team spanning three continents and five studios. Our executive leadership team emboldens our innovative, entrepreneurial spirit to guide us toward our goal of providing best-in-class player entertainment in the casual gaming industry. While much of our talent comes from within our company through employee growth and development, we supplement that talent with hand-picked candidates from top companies in the video game industry.

              Our financial model benefits from our diverse portfolio of evergreen games, our methodical approach to designing, developing and launching new titles and our attractive user economics. In addition to a revenue CAGR of 35% from 2015 through 2018, we have increased our ARPDAU from $0.21 for 2015 to $0.43 for 2018. From 2015 through 2018, we generated more than $1.2 billion in cumulative revenue and, according to Eilers & Krejcik, gained significant market share.

              For 2018 and 2017, we generated revenue of $416.2 million and $361.4 million, respectively, or an increase of 15%. In 2018, we generated net income of $39.0 million and AEBITDA of $94.0 million, improvements of $15.9 million and $24.6 million, respectively, over 2017.


Our Industry and Market Opportunity

              A number of trends are driving significant change in digital gaming, which we believe are causing growth in the casual games market and providing opportunities for us to grow our social casino games and expand into other areas of the casual games market:

    Digital gaming is an engaging form of entertainment.  Digital gaming is a large and strategically important component of the overall entertainment market. Total consumer spend on digital gaming worldwide was approximately $138 billion in 2018, which was more than twice the approximately $58 billion consumers spent on movies and music in 2017, according to data from Newzoo, MPAA and IFPI.

    Mobile devices are a leading medium to consume digital content such as games.  Consumers are increasingly using their mobile devices for entertainment, and mobile games are being played extensively.

    Increasing number of players with the emergence of casual games.  Digital game design and distribution in the casual game market has evolved as new game types and business models address incremental gaming audiences. The proliferation of smartphones and availability of mobile app stores has increased access to digital games, including in the social casino market and other areas of the casual game market. Casual games are also widening the appeal of gaming to mass audiences.

    Scale is increasingly strategic in order to succeed in mobile gaming.  We believe scale provides valuable advantages in mobile gaming. Marketing and R&D can be significant expenses for mobile gaming developers, as thousands of titles compete for limited playing time. We believe large and stable user bases reduce the risk of content investments for new games as companies leverage data-driven insights from the game play of their existing user base.

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    Social casino is an attractive market within digital gaming.  The social casino market is characterized by games that are social and competitive, in known formats and self-directed in pace and session length. Social casino games are generally evergreen in nature due to their loop-driven game play and ability to naturally incorporate a cadence of new in-game content and events. According to Eilers & Krejcik, total consumer spend in the social casino category grew at a CAGR of 21% from 2013 through 2018 and is expected to be approximately $5.8 billion in 2019.

    Additional market opportunities within the broader mobile gaming landscape.  We believe social casino games share several core mobile gaming concepts with broader markets, such as puzzle games, card games and match three games, which should allow us to leverage our existing capabilities and grow with the broader market.


Our Value Proposition for Players

              We believe in "selling fun, entertaining time" to our players as opposed to "selling slot spins." We offer the following key value propositions to our players:

    Authenticity.  Our games provide an authentic experience of land-based games, including familiar mechanics, visuals, math and audio.

    Accessibility.  Our games can be played using either mobile or web platforms.

    Fresh, new and event-driven content.  Our games offer simple, intuitive core mechanics as well as multi-layer game plays that are highly immersive.

    Personalization.  Our approach to our business allows us to provide game content that is highly personalized for each player based on the last seven days of that player's activity, enabling us to deliver a unique gaming experience to each member of our global audience.


Our Core Strengths

Diverse portfolio of evergreen games

              We have created and acquired a diverse portfolio of enduring games featuring some of the most popular and well known titles in social gaming. Our games appeal to multiple markets through varying game mechanics and unique progression sequences, or experience paths, through our games.

Strategic data-driven approach to launch new games and optimize game performance

              We incorporate data-driven decision-making into our entire game development process. For example, we use data to help determine what games we should make, when we should make them, when and how to launch them and to judge how well new features or new marketing campaigns work. Data also drives decisions in the marketing and user acquisition parts of our business. We continue to improve the efficiency of our marketing spend and the number of players we acquire per dollar by basing our decisions on historical data and the results actually achieved from marketing campaigns.

Scalable and reusable technology platform

              We have made large investments in our shared technology infrastructure that enable us to operate our games effectively at a global level and run thousands of promotions, marketing campaigns and tournaments concurrently. Our proven, custom-built technology stack allows us to easily share best practices and successful features across games in our portfolio, further decreasing time to market for new content and reducing overall development costs.

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Deep, global pool of talent

              Our expansive talent pool includes nearly 400 employees and five studio facilities. We invest in an open culture of shared success that is driven by our founders and shared across our organization. Our culture fosters enthusiasm, loyalty and teamwork, which we believe is a significant competitive advantage in the evolving mobile gaming industry and serves as the foundation of our continued success.

Unparalleled relationship with Scientific Games and other third-party content owners

              We benefit from access to one of the deepest gaming content libraries through our relationship with Scientific Games. Our connection to Scientific Games enables us to leverage attractive multi-year licensing agreements entered into by Scientific Games with the owners of other iconic third-party brands, such as JAMES BOND, MONOPOLY, MICHAEL JACKSON, CHEERS and THE GODFATHER. Our ability to access and successfully incorporate these highly recognizable brands within our games reduces our user acquisition costs and helps us target prospective players.

Strong platform provider partner relations

              Our platform partners include Apple, Google, Facebook and Amazon. We participate in our platform providers' beta tests of new applications and features. Our partners host specialized and customized promotional activities with our games and provide dedicated business and technical teams for the successful implementation of our games onto their platforms.

Strategic roadmap approach to identify specific player markets

              Our market-based portfolio management is fundamentally driven by our ability to customize our games for each target player universe. We leverage our knowledge of the playing patterns and preferences of specific segments of social gamers and create games from the ground up to appeal to those players.


Our Growth Opportunities

Continued growth from existing games

              We continue to invest in and grow our current games by adapting and developing our monetization and marketing engines to improve player engagement, increase paying player conversion and drive per-player monetization. As we continue to develop our games, we believe we will be able to further monetize our existing user base and attract new players.

Develop new social casino games

              We intend to continue to capitalize on our ability to build successful social casino games by introducing new titles that appeal to specific player segments and offer differentiated experiences.

Continue international growth and expansion

              We intend to further expand our global presence by incorporating our vast library of recognizable and regionalized brands and content in our game design, customization and marketing for regional audiences. As the global mobile gaming market expands, we believe there is an opportunity to continue to improve our reach across the rest of the world by offering more targeted content than we currently offer and a better game play experience than is currently available to international players.

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Expand into adjacent gaming markets

              We intend to continue to address additional segments within the broader mobile gaming market by expanding into adjacent areas and investing in new game markets. We believe our extensive experience in developing and operating social gaming titles strongly positions us to enter untapped areas within the casual market, such as puzzles, card, match three, poker and board games.

Leverage platform to scale through select acquisitions

              We expect to continue to pursue select strategic acquisitions to fuel our top line growth and build our portfolio. We believe we can maximize the value of an acquired asset through our scalable platform and our rigorous, data-driven acquisition, engagement and monetization model.


Estimated Preliminary Results for the Three Months Ended March 31, 2019

              Included below are certain estimated preliminary unaudited financial and other data for the three months ended March 31, 2019 and the corresponding period of the prior fiscal year. We have provided ranges, rather than specific amounts, for the three months ended March 31, 2019 because these results are preliminary and subject to change, and there is a possibility that our actual results may differ materially from these preliminary estimates. These ranges are based on the information currently available to us as of the date of this prospectus. These estimated preliminary results for the three months ended March 31, 2019 are derived from the preliminary internal financial records of Scientific Games Corporation and are subject to revisions based on our procedures and controls associated with the completion of our interim financial reporting, including all the customary reviews and approvals, and completion by our independent registered public accounting firm of its review of such financial statements for the quarter ended March 31, 2019. These estimated preliminary results should not be viewed as a substitute for interim financial statements prepared in accordance with U.S. GAAP. Our independent registered public accounting firm has not conducted a review of, and does not express an opinion or any other form of assurance with respect to, these estimated preliminary results. While we are currently unaware of any items that would require us to make adjustments to the preliminary estimates set forth below, it is possible that we or our independent registered public accounting firm may identify such items as we complete our unaudited financial statements and that our actual results may differ materially from these preliminary estimates. Accordingly, undue reliance should not be placed on these preliminary estimates. These preliminary estimates are not necessarily indicative of any future period and should be read together with "Risk Factors," "Special Note Regarding Forward-Looking Statements," "Selected Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and related notes included elsewhere in this prospectus.

 
  Three Months Ended March 31,  
(unaudited; $ in millions)
  2019 (Low)   2019 (High)   2018  

Financial Data:

                   

Revenue

  $ 117   $ 119   $ 97.5  

Operating expenses

  $ 97   $ 99   $ 99.3  

Net income (loss)(1)

  $ 13   $ 15   $ (1.1 )

Other Data:

                   

AEBITDA(1)(2)

  $ 24   $ 26   $ 22.7  

(1)
The three months ended March 31, 2019 and March 31, 2018 include approximately $7 million and $6.3 million, respectively, in intellectual property royalties paid to Scientific Games for use of its intellectual property, which are included in cost of revenue. As discussed below under "—Our Relationship with Scientific Games," as a result of the terms of the IP License

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    Agreement, following this offering, we do not expect to pay any future royalties or fees for our use of intellectual property owned by Bally Gaming, Inc., or Bally Gaming, or its affiliates in our currently available games. Under the IP License Agreement, we will be required to pay to Bally Gaming all costs, fees and expenses related to third-party licenses sublicensed to us, including proportionate pass-through expenses, such as our allocable share of minimum guarantees to the owners of such intellectual property.

(2)
AEBITDA, as used herein, is a non-GAAP financial measure that is presented as supplemental disclosure and is fully described in footnote three to "—Summary Actual and Pro Forma Consolidated Financial and Other Data." Additionally, see below for a reconciliation of AEBITDA to net income (loss), the most directly comparable GAAP measure.

              The estimated increase in revenue for the three months ended March 31, 2019 is primarily due to an increase in mobile revenue, which represented substantially all of the revenue increase. Web platform revenue decreased due to a decline in player levels as a result of player preferences causing a continued migration to mobile platforms.

              The estimated decrease in operating expenses for the three months ended March 31, 2019 is primarily due to lower contingent consideration remeasurement charges recorded in 2019, partially offset by higher cost of revenue correlated with the revenue growth, coupled with higher marketing and player acquisition costs to support ongoing growth initiatives.

              The estimated increase in net income for the three months ended March 31, 2019 is primarily due to the estimated increase in revenue described above and the $18 million decrease in contingent acquisition consideration reflected in operating expenses, as described above.

              The estimated increase in AEBITDA for the three months ended March 31, 2019 is primarily due to continued growth in revenue (as described above) and improved operating leverage, partially offset by higher marketing and player acquisition costs to support ongoing growth initiatives.

              The following table reconciles net income (loss) to AEBITDA:

 
  Three Months Ended March 31,  
(unaudited; $ in millions)
  2019 (Low)   2019 (High)   2018  

Net income (loss)

  $ 13   $ 15   $ (1.1 )

Income tax expense (benefit)

    5     5     (0.6 )

Depreciation and amortization

    2     2     5.8  

Stock-based compensation

    3     3     0.6  

Other(1)

    1     1     18.0  

AEBITDA

  $ 24   $ 26   $ 22.7  

(1)
Includes (1) contingent acquisition consideration; (2) restructuring and other, which includes charges or expenses attributable to: (a) employee severance; (b) management changes; (c) restructuring and integration; and (d) M&A and other, which includes: (i) M&A transaction costs; (ii) purchase accounting adjustments; (iii) unusual items (including certain legal settlements) and (iv) other non-cash items; and (3) other (income) expense, net.


Revolving Credit Facility

              In connection with this offering, we plan to enter into a $150.0 million revolving credit facility, or the Revolver, dated as of the date of the consummation of this offering, by and among SciPlay Holding Company, LLC, or SciPlay Holding LLC, as the borrower, SciPlay Parent LLC, as a guarantor, the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as

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administrative agent and collateral agent. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility." The effectiveness of the Revolver is conditioned upon the consummation of this offering; however, this offering is not contingent upon the effectiveness of the Revolver.


Our Relationship with Scientific Games

              Prior to the completion of this offering, we were an indirect wholly owned subsidiary of Scientific Games. In September 2016, in connection with the designation of SG Social Holding Company II, LLC and its subsidiaries as unrestricted subsidiaries under Scientific Games' debt agreements, we and Scientific Games entered into certain agreements that provided a framework for our relationship with Scientific Games, including Scientific Games' provision of intercompany services and licenses of intellectual property rights.

              In connection with the closing of this offering, we will enter into new or amended agreements with Scientific Games or one or more of its subsidiaries in order to provide a similar framework for our relationship with Scientific Games. Pursuant to a new intercompany services agreement, or the Intercompany Services Agreement, Scientific Games will continue to provide us with support for certain operational and administrative functions. Bally Gaming, a wholly owned subsidiary of Scientific Games, and SG Holding I will enter into a new intellectual property license agreement, or the IP License Agreement. SG Holding I will use $255.0 million of the net proceeds received from us in connection with this offering to make a one-time payment to Bally Gaming under the IP License Agreement, or the Upfront License Payment, and will then assign the rights of the IP License Agreement to SciPlay Holding LLC immediately following this offering.

              So long as the IP License Agreement remains in effect, we do not expect to pay any future royalties or fees for our use of intellectual property owned by Bally Gaming or its affiliates in our currently available games. Pursuant to the terms of the IP License Agreement, we will acquire an exclusive (subject to certain limited exceptions), perpetual, non-royalty bearing license to use intellectual property created or acquired by Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement. Our rights to this intellectual property will be for use in any of our currently available or future social games that are developed for mobile platforms, social media platforms, internet platforms or other interactive platforms and distributed solely via digital delivery, which games we collectively refer to as Covered Games. We will also acquire a non-exclusive, perpetual, non-royalty bearing license to use intellectual property created or acquired by Bally Gaming or its affiliates after such third anniversary, but only in our currently available games. Under the terms of the IP License Agreement, we will receive an exclusive (subject to certain limited exceptions) license to use third-party intellectual property licensed to Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement, to the extent permitted to be sublicensed to us, in any of the Covered Games and a non-exclusive license to use third-party intellectual property licensed to Bally Gaming or its affiliates after the third anniversary of the date of the IP License Agreement, to the extent permitted to be sublicensed to us, but only in our currently available games. Under the IP License Agreement, we will be required to pay to Bally Gaming all costs, fees and expenses related to such third-party licenses, including proportionate pass-through expenses, such as our allocable share of minimum guarantees to the owners of such intellectual property.

              The IP License Agreement will not provide us any right to use intellectual property created or acquired by Bally Gaming or its affiliates after the third anniversary of the date of the IP License Agreement, or licensed to Bally Gaming or its affiliates after the third anniversary of the date of the IP License Agreement in any of our future games released after the date of the IP License Agreement.

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              In addition to the license rights, we will have a right of first negotiation to convert non-exclusive licenses to exclusive licenses, and to license intellectual property rights not covered by the IP License Agreement.

              Bally Gaming will own any intellectual property that we develop, to the extent it is an improvement, enhancement, modification, or derivative work of any intellectual property licensed to us under the IP License Agreement.

              For a description of the Intercompany Services Agreement and the IP License Agreement, see "Certain Relationships and Related Party Transactions—Relationship with Scientific Games."

              We expect that being a standalone public company will provide us with a number of material opportunities and benefits, including the following:

    allowing investors to evaluate the distinct merits, performance and future prospects of our business, independent of Scientific Games' other businesses;

    improving our strategic and operational flexibility and increasing management focus as we continue to implement our strategic plan, and allowing us to respond more effectively to different player needs and the competitive environment for our business;

    allowing us to adopt a capital structure better suited to our financial profile and business needs, without competing for capital with Scientific Games' other businesses;

    creating an independent equity structure that will facilitate our ability to effect future acquisitions utilizing our capital stock; and

    facilitating incentive compensation arrangements for employees more directly tied to the performance of our business, and enhancing employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives of our business.


The Transactions

              Prior to the consummation of this offering and the organizational transactions described below, the SG Members were the only members of SciPlay Parent LLC. SciPlay was incorporated as a Nevada corporation on November 30, 2018 to serve as the issuer of the Class A common stock offered hereby.

              In connection with the closing of this offering, we will consummate the following organizational transactions:

    the operating agreement of SciPlay Parent LLC will be amended and restated, which we refer to, as so amended and restated, as the SciPlay Parent LLC Agreement, to, among other things, (i) provide for a single class of common member's interests in SciPlay Parent LLC, which we refer to as the LLC Interests, (ii) exchange all of the SG Members' existing member's interests in SciPlay Parent LLC for LLC Interests, (iii) provide for the right of the SG Members to have their LLC Interests redeemed or exchanged for shares of our Class A common stock or, at our option, cash and (iv) appoint SciPlay as the sole manager of SciPlay Parent LLC;

    SciPlay's articles of incorporation will be amended and restated to, among other things, provide for Class A common stock and Class B common stock;

    SciPlay will issue and sell 22,000,000 shares of Class A common stock to the purchasers in this offering (or 25,300,000 shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

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    SciPlay intends to use the net proceeds from this offering (including net proceeds received upon any exercise of the underwriters' option to purchase additional shares of Class A common stock), after deducting the underwriting discount, as follows:

    $280.2 million to acquire from SG Holding I 19,872,340 LLC Interests (or $326.7 million and 23,172,340 LLC Interests, if the underwriters exercise in full their option to purchase additional shares of Class A common stock); and

    $30.0 million to acquire from SciPlay Parent LLC 2,127,660 newly issued LLC Interests;

    SG Holding I will use $255.0 million of the net proceeds it receives from the sale of its LLC Interests in connection with this offering to make the Upfront License Payment required under the IP License Agreement;

    SciPlay Parent LLC intends to use the net proceeds from the sale of its newly issued LLC Interests in this offering to pay fees and expenses of approximately $10.0 million in connection with the Transactions, including this offering, and $20.0 million for general corporate purposes, including to pay a portion of contingent acquisition consideration that may become payable as a result of this offering;

    SciPlay will issue shares of Class B common stock to the SG Members, on a one-to-one basis with the number of LLC Interests owned by the SG Members following the foregoing transactions;

    following the consummation of the transactions described above, the SG Members will own 82.6% of the LLC Interests (or 80.0% if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and 100% of the shares of SciPlay's Class B common stock; and

    SciPlay, SciPlay Parent LLC and the SG Members will enter into a tax receivable agreement, or the Tax Receivable Agreement or TRA, and SciPlay and the SG Members will enter into a registration rights agreement, or the Registration Rights Agreement.

              Our corporate structure following this offering, as described above, is commonly referred to as an "Up-C" structure, which is often used by partnerships and limited liability companies when they undertake an initial public offering of their business. The Up-C structure will allow the SG Members to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or "passthrough" entity, for U.S. income tax purposes following the offering. One of these benefits is that future taxable income of SciPlay Parent LLC that is allocated to the SG Members will be taxed on a flow-through basis and therefore will not be subject to U.S. corporate taxes at the SciPlay Parent LLC entity level. Additionally, because the SG Members may redeem or exchange their LLC Interests for newly issued shares of our Class A common stock on a one-for-one basis or, at our option, for cash, the Up-C structure also provides the SG Members with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. For more information regarding the redemption and exchange of LLC Interests, see "Certain Relationships and Related Party Transactions—The Transactions—SciPlay Parent LLC Agreement—Redemption Rights of Members."

              Following the completion of the Transactions, we will be admitted as a member of SciPlay Parent LLC and will receive the same benefits as the SG Members on account of our ownership of LLC Interests in an entity treated as a partnership, or "passthrough" entity, for U.S. income tax purposes. As the SG Members redeem or exchange their LLC Interests, we will obtain a step-up in tax basis in our share of SciPlay Parent LLC assets. This step-up in tax basis will provide us with certain tax benefits, such as future depreciation and amortization deductions that can reduce the taxable

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income allocable to us. We expect to enter into the TRA with SciPlay Parent LLC and the SG Members that will provide for the payment by us to the SG Members of 85% of the amount of tax benefits, if any, that we actually realize (or in some cases are deemed to realize) as a result of (i) increases in the tax basis of assets of SciPlay Parent LLC (a) in connection with this offering, (b) resulting from any redemptions or exchanges of LLC Interests pursuant to the SciPlay Parent LLC Agreement or (c) resulting from certain distributions (or deemed distributions) by SciPlay Parent LLC and (ii) certain other tax benefits related to our making of payments under the TRA.

              We refer to the foregoing organizational transactions, including the consummation of this offering as described in this prospectus, collectively as the "Transactions." Immediately following this offering, we will be a holding company, and our sole material asset will be LLC Interests of SciPlay Parent LLC. As the sole manager of SciPlay Parent LLC, we will control all of the business and affairs of SciPlay Parent LLC. Accordingly, although we will have a minority economic interest in SciPlay Parent LLC, we will control the management of SciPlay Parent LLC.

              For more information regarding our structure after the completion of the Transactions, including this offering, see "The Transactions."

              See "Description of Capital Stock" for more information about our articles of incorporation and the terms of the Class A common stock and Class B common stock. See "Certain Relationships and Related Party Transactions" for more information about the SciPlay Parent LLC Agreement, including the terms of the LLC Interests and the right of the SG Members to have their LLC Interests redeemed or exchanged for shares of Class A common stock, or, at our option, cash, the TRA and the Registration Rights Agreement.

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              The diagram below depicts our organizational structure after giving effect to the Transactions, including this offering, based on the assumed offering and sale of 22,000,000 shares of Class A common stock in this offering at an initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and assuming no exercise by the underwriters of their option to purchase additional shares of Class A common stock in this offering:

GRAPHIC

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Summary Risk Factors

              There are a number of risks that you should understand before making an investment decision regarding this offering. These risks are discussed more fully in the section entitled "Risk Factors" following this prospectus summary. If any of these risks actually occur, our business, financial condition or results of operations would likely be materially and adversely affected. In such case, the trading price of our Class A common stock would likely decline, and you may lose all or part of your investment. These risk factors include, but are not limited to:

    Our growth depends on our ability to attract and retain players, and the loss of our players, or failure to attract new players, could materially and adversely affect our business;

    We rely on third-party platforms to make our games available to players and to collect revenue;

    Our free-to-play business model depends on the optional purchases of virtual currency to supplement the availability of periodically offered free virtual currency;

    A small number of games has generated a majority of our revenue, and we must continue to launch and enhance games that attract and retain a significant number of paying players in order to grow our revenue and sustain our competitive position;

    We rely on a small percentage of our players for nearly all of our revenue;

    We operate in a highly competitive industry, and our success depends on our ability to effectively compete;

    Legal and regulatory restrictions could adversely impact our business and limit the growth of our operations;

    We rely on the ability to use the intellectual property rights of Scientific Games and other third parties, including the third-party intellectual property rights licensed to Scientific Games;

    Our success depends on the security and integrity of the games we offer, and security breaches or other disruptions could compromise our information or the information of our players and expose us to liability, which would cause our business and reputation to suffer;

    Scientific Games controls the direction of our business, and the concentrated ownership of our common stock will prevent you and other stockholders from influencing significant decisions;

    Scientific Games' interests may conflict with our interests and the interests of our stockholders;

    We will be a "controlled company" within the meaning of the NASDAQ rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements;

    We may not achieve some or all of the anticipated benefits of being a standalone public company;

    Our sole material asset after the completion of this offering will be our interest in SciPlay Parent LLC, and, accordingly, we will depend on distributions from SciPlay Parent LLC to pay our taxes and expenses, including payments under the TRA; and

    The TRA requires us to make cash payments to the SG Members in respect of certain tax benefits to which we may be become entitled, and we expect that the payments we will be required to make will be substantial.

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Corporate Information

              SciPlay, the issuer of the Class A common stock in this offering, was incorporated in the state of Nevada on November 30, 2018 and subsequently changed its name from SG Social Games Corporation to SciPlay Corporation on March 4, 2019. SciPlay Parent LLC was organized in the state of Nevada as a limited liability company on September 1, 2016, changed its name from SG Nevada Holding Company, LLC to SG Social Parent Company, LLC on November 30, 2018 and subsequently changed its name to SciPlay Parent Company, LLC on March 4, 2019. The address of our principal executive offices is currently 6601 Bermuda Road, Las Vegas, NV 89119. Our website is currently www.sciplay.com. Information on, or accessible through, our website is not part of this prospectus and is not incorporated by reference herein, and you should not consider information on our website to be part of this prospectus or in deciding whether to purchase our Class A common stock. We have included our website address in this prospectus solely for informational purposes. Our agent for service of process in the U.S. is CSC Services of Nevada, Inc.


Implications of Being an Emerging Growth Company

              We qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. As an emerging growth company, we may take advantage of certain reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:

    only two years of audited financial statements are required to be included in this prospectus in addition to any required interim financial statements, and correspondingly reduced disclosure in "Management's Discussion and Analysis of Financial Condition and Results of Operations;"

    not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404;

    reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and

    exemptions from the requirements of holding a non-binding advisory vote on executive compensation, including golden parachute compensation.

              We may take advantage of these provisions for up to five years or until such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company upon the earliest to occur of (1) the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; (2) the date we qualify as a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, or the Exchange Act; (3) the issuance, in any three-year period, by us of more than $1.0 billion in non-convertible debt securities held by non-affiliates; and (4) the last day of the fiscal year ending after the fifth anniversary of our initial public offering.

              In addition, Section 107 of the JOBS Act also provides that an emerging growth company can use an extended transition period for complying with new or revised accounting standards. This permits an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to "opt out" of such extended transition period and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. However, we intend to take advantage of the other exemptions discussed above. Accordingly, the information contained herein may be different than the information you receive from other public companies.

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THE OFFERING

Issuer in this offering

  SciPlay Corporation

Shares of Class A common stock offered by us

 

22,000,000 shares

Underwriters' option to purchase additional shares

 

The underwriters have a 30-day option to purchase up to 3,300,000 additional shares of Class A common stock from us as described under the heading "Underwriting (Conflicts of Interest)."

Class A common stock to be outstanding after this offering

 

22,000,000 shares (or 25,300,000 shares, if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Class B common stock to be outstanding after this offering

 

104,400,000 shares (or 101,100,000 shares, if the underwriters exercise in full their option to purchase additional shares of Class A common stock), all of which will be owned by the SG Members.

Voting rights

 

Holders of Class A common stock and Class B common stock will vote together as a single class on all matters presented to stockholders for their vote or approval, except as otherwise required by applicable law. Each share of Class A common stock will entitle its holder to one vote per share, and each share of Class B common stock will entitle its holder to ten votes per share on all such matters, for so long as the number of shares of our common stock beneficially owned by the SG Members and their affiliates represents at least 10% of our outstanding shares of common stock and, thereafter, one vote per share. See "Description of Capital Stock" for a description of the material terms of our common stock.

Voting power held by all holders of Class A common stock after giving effect to this offering

 

2.1% (or 2.4%, if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Voting power held by all holders of Class B common stock after giving effect to this offering

 

97.9% (or 97.6%, if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

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Ratios of shares of Class A common stock and shares of Class B common stock to LLC Interests

 

Our articles of incorporation will require us at all times to maintain (i) a ratio of one LLC Interest owned by us for each share of Class A common stock issued by us (subject to certain exceptions for treasury shares, shares underlying certain convertible or exchangeable securities and shares of unvested restricted stock issued pursuant to certain employee incentive plans) and (ii) a one-to-one ratio between the number of shares of Class B common stock issued by us and owned by the SG Members and the number of LLC Interests owned by the SG Members, and the SciPlay Parent LLC Agreement will require SciPlay Parent LLC at all times to maintain a one-to-one ratio between the number of shares of Class A common stock issued by us and the number of LLC Interests owned by us (subject to equivalent exceptions). The SG Members will own all of our outstanding Class B common stock following the consummation of the Transactions, including this offering.

Use of proceeds

 

We estimate that the net proceeds to us from this offering will be approximately $310.2 million, or approximately $356.7 million if the underwriters exercise in full their option to purchase additional shares of our Class A common stock, assuming an initial public offering price of $15.00 per share (the midpoint of the range set forth on the cover page of this prospectus), after deducting the estimated underwriting discount.

 

We intend to use the net proceeds of this offering (including any net proceeds from the underwriters' exercise of their option to purchase additional shares of Class A common stock) to purchase newly issued LLC Interests from SciPlay Parent LLC and existing LLC Interests from SG Holding I at a purchase price per LLC Interest equal to the initial public offering price per share of Class A common stock less the underwriting discount.

 

The net proceeds received by SG Holding I and SciPlay Parent LLC in connection with this offering will be used as described in "Use of Proceeds."

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Conflicts of interest

 

Affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Macquarie Capital (USA) Inc. and RBC Capital Markets, LLC, who are underwriters in this offering, are lenders under certain credit facilities with our affiliate, Scientific Games International, Inc., a wholly owned subsidiary of Scientific Games Corporation. If any portion of the proceeds received by SG Holding I from its sale of LLC Interests to us is used to pay debt under such credit facilities, these underwriters or their affiliates may receive a portion that is 5% or more of the net proceeds of this offering due to the repayment of borrowings thereunder. Additionally, if any of the underwriters or their affiliates hold notes issued by Scientific Games International, Inc., they may receive a portion of the proceeds of this offering if any portion of the proceeds received by SG Holding I from its sale of LLC Interests to us is used to repurchase or redeem any such outstanding notes. Because of the manner in which the proceeds will be used, the offering will be conducted in accordance with Financial Industry Regulatory Authority, Inc., or FINRA, Rule 5121. This rule requires, among other things, that a qualified independent underwriter has participated in the preparation of, and has exercised the usual standards of "due diligence" with respect to, this prospectus and the registration statement of which this prospectus forms a part. Morgan Stanley & Co. LLC has agreed to act as qualified independent underwriter for the offering and to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act, specifically including those inherent in Section 11 of the Securities Act. Additionally, affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Macquarie Capital (USA) Inc. and RBC Capital Markets, LLC, who are acting as underwriters in this offering, will act as joint lead arrangers and joint bookrunners under our Revolver that we expect to enter in connection with this offering. Moreover, none of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Macquarie Capital (USA) Inc. or RBC Capital Markets, LLC is permitted to sell Class A common stock in this offering to an account over which it exercises discretionary authority without the prior specific written approval of the account holder. See "Underwriting (Conflicts of Interest)."

Controlled company exemption

 

Upon completion of this offering, we will be considered a "controlled company" for the purposes of the NASDAQ rules. As a "controlled company," we will not be subject to certain corporate governance requirements. See "Management—Controlled Company Exemption."

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Dividend policy

 

We do not anticipate declaring or paying any cash dividends on our Class A common stock for the foreseeable future. See "Dividend Policy."

Redemption rights of the SG Members

 

Pursuant to the SciPlay Parent LLC Agreement, the SG Members may, following this offering, require SciPlay Parent LLC to redeem all or a portion of the LLC Interests held by the SG Members for newly issued shares of our Class A common stock on a one-for-one basis or, at our option, a cash payment determined by reference to the arithmetic average of the volume weighted average market prices over a specified period prior to the date of redemption of one share of our Class A common stock for each LLC Interest so redeemed. We will be required to contribute cash and/or shares of Class A common stock to SciPlay Parent LLC to satisfy such redemption, and SciPlay Parent LLC will issue to us newly issued LLC Interests equal to the number of LLC Interests redeemed from the SG Members. In lieu of such a redemption, we will have the right, at our option, to effect a direct exchange of cash and/or shares of our Class A common stock for the SG Members' LLC Interests. Shares of our Class B common stock will be cancelled on a one-for-one basis whenever the SG Members' LLC Interests are so redeemed or exchanged. See "Certain Relationships and Related Party Transactions—The Transactions—SciPlay Parent LLC Agreement."

Registration Rights Agreement

 

Pursuant to the Registration Rights Agreement, we will agree to register the resale of the shares of our Class A common stock that are issuable to the SG Members upon a redemption or exchange of its LLC Interests pursuant to the SciPlay Parent LLC Agreement. See "Certain Relationships and Related Party Transactions—The Transactions—Registration Rights Agreement."

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Tax Receivable Agreement

 

We will enter into the TRA with SciPlay Parent LLC and the SG Members, which will provide for the payment by us to the SG Members of 85% of the amount of tax benefits, if any, that we actually realize (or in some circumstances are deemed to realize) as a result of (i) increases in the tax basis of assets of SciPlay Parent LLC (a) in connection with this offering, (b) resulting from any redemptions or exchanges of LLC Interests pursuant to the SciPlay Parent LLC Agreement or (c) resulting from certain distributions (or deemed distributions) by SciPlay Parent LLC and (ii) certain other tax benefits related to our making of payments under the TRA. Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, we expect that the tax savings associated with the purchase of LLC Interests in connection with this offering, together with future redemptions or exchanges of all remaining LLC Interests not owned by SciPlay pursuant to the SciPlay Parent LLC Agreement as described above, would aggregate to approximately $484.1 million over 20 years from the date of this offering based on the assumed initial public offering price of $15.00 per share of our Class A common stock, which is the midpoint of the range set forth on the cover page of this prospectus, and assuming all future redemptions or exchanges would occur one year after this offering. Under such scenario, assuming future payments are made on the date each relevant tax return is due, without extensions, we would be required to pay approximately 85% of such amount, or approximately $411.5 million, over the 20-year period from the date of this offering. If we were to elect to terminate the TRA immediately after this offering (including the use of proceeds to us therefrom), based on the assumed initial public offering price of $15.00 per share of our Class A common stock, which is the midpoint of the range set forth on the cover page of this prospectus, we estimate that we would be required to pay approximately $315.7 million in the aggregate under the TRA. See "Certain Relationships and Related Party Transactions—The Transactions—Tax Receivable Agreement."

Reserved share program

 

At our request, the underwriters have reserved for sale, at the initial public offering price, up to 3% of the shares offered by this prospectus for sale to some of our directors, officers, employees, business associates and related persons. If these persons purchase reserved shares, this will reduce the number of shares available for sale to the general public. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus.

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Risk factors

 

Investing in shares of our Class A common stock involves risk. See "Risk Factors" and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our Class A common stock.

Proposed NASDAQ Global Select Market symbol

 

"SCPL."

              Unless we specifically state otherwise or the context otherwise requires, the share information in this prospectus is as of December 31, 2018, and reflects or assumes:

    the completion of the organizational transactions as described under "The Transactions;"

    the offering and sale of 22,000,000 shares of Class A common stock in this offering at an initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus; and

    the underwriters' option to purchase up to an additional 3,300,000 shares of Class A common stock from us is not exercised.

              Unless we specifically state otherwise or the context otherwise requires, the share information in this prospectus does not give effect to or reflect the issuance of:

    6,500,000 shares of Class A common stock reserved for future grants or for sale under our Long-Term Incentive Plan as described in "Executive Compensation Long-Term Incentive Plan;" or

    104,400,000 shares of Class A common stock reserved as of the closing of this offering for future issuance upon redemption or exchange of LLC Interests by the SG Members in accordance with the terms of the SciPlay Parent LLC Agreement.

              In connection with this offering, our board of directors approved the grant of performance-conditioned restricted stock units, or PRSUs, including to our named executive officers and certain non-employee members of our board of directors (in respect of additional non-board services). The number of PRSUs will be equal to an aggregate of $59 million, divided by the initial public price of a share of our Class A common stock in this offering, and their vesting will generally be subject to the achievement of specified revenue and EBITDA goals in 2020 and/or 2022, subject to certain adjustments. Additionally, our board of directors approved a transaction award pool in an aggregate amount of $750,000, to reward employees of our company and its affiliates whose efforts have been, and will continue to be, instrumental in preparing for and executing this offering. Such transaction awards will be granted in the form of equity-based awards, effective upon the consummation of this offering, based on the initial public offering price of a share of our Class A common stock in this offering. See "Executive Compensation—Our Compensation Plans and Programs Following the Consummation of this Offering."

              As described in "Use of Proceeds," we intend to use the net proceeds of this offering to purchase LLC Interests from SG Holding I and SciPlay Parent LLC, at a purchase price per interest equal to the initial public offering price per share of Class A common stock less the underwriting discount, as follows:

    $255.0 million to purchase LLC Interests from SG Holding I, which amount will be used by SG Holding I to make the Upfront License Payment required under the IP License Agreement;

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    $10.0 million to purchase LLC Interests from SciPlay Parent LLC, which amount will be used by SciPlay Parent LLC to pay fees and expenses in connection with the Transactions, including this offering;

    $20.0 million to purchase LLC Interests from SciPlay Parent LLC, which amount will be used by SciPlay Parent LLC for general corporate purposes, including to pay a portion of contingent acquisition consideration that may become payable as a result of this offering; and

    $25.2 million to purchase LLC Interests from SG Holding I (based on the assumed offering and sale of an aggregate of 22,000,000 shares of Class A common stock in this offering at an initial public offering price of $15.00 per share, which is the midpoint of the range set forth on the cover page of this prospectus).

To the extent the net proceeds from this offering are not sufficient to cover the amounts described above, we will prioritize the payments in the order listed above with respect to the Upfront License Payment, the fees and expenses in connection with the Transactions and the general corporate purposes for SciPlay Parent LLC. If the net proceeds are still not sufficient to cover those items, we will fund the difference using our cash on hand and, if necessary, borrowings under the Revolver, and will not purchase the LLC Interests from SG Holding I described in the last bullet listed above in this paragraph. To the extent the net proceeds from this offering are greater than the amounts described in the bullets above in this paragraph, we will use the remainder to purchase additional LLC Interests from SG Holding I. We will not have any ability to control how SG Holding I uses any such amounts in excess of the amount received to make the Upfront License Payment. Based on the assumed offering and sale of 22,000,000 shares of Class A common stock in this offering at an initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, we expect we would purchase a total of 19,872,340 LLC Interests from SG Holding I. Each increase (decrease) of 1,000,000 in the number of LLC Interests purchased from SG Holding I by us would decrease (increase) by 1,000,000 the number of shares of Class B common stock held by SG Holding I following this offering and decrease (increase) the voting power in us held by the SG Members following this offering by 0.1 percentage points.

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SUMMARY ACTUAL AND PRO FORMA CONSOLIDATED FINANCIAL AND OTHER DATA

              The following tables present the summary consolidated financial and other data for SG Social Holding Company II, LLC and its subsidiaries (including SciPlay Parent Company, LLC), and summary pro forma condensed consolidated financial data for SciPlay Corporation. SG Social Holding Company II, LLC is the predecessor of the issuer, SciPlay Corporation, for financial reporting purposes. The summary consolidated statement of income data for the years ended December 31, 2018 and 2017 and the summary consolidated balance sheet data as of December 31, 2018 are derived from the audited consolidated financial statements of SG Social Holding Company II, LLC and its subsidiaries included in this prospectus.

              The results of operations for the periods presented below are not necessarily indicative of the results to be expected for any future period. The information set forth below should be read together with "Selected Consolidated Financial and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the consolidated financial statements of SG Social Holding Company II, LLC and the accompanying notes appearing elsewhere in this prospectus.

              The summary unaudited pro forma consolidated financial data of SciPlay Corporation presented below have been derived from our unaudited pro forma condensed consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma condensed consolidated balance sheet reflects the Transactions, including the consummation of this offering as described in this prospectus, as if they occurred on December 31, 2018, while the unaudited pro forma condensed consolidated statement of income gives effect to the Transactions, including the consummation of this offering as described in this prospectus, as if they occurred on January 1, 2018. The unaudited pro forma financial information includes various estimates that are subject to material change and may not be indicative of what our operations or financial position would have been had the Transactions, including the consummation of this offering as described in this prospectus, taken place on the dates indicated, or of the results that may be expected to occur in any future period. See "Unaudited Pro Forma Condensed Consolidated Financial Information" for a complete description of the adjustments and assumptions underlying the summary unaudited pro forma consolidated financial data.

              The summary consolidated financial and other data of SciPlay Corporation have not been presented, as SciPlay Corporation is a newly incorporated entity, has had no business transactions or activities to date and had no assets or liabilities during the periods presented in this section.

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  SG Social Holding
Company II, LLC
  Pro Forma
SciPlay
Corporation(1)
 
 
  Year Ended
December 31,
  Year Ended
December 31,
 
(in millions, except share and per share data)
  2018   2017   2018  

Statement of Income Data:

                   

Revenue

  $ 416.2   $ 361.4   $ 416.2  

Operating expenses:

                   

Cost of revenue(2)(7)

    160.4     138.6     134.3  

Sales and marketing(2)

    105.7     86.7     105.7  

General and administrative(2)

    34.5     44.5     34.5  

Research and development(2)

    25.6     26.5     25.6  

Depreciation and amortization

    15.1     17.0     15.1  

Contingent acquisition consideration          

    27.5         27.5  

Restructuring and other

    1.0     0.3     1.0  

Operating income

    46.4     47.8     72.5  

Other income (expense):

                   

Other income (expense), net

    3.0     (2.6 )   2.2  

Total other income (expense)

    3.0     (2.6 )   2.2  

Net income before income taxes          

    49.4     45.2     74.7  

Income tax expense

    10.4     22.1     2.1  

Net income(7)

  $ 39.0   $ 23.1     72.6  

Less: net income attributable to non-controlling interest

                (62.5 )

Net income attributable to SciPlay Corporation

              $ 10.1  

Net income per share:

                   

Basic

              $ 0.46  

Diluted

              $ 0.46  

Weighted-average shares used to compute net income per share:

                   

Basic

                22,000,000  

Diluted

                22,000,000  

 

 
  SG Social Holding
Company II, LLC
 
 
  Year Ended
December 31,
 
(in millions, except ARPDAU and percentages)
  2018   2017  

Selected Other Data:

             

AEBITDA(3)(7)

  $ 94.0   $ 69.4  

Net income margin(4)

    9.4 %   6.4 %

AEBITDA margin(3)

    22.6 %   19.2 %

Average MAU(5)

    8.3     7.6  

Average DAU(5)

    2.6     2.5  

ARPDAU(5)

  $ 0.43   $ 0.40  

Mobile penetration(5)

    78 %   72 %

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  SG Social Holding
Company II, LLC
  SciPlay
Corporation(1)(6)
 
 
  Actual   Pro Forma  
(in millions)
  As of
December 31,
2018
  As of
December 31,
2018
 

Balance Sheet Data:

             

Cash and cash equivalents

  $ 10.0   $ 30.1  

Total assets

    194.9     283.3  

Total contingent acquisition consideration liability

    29.3     29.3  

Total Parent's/Stockholders' equity

    138.6     163.9  

(1)
Gives pro forma effect to the Transactions, including the offering and sale of 22,000,000 shares of Class A common stock in this offering at an initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus. See the section titled "Unaudited Pro Forma Condensed Consolidated Financial Statements" for pro forma adjustments reflected and related methodologies applied in deriving SciPlay Corporation's Pro Forma Condensed Consolidated Statements of Income and Balance Sheet.

(2)
Excluding Depreciation and amortization.

(3)
Adjusted EBITDA, or AEBITDA, as used herein, is a non-GAAP financial measure that is presented as supplemental disclosure and is reconciled to net income as the most directly comparable GAAP measure as set forth in the below table. We define AEBITDA to include net income before: (1) interest; (2) income taxes; (3) depreciation and amortization expense; (4) contingent acquisition consideration; (5) restructuring and other, which includes charges or expenses attributable to: (a) employee severance; (b) management changes; (c) restructuring and integration; (d) M&A and other, which includes: (i) M&A transaction costs; (ii) purchase accounting adjustments; (iii) unusual items (including certain legal settlements) and (iv) other non-cash items; and (e) cost-savings initiatives; (6) stock-based compensation expense; (7) loss (gain) on debt financing transactions; and (8) other non-operating expenses (income) including foreign currency (gains) and losses. We also use AEBITDA margin, which we calculate as AEBITDA as a percentage of revenue.

Our management uses AEBITDA and AEBITDA margin to, among other things: (i) monitor and evaluate the performance of our business operations; (ii) facilitate our management's internal comparisons of our historical operating performance and (iii) analyze and evaluate financial and strategic planning decisions regarding future operating investments and operating budgets. In addition, our management uses AEBITDA and AEBITDA margin to facilitate management's external comparisons of our results to the historical operating performance of other companies that may have different capital structures and debt levels.

Our management believes that AEBITDA and AEBITDA margin are useful as they provide investors with information regarding our financial condition and operating performance that is an integral part of our management's reporting and planning processes. In particular, our management believes that AEBITDA is helpful because this non-GAAP financial measure eliminates the effects of restructuring, transaction, integration or other items that management believes have less bearing on our ongoing underlying operating performance. Management believes AEBITDA margin is useful as it provides investors with information regarding the underlying operating performance and margin generated by our business operations.

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              The following table reconciles net income to AEBITDA:

 
  SG Social Holding
Company II, LLC
 
 
  Year Ended
December 31,
 
(in millions, except percentages)
  2018   2017  

Net income(7)

  $ 39.0   $ 23.1  

Contingent acquisition consideration

    27.5      

Restructuring and other

    1.0     0.3  

Depreciation and amortization

    15.1     17.0  

Other (income) expense, net

    (3.0 )   2.6  

Income tax expense

    10.4     22.1  

Stock-based compensation

    4.0     4.3  

AEBITDA(7)

  $ 94.0   $ 69.4  

Revenue

  $ 416.2   $ 361.4  

AEBITDA margin

    22.6 %   19.2 %
(4)
Net income margin represents net income as a percentage of revenue, and is the most directly comparable GAAP measure to AEBITDA margin described above.

(5)
See the definition of key performance indicators in "Management's Discussion and Analysis of Financial Condition and Results of Operations."

(6)
Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) total Parent's/stockholders' equity by approximately $20.7 million, assuming that the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the corresponding estimated underwriting discount. Each increase (decrease) of 1,000,000 shares in the number of shares of Class A common stock offered by us would increase (decrease) the amount of total Parent's/stockholders' equity by approximately $14.1 million, assuming an initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the corresponding estimated underwriting discount. Due to our expected use of proceeds as described in "Use of Proceeds," we do not expect our pro forma cash and cash equivalents or total assets to increase beyond the amounts in the table above. Our pro forma cash and cash equivalents and total assets will be less than the amounts shown above to the extent the proceeds from this offering are not sufficient for us to purchase up to $20.0 million in LLC Interests from SciPlay Parent LLC for use by SciPlay Parent LLC for general corporate purposes as described in "Use of Proceeds."

(7)
The years ended December 31, 2018 and 2017 include $26.1 million and $23.6 million, respectively, in intellectual property royalties paid to Scientific Games for use of its intellectual property, which are included in cost of revenue. Under the terms of the IP License Agreement, we will acquire an exclusive (subject to certain limited exceptions), perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement in any Covered Games, and a non-exclusive, perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates after such third anniversary, for use in our currently available games. So long as the IP License Agreement remains in effect, we do not expect to pay any future royalties or fees for our use of intellectual property owned by Bally Gaming or its affiliates in our currently available games. Under the terms of the IP License Agreement, we will continue to receive a license under third-party intellectual property licensed to Bally Gaming or its affiliates, and we will be required to pay to Bally Gaming all costs, fees and expenses related to such third-party licenses, including proportionate pass-through expenses, such as our allocable share of minimum guarantees to the owners of such intellectual property. For a description of the IP License Agreement, see "Certain Relationships and Related Party Transactions—Relationship with Scientific Games—IP License Agreement."

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RISK FACTORS

              Investing in our Class A common stock involves a high degree of risk. You should carefully consider the following risks, together with all the other information in this prospectus, including our financial statements and notes thereto, before you invest in our Class A common stock. If any of the following risks actually materializes, our results of operations, cash flows and financial condition could be adversely affected. As a result, the trading price of our Class A common stock could decline and you could lose part or all of your investment.

Risks Related to Our Business and Industry

Our growth depends on our ability to attract and retain players, and the loss of our players, or failure to attract new players, could materially and adversely affect our business.

              Our ability to achieve growth in revenue in the future will depend, in large part, upon our ability to attract new players to our games, and retain existing players of our games. Achieving growth in our community of players may require us to increasingly engage in sophisticated and costly sales and marketing efforts that may not result in additional players.

              In addition, our ability to increase the number of players of our games will depend on continued player adoption of social casino and other forms of casual gaming. Growth in the social gaming industry and the level of demand for and market acceptance of our games are subject to a high degree of uncertainty. We cannot assure that player adoption of social gaming and our games will continue or exceed current growth rates, or that the industry will achieve more widespread acceptance.

              Additionally, as technological or regulatory standards change and we modify our technology platform to comply with those standards, we may need players to take certain actions to continue playing, such as downloading a new game client, performing age gating checks or accepting new terms and conditions. Players may stop using our games and related services at any time, including if the quality of the player experience on our platform, including our support capabilities in the event of a problem, does not meet their expectations or keep pace with the quality of the player experience generally offered by competitive games and services. In addition, expenditures by players tend to fluctuate seasonally, particularly during the summer months, and may reflect overall economic conditions.

              We face competition for leisure time, attention and discretionary spending of our players. Other forms of leisure time activities, such as offline, traditional online, personal computer and console games, television, movies, sports and the internet, are much larger and more well-established options for consumers. Consumer tastes and preferences for leisure time activities are also subject to sudden or unpredictable change on account of new innovations. If consumers do not find our games to be compelling or if other existing or new leisure time activities are perceived by our players to offer greater variety, affordability, interactivity and overall enjoyment, our business could be materially and adversely affected.

We rely on third-party platforms to make our games available to players and to collect revenue.

              Our social gaming offerings operate through Apple, Google, Facebook and Amazon, which also serve as significant online distribution platforms for our games. In 2018 and 2017, all of our revenue was generated by players using those platforms. Consequently, our expansion and prospects depend on our continued relationships with these providers, and any emerging platform providers that are widely adopted by our target player base. We are subject to the standard terms and conditions that these platform providers have for application developers, which govern the promotion, distribution and

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operation of games and other applications on their platforms, and which the platform providers can change unilaterally on short or without notice. Our business would be harmed if:

    the platform providers discontinue or limit our access to their platforms;

    governments or private parties, such as internet providers, impose bandwidth restrictions or increase charges or restrict or prohibit access to those platforms;

    the platforms decline in popularity;

    the platforms modify their current discovery mechanisms, communication channels available to developers, respective terms of service or other policies, including fees;

    the platforms impose restrictions or make it more difficult for players to buy virtual currency; or

    the platforms change how the personal information of players is made available to developers or develop their own competitive offerings.

              If alternative platforms increase in popularity, we could be adversely impacted if we fail to create compatible versions of our games in a timely manner, or if we fail to establish a relationship with such alternative platforms. Likewise, if our platform providers alter their operating platforms, we could be adversely impacted as our offerings may not be compatible with the altered platforms or may require significant and costly modifications in order to become compatible. If our platform providers were to develop competitive offerings, either on their own or in cooperation with one or more competitors, our growth prospects could be negatively impacted. If our platform providers do not perform their obligations in accordance with our platform agreements, we could be adversely impacted.

              In the past, some of these platform providers have been unavailable for short periods of time or experienced issues with their features that permit our players to purchase virtual currency. For example, in the second and third quarters of 2018, we were negatively impacted by data privacy protection changes implemented by Facebook, which impaired our players' ability to access their previously acquired virtual currency and purchase additional virtual currency. If similar events recur on a prolonged basis or other similar issues arise that impact players' ability to download our games, access social features or purchase virtual currency, it could have a material adverse effect on our revenue, operating results and brand.

Our free-to-play business model depends on the optional purchases of virtual currency to supplement the availability of periodically offered free virtual currency.

              We derive nearly all of our revenue from the sale of virtual currency used to play our games. Our games are available to players for free, and we generally generate revenue from them only if they voluntarily purchase virtual currency above and beyond the level of free virtual currency provided periodically as part of the game. If we fail to offer games that attract purchases of virtual currency, or if we fail to properly manage the economics of free versus paid currency, our business, financial condition and results of operations could be materially and adversely affected.

A small number of games has generated a majority of our revenue, and we must continue to launch and enhance games that attract and retain a significant number of paying players in order to grow our revenue and sustain our competitive position.

              Historically, we have depended on a small number of games for a majority of our revenue, and we expect that this dependency will continue for the foreseeable future. In particular, Jackpot Party Casino has accounted for a substantial portion of our revenue since its launch in 2012, including 49% of our revenue in 2017 and 44% of our revenue in 2018, and we expect it to continue to do so over the next several years. Our growth depends on our ability to consistently launch new games that achieve

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significant popularity. Each of our games generally requires significant research and development, engineering, marketing and other resources to develop, launch and sustain via regular upgrades and expansions, and such costs on average have increased. Our ability to successfully and timely launch, sustain and expand games and attract and retain paying players largely depends on our ability to:

    anticipate and effectively respond to changing game player interests and preferences;

    anticipate or respond to changes in the competitive landscape;

    develop, sustain and expand games that are fun, interesting and compelling to play and on which players want to spend money;

    retain rights to the intellectual property rights of third parties, including Scientific Games;

    build and maintain our brand and reputation;

    effectively market new games and enhancements to our existing players and new players;

    minimize launch delays and cost overruns on new games and game expansions;

    minimize downtime and other technical difficulties; and

    acquire high-quality assets, personnel and companies.

              It is difficult to consistently anticipate player demand on a large scale, particularly as we develop new games in new markets, including the hypercasual gaming market, international markets and new mobile platforms. If we do not successfully launch games that attract and retain a significant number of paying players and extend the life of our existing games, our market share, reputation and financial results could be harmed. In addition, if the popularity of Jackpot Party Casino or any of our other top games decreases significantly, that would have a material adverse effect on our results of operations, cash flows and financial condition.

              Moreover, it is difficult to predict the problems we may encounter in innovating and introducing new games, and we may need to devote significant resources to the creation, support and maintenance of our games and services. Under the IP License Agreement, our right to use any intellectual property created or acquired by Bally Gaming or its affiliates, or licensed by third parties to Bally Gaming, after the third anniversary of the date of the IP License Agreement, will be limited to use in our currently available games. This limit will also extend to derivative works of, or improvements to, intellectual property licensed to us under the IP License Agreement that are developed after the third anniversary of the date of the IP License Agreement (including by us), as such derivative works and improvements will be assigned to Bally Gaming and licensed back to us pursuant to the terms of the IP License Agreement. We cannot assure that we will be able to obtain a license for the use of any such intellectual property in our new games on commercially reasonable terms, if at all.

              We cannot assure that our initiatives to improve our player experience will always be successful. We also cannot predict whether our new games or service offerings will be well received by players, or whether improving our technology will be successful or sufficient to offset the costs incurred to develop and market these games, services or technology.

We rely on a small percentage of our players for nearly all of our revenue.

              A small percentage of our players account for nearly all of our revenue. For example, in 2017, 5.3% of our players made purchases in our games, and in 2018, 5.5% of our players made purchases in our games. However, we lose paying players in the ordinary course of business, and they may stop making purchases in our games or playing our games altogether at any time. In order to sustain or increase our revenue levels, we must attract new paying players or increase the amount our players pay. To retain paying players, we must devote significant resources so that the games they play retain their

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interest and attract them to our other games. Our new games may also attract players away from our existing games. If we fail to grow or sustain the number of our paying players, or if the rate at which we add paying players declines or if the average amount our paying players pay declines, our results of operations, cash flows and financial condition could be adversely impacted.

Our success depends upon our ability to adapt to, and offer games that keep pace with, changing technology and evolving industry standards.

              Our success depends upon our ability to attract and retain players, which is largely driven by maintaining and increasing the quantity and quality of social games. To satisfy players, we need to continue to improve their experience and innovate and introduce games that players find useful and that cause them to return to our suite of games more frequently. This includes continuing to improve our technology to optimize search results for our games, tailoring our game offerings to additional geographic and market segments, and improving the user-friendliness of our games and our ability to provide high-quality support. Our ability to anticipate or respond to changing technology and evolving industry standards and to develop and introduce new and enhanced games on a timely basis or at all is a significant factor affecting our ability to remain competitive and expand and attract new players. We cannot assure that we will achieve the necessary technological advances or have the financial resources needed to introduce new games on a timely basis or at all.

              Our players depend on our support organization to resolve any issues relating to our games. Our ability to provide effective support is largely dependent on our ability to attract, resource, and retain employees who are not only qualified to support players of our games, but are also well versed in our games. Any failure to maintain high-quality support, or a market perception that we do not maintain high-quality support, could harm our reputation, adversely affect our ability to sell virtual currency within our games to existing and prospective players, and could adversely impact our results of operations, cash flows and financial condition.

We operate in a highly competitive industry, and our success depends on our ability to effectively compete.

              Social gaming, which includes social casinos and from which we derive substantially all of our revenue, is a rapidly evolving industry with low barriers to entry. Businesses can easily launch online or mobile platforms and applications at nominal cost by using commercially available software or partnering with various established companies in these markets. The market for our games is also characterized by rapid technological developments, frequent launches of new games, changes in player needs and behavior, disruption by innovative entrants and evolving business models and industry standards. As a result, our industry is constantly changing games and business models in order to adopt and optimize new technologies, increase cost efficiency and adapt to player preferences.

              Successful execution of our strategy depends on our continuous ability to attract and retain players, adapt to the emergence of new mobile hardware or operating systems, expand the market for our games, maintain a technological edge and offer new capabilities to players. We also compete with social gaming companies, including those that offer social casinos such as Playtika, Zynga, DoubleU and others, that have no connection to regulated real money gaming, and many of those companies have a base of existing players that is larger than ours. In some cases, we compete against real money gaming operators who have expanded their games to include social casinos and leverage their land-based gaming relationship with Scientific Games to license social casino content from Scientific Games, although such rights will be limited in scope by the IP License Agreement. In those cases, customers of such real money gaming operators may choose to play our content as it is offered by the operator and not as it is offered by our social casino games, detrimentally impacting our results.

              Some of our current and potential competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating histories, greater financial, technical, and other resources

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and, in some cases, the ability to rapidly combine online platforms with traditional staffing and contingent worker solutions. These companies may use these advantages to develop different platforms and services to compete with our games, spend more on advertising and brand marketing, invest more in research and development or respond more quickly and effectively than we do to new or changing opportunities, technologies, standards, regulatory conditions or player preferences or requirements. As a result, our players may decide to stop playing our games or switch to our competitors' games.

              Moreover, current and future competitors may also make strategic acquisitions or establish cooperative relationships among themselves or with others, including our current or future third-party suppliers. By doing so, these competitors may increase their ability to meet the needs of existing or prospective freelancers and players. These developments could limit our ability to obtain revenue from existing and new buyers. If we are unable to compete effectively, successfully and at reasonable cost against our existing and future competitors, our results of operations, cash flows and financial condition could be adversely impacted.

              We offer players regular free play and frequent discounts for purchases of virtual coins to extend play in connection with our business. We cannot assure that competitive pressure will not cause us to increase the incentives that we offer to our players, which could adversely impact our results of operations, cash flows and financial condition.

Legal or regulatory restrictions could adversely impact our business and limit the growth of our operations.

              There is significant opposition in some jurisdictions to interactive social gaming, including social casinos. Some states or countries have anti-gaming groups that specifically target social casino games. Such opposition could lead these jurisdictions to adopt legislation or impose a regulatory framework to govern interactive social gaming or social casinos specifically. These could result in a prohibition on interactive social gaming or social casinos altogether, restrict our ability to advertise our games, or substantially increase our costs to comply with these regulations, all of which could have an adverse effect on our results of operations, cash flows and financial condition. We cannot predict the likelihood, timing, scope or terms of any such legislation or regulation or the extent to which they may affect our business.

              In a recent case, the United States Court of Appeals for the Ninth Circuit decided that a social casino game produced by one of our competitors should be considered illegal gambling under Washington state law. Similar lawsuits have been filed against other defendants, including Scientific Games Corporation. For example, in April 2018, a putative class action lawsuit was filed in federal district court alleging substantially the same causes of action against our social casino games. In December 2018, the federal district court assigned to the litigation denied Scientific Games Corporation's motion to dismiss the plaintiff's complaint and, in January 2019, Scientific Games Corporation filed its answer and affirmative defenses to the putative class action complaint. See "—Legal proceedings may materially adversely affect our business and our results of operations, cash flows and financial condition" and "Business—Legal Proceedings."

              In September 2018, sixteen gambling regulators signed a declaration expressing concern over the blurring of lines between gambling and video game products, including social casino gaming. The regulators committed to work together to analyze the characteristics of video games and social gaming, and to engage in an informed dialogue with the video game and social gaming industries to ensure the appropriate and efficient implementation of applicable laws and regulations. The regulators also indicated they would work closely with their consumer protection enforcement agencies. We cannot predict the likelihood, timing, scope or terms of any actions taken as a result of the declaration.

              Consumer protection concerns regarding games such as ours have been raised in the past and may again be raised in the future. Such concerns could lead to increased scrutiny over the manner in which our games are designed, developed, distributed and presented. We cannot predict the likelihood,

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timing or scope of any concern reaching a level that will impact our business, or whether we would suffer any adverse impacts to our results of operations, cash flows and financial condition.

We may share part of the regulatory burdens of our parent, Scientific Games.

              The majority of our voting power has been and, following this offering will continue to be, held by wholly owned subsidiaries of Scientific Games, and we will enter into the Intercompany Services Agreement, the IP License Agreement, the Registration Rights Agreement and the TRA with one or more of Scientific Games and its affiliates. Scientific Games and its affiliates hold many privileged licenses in jurisdictions around the world, allowing them to operate as gambling equipment and service suppliers. Regulators that issue such licenses have broad investigative powers and could ask for information from our majority stockholder, the entities from which we license intellectual property and their affiliates. Scientific Games and its affiliates, including SciPlay Parent LLC and its subsidiaries, will be obligated to cooperate with the investigations of such regulators. Such licenses may limit the operations and activities of subsidiaries and affiliates of Scientific Games, including SciPlay Parent LLC and its subsidiaries.

Data privacy and security laws and regulations in the jurisdictions in which we do business could increase the cost of our operations and subject us to possible sanctions and other penalties

              We collect, process, store, use and share data, some of which contains personal information. Our business is therefore subject to a number of federal, state, local and foreign laws and regulations governing data privacy and security, including with respect to the collection, storage, use, transmission, sharing and protection of personal information and other consumer data. Such laws and regulations may be inconsistent among countries or conflict with other rules. In particular, the European Union, or EU, has adopted strict data privacy and security regulations. Following recent developments, such as the European Court of Justice's 2015 ruling that the transfer of personal data from the EU to the U.S. under the EU/U.S. Safe Harbor was an invalid mechanism of personal data transfer, the adoption of the EU-U.S. Privacy Shield as a replacement for the Safe Harbor, and the effectiveness of the EU's General Data Protection Regulation, or GDPR, as of May 2018, data privacy and security compliance in the EU are increasingly complex and challenging. The GDPR created new compliance obligations applicable to our business and some of our players, which could cause us to change our business practices, and increases financial penalties for noncompliance (including possible fines of up to four percent of global annual revenue for the preceding financial year or €20 million (whichever is higher) for the most serious violations). The scope of data privacy and security regulations worldwide continues to evolve, and we believe that the adoption of increasingly restrictive regulations in this area is likely within the U.S. and other jurisdictions. For example, in June 2018, California enacted the California Consumer Privacy Act, or CCPA, which is presently going into effect on January 1, 2020. When effective, the new law will, among other things, require new disclosures to California consumers, impose new rules for collecting or using information about minors, and afford consumers new abilities to opt out of certain disclosures of personal information. California legislators have stated that they intend to propose amendments to the CCPA before it goes into effect, and it remains unclear what, if any, modifications will be made to this legislation or how it will be interpreted. The U.S. Congress may also pass a law to preempt all or part of the CCPA. As passed, the effects of the CCPA potentially are significant, however, and may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply. There currently are a number of proposals related to data privacy or security pending before federal, state, and foreign legislative and regulatory bodies. For example, the European Union is contemplating the adoption of the Regulation on Privacy and Electronic Communications, which is expected to take effect in 2019, that would govern data privacy and the protection of personal data in electronic communications, in particular for direct marketing purposes. Efforts to comply with these and other data privacy and security restrictions that may be enacted could require us to modify our data processing practices and

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policies and increase the cost of our operations. Failure to comply with such restrictions could subject us to criminal and civil sanctions and other penalties. In part due to the uncertainty of the legal climate, complying with regulations, and any applicable rules or guidance from self-regulatory organizations relating to privacy, data protection, information security and consumer protection, may result in substantial costs and may necessitate changes to our business practices, which may compromise our growth strategy, adversely affect our ability to attract or retain players, and otherwise adversely affect our business, financial condition and operating results.

              Any failure or perceived failure by us to comply with our posted privacy policies, our privacy-related obligations to players or other third parties, or any other legal obligations or regulatory requirements relating to privacy, data protection, or information security may result in governmental investigations or enforcement actions, litigation, claims, or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our players to lose trust in us, and otherwise materially and adversely affect our reputation and business. Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to us may limit the adoption and use of, and reduce the overall demand for, our games. Additionally, if third parties we work with violate applicable laws, regulations, or agreements, such violations may put our players' data at risk, could result in governmental investigations or enforcement actions, fines, litigation, claims or public statements against us by consumer advocacy groups or others and could result in significant liability, cause our players to lose trust in us and otherwise materially and adversely affect our reputation and business. Further, public scrutiny of, or complaints about, technology companies or their data handling or data protection practices, even if unrelated to our business, industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs and risks.

We rely on the ability to use the intellectual property rights of Scientific Games and other third parties, including the third-party intellectual property rights licensed to Scientific Games that we have enjoyed as an indirect subsidiary of Scientific Games, and we may lose the benefit of any intellectual property owned by or licensed to Scientific Games if it ceases to hold certain minimum percentages of the voting power in our company.

              Substantially all of our games rely on products, technologies and other intellectual property that are licensed from Scientific Games and other third parties. Since September 2016, we have been party to an intercompany license agreement with Scientific Games pursuant to which we receive the right to use certain patents, brands, trademarks and other intellectual property owned by or licensed to Scientific Games. In addition, as an indirect subsidiary of Scientific Games, we benefit from intellectual property licensed to Scientific Games for the benefit of it and its subsidiaries. Under the IP License Agreement and as a subsidiary of Scientific Games following the Transactions, we expect, but cannot guarantee that we will be able to continue to receive those rights on favorable or reasonable terms, and licensors may have approval rights over any future sublicenses by Scientific Games. The IP License Agreement has a change of control provision that requires Bally Gaming's consent, not to be unreasonably withheld, in the event of changes of control of our company that are not initiated by Scientific Games. Bally Gaming could reasonably withhold its consent, and therefore have the right to terminate the IP License Agreement, if, for example, a competitor of Scientific Games were to acquire more than 50% of the voting power in our company. If Bally Gaming were to exercise this termination right, we would lose the benefit of any intellectual property licensed to us under the IP License Agreement, which is essential to our business, including any intellectual property that we develop, to the extent it is an improvement, enhancement, modification, or derivative work of any intellectual property licensed to us under the IP License Agreement. Any transaction that results in Scientific Games ceasing to hold at least 50% of the voting power in our company will be considered a change of control transaction requiring Bally Gaming's consent, except for: (i) transactions initiated by Scientific

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Games, or (ii) decreases in voting power resulting from (a) Scientific Games selling any ownership interests in our company, either privately or through additional public offerings, or (b) any future issuance of additional shares of our capital stock. In addition, our rights to any third-party intellectual property licensed to Bally Gaming or its affiliates and sublicensed to us under the IP License Agreement are subject to any change of control provisions in the applicable third-party license. For a description of the IP License Agreement, see "Certain Relationships and Related Party Transactions—Relationship with Scientific Games—IP License Agreement."

              Further, even absent termination of the IP License Agreement, if Scientific Games ceases to hold at least 50% of the voting power in our company, or such other percentage as may be required by a specific third-party license between the applicable third party and Scientific Games, we may also lose the benefit of any intellectual property licensed to Scientific Games for the benefit of it or its subsidiaries. We have little control over future amendments or renewals of third-party licenses to which we are not a party, and such amendments and renewals may affect the ability of Scientific Games to sublicense such third-party intellectual property rights to us, or our ability to benefit directly from such intellectual property without a sublicense as a subsidiary of Scientific Games.

              The future success of our business will depend, in part, on our ability to obtain, retain or expand licenses for technologies and services in a competitive market. We cannot assure that these third-party licenses, including the IP License Agreement, or support for such licensed technologies and services, will continue to be available to us on commercially reasonable terms, if at all. In the event that we lose the benefit of, or cannot renew and/or expand existing licenses, we may be required to discontinue or limit our use of the technologies and services that include or incorporate the licensed intellectual property. In addition, while we are controlled by Scientific Games, we may not have the leverage to negotiate amendments to the IP License Agreement, if required, on terms as favorable to us as those we would negotiate with an unaffiliated third party.

              Some of our license agreements contain minimum guaranteed royalty payments to the third party, and other agreements are sublicenses where such payment obligations are passed on to us by the sublicensor, including under the IP License Agreement. If we are unable to generate sufficient revenue to offset the minimum guaranteed royalty payments, it could have a material adverse effect on our results of operations, cash flows and financial condition. Our license agreements, including both direct licenses and sublicensing arrangements, typically contain customary restrictions on our ability to use or transfer the licensed rights, including in connection with certain strategic transactions, such as a change of control of the licensee. Although we believe that we are complying with our obligations under these license agreements and do not believe them to be in jeopardy of being terminated, we cannot assure that any or all of these license agreements in fact will remain in effect. Under certain of these agreements, the licensor has the right to audit our use of their intellectual property. Disputes with licensors over uses or terms could result in the payment of additional royalties or penalties by us, cancellation or non-renewal of the underlying license or litigation.

Our business depends on the protection of our proprietary information and our owned and licensed intellectual property.

              We believe that our success depends, in part, on protecting our owned and licensed intellectual property in the U.S. and in foreign countries. Our intellectual property includes certain trademarks and copyrights relating to our games, and proprietary or confidential information that is not subject to formal intellectual property protection. Intellectual property that is significant to our business is owned by Scientific Games and other third parties. Our success may depend, in part, on our and our licensors' ability to protect the trademarks, trade dress, names, logos or symbols under which we market our games and to obtain and maintain patent, copyright and other intellectual property protection for the technologies, designs, software and innovations used in our games and our business. We cannot assure that we will be able to build and maintain consumer value in our trademarks, copyrights or other intellectual property protection in our technologies, designs, software and innovations or that any patent, trademark, copyright or other intellectual property right will provide us with competitive advantages.

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              We also rely on trade secrets and proprietary knowledge. We enter into confidentiality agreements with our employees and independent contractors regarding our trade secrets and proprietary information, but we cannot assure that the obligation to maintain the confidentiality of our trade secrets and proprietary information will be honored.

              In the future we may make, claims of infringement against third parties, or make claims that third-party intellectual property rights are invalid or unenforceable. These claims could:

    cause us to incur greater costs and expenses in the protection of our intellectual property;

    potentially negatively impact our intellectual property rights, for example, by causing one or more of our intellectual property rights to be ruled or rendered unenforceable or invalid; or

    divert management's attention and our resources.

The intellectual property rights of others may prevent us from developing new games, entering new markets or may expose us to liability or costly litigation.

              Our success depends in part on our ability to continually adapt our games to incorporate new technologies and to expand into markets that may be created by new technologies. If technologies are protected by the intellectual property rights of our competitors or other third parties, we may be prevented from introducing games based on these technologies or expanding into markets created by these technologies.

              We cannot assure that our business activities and games will not infringe upon the proprietary rights of others, or that other parties will not assert infringement claims against us. A successful claim of infringement by a third party against us, our games or one of our licensees in connection with the use of our technologies, or an unsuccessful claim of infringement made by us against a third party or its products or games, could adversely affect our business or cause us financial harm. Any such claim and any resulting litigation, should it occur, could:

    be expensive and time-consuming to defend or require us to pay significant amounts in damages;

    result in invalidation of our proprietary rights or render our proprietary rights unenforceable;

    cause us to cease making, licensing or using games that incorporate the intellectual property;

    require us to redesign, reengineer or rebrand our games or limit our ability to bring new games to the market in the future;

    require us to enter into costly or burdensome royalty, licensing or settlement agreements in order to obtain the right to use a product or process;

    impact the commercial viability of the games that are the subject of the claim during the pendency of such claim; or

    require us to stop selling the infringing games.

Our success depends on the security and integrity of the games we offer, and security breaches or other disruptions could compromise our information or the information of our players and expose us to liability, which would cause our business and reputation to suffer.

              We believe that our success depends, in large part, on providing secure games to our players. Our business sometimes involves the storage, processing and transmission of players' proprietary, confidential and personal information. We also maintain certain other proprietary and confidential information relating to our business and personal information of our personnel. Despite our security measures, our games may be vulnerable to attacks by hackers, players, vendors or employees or

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breached due to malfeasance or other disruptions. Any security breach or incident that we experience could result in unauthorized access to, misuse of, or unauthorized acquisition of our or our players' data, the loss, corruption or alteration of this data, interruptions in our operations, or damage to our computers or systems or those of our players or third-party platforms. Any of these could expose us to claims, litigation, fines and potential liability.

              An increasing number of online services have disclosed security breaches, some of which have involved sophisticated and highly targeted attacks on portions of their services. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not foreseeable or recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, public perception of the effectiveness of our security measures and brand could be harmed, and we could lose players. Data security breaches and other data security incidents may also result from non-technical means, for example, actions by employees or contractors. Any compromise of our security could result in a violation of applicable privacy and other laws, regulatory or other governmental investigations, enforcement actions, and legal and financial exposure, including potential contractual liability that is not always limited to the amounts covered by our insurance. Any such compromise could also result in damage to our reputation and a loss of confidence in our security measures. Any of these effects could have a material adverse impact on our results of operations, cash flows and financial condition.

              Our ability to prevent anomalies and monitor and ensure the quality and integrity of our games and software is periodically reviewed and enhanced, but may not be sufficient to prevent future attacks, breaches or disruptions. Similarly, we regularly assess the adequacy of our security systems, including the security of our games and software to protect against any material loss to any of our players and the integrity of our games to players. However, we cannot assure that our business will not be affected by a security breach or lapse.

If we sustain cyber-attacks or other privacy or data security incidents that result in security breaches, we could suffer a loss of sales and increased costs, exposure to significant liability, reputational harm and other negative consequences.

              Our information technology may be subject to cyber-attacks, viruses, malicious software, break-ins, theft, computer hacking, employee error or malfeasance or other security breaches. Hackers and data thieves are increasingly sophisticated and operate large-scale and complex automated attacks. Experienced computer programmers and hackers may be able to penetrate our security controls and misappropriate or compromise sensitive personal, proprietary or confidential information, create system disruptions or cause shutdowns. They also may be able to develop and deploy malicious software programs that attack our systems or otherwise exploit any security vulnerabilities. Our systems and the data stored on those systems may also be vulnerable to security incidents or security attacks, acts of vandalism or theft, coordinated attacks by activist entities, misplaced or lost data, human errors, or other similar events that could negatively affect our systems and the data stored on those systems, and the data of our business partners. Further, third parties, such as hosted solution providers, that provide services to the Company, could also be a source of security risks in the event of a failure of their own security systems and infrastructure.

              The costs to eliminate or address the foregoing security threats and vulnerabilities before or after a cyber incident could be significant. Our remediation efforts may not be successful and could result in interruptions, delays or cessation of service, and loss of existing or potential suppliers or players. As threats related to cyber-attacks develop and grow, we may also find it necessary to make further investments to protect our data and infrastructure, which may impact our results of operations. Although we have insurance coverage for protecting against cyber-attacks, it may not be sufficient to cover all possible claims, and we may suffer losses that could have a material adverse effect on our

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business. We could also be negatively impacted by existing and proposed U.S. and non-U.S. laws and regulations, and government policies and practices related to cybersecurity, data privacy, data localization and data protection.

We rely on information technology and other systems, and any failures in our systems or errors, defects or disruptions in our games could diminish our brand and reputation, subject us to liability and could disrupt our business and adversely impact our results.

              We rely on information technology systems that are important to the operation of our business, some of which are managed by third parties. These third parties are typically under no obligation to renew agreements and there is no guarantee that we will be able to renew these agreements on commercially reasonable terms, or at all. These systems are used to process, transmit and store electronic information, to manage and support our business operations and to maintain internal control over our financial reporting. In addition, we collect and store certain data, including proprietary business information, and may have access to confidential or personal information in certain of our businesses that is subject to privacy and security laws, and regulations. We could encounter difficulties in developing new systems, maintaining and upgrading current systems and preventing security breaches. Among other things, our systems are susceptible to damage, outages, disruptions or shutdowns due to fire, floods, power loss, break-ins, cyber-attacks, network penetration, denial of service attacks and similar events. Any failures in our computer systems or telecommunications services could affect our ability to operate our games or otherwise conduct business.

              A meaningful portion of our game traffic is hosted by third-party data centers, such as Amazon Web Services, or AWS. Such third parties provide us with computing and storage capacity, and AWS is under no obligation to renew the agreements related to these services with us on commercially reasonable terms or at all. If we are unable to renew these agreements on commercially reasonable terms, or if one of our data center operators is acquired, we may be required to transfer our servers and other infrastructure to new data center facilities and we may incur significant costs and possible lengthy service interruptions in connection with doing so, potentially causing harm to our reputation. If a game is unavailable or operates more slowly than anticipated when a player attempts to access it, that player may stop playing the game and be less likely to return to the game.

              Portions of our information technology infrastructure, including those operated by third parties, may experience interruptions, delays or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time. We may not be successful in implementing new systems and transitioning data, which could cause business disruptions and be more expensive, time-consuming, disruptive and resource-intensive. We have no control over third parties that provide services to us and those parties could suffer problems or make decisions adverse to our business. We have contingency plans in place to prevent or mitigate the impact of these events. However, such disruptions could materially and adversely impact our ability to deliver games to players and interrupt other processes. If our information systems do not allow us to transmit accurate information, even for a short period of time, to key decision-makers, the ability to manage our business could be disrupted and our results of operations, cash flows and financial condition could be materially and adversely affected. Failure to properly or adequately address these issues could impact our ability to perform necessary business operations, which could materially and adversely affect our reputation, competitive position, results of operations, cash flows and financial condition.

              Substantially all of our games rely on data transferred over the internet, including wireless internet. Access to the internet in a timely fashion is necessary to provide a satisfactory player experience to the players of our games. Third parties, such as telecommunications companies, could prevent access to the internet or limit the speed of our data transmissions, with or without reason, causing an adverse impact on our player experience that may materially and adversely affect our reputation, competitive position, results of operations, cash flows and financial condition. In addition,

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telecommunications companies may implement certain measures, such as increased cost or restrictions based on the type or amount of data transmitted, that would impact consumers' ability to access our games, which could materially and adversely affect our reputation, competitive position, results of operations, cash flows and financial condition. Furthermore, internet penetration may be adversely affected by difficult global economic conditions or the cancellation of government programs to expand broadband access.

Our games and other software applications and systems, and the third-party platforms upon which they are made available could contain undetected errors.

              Our games and other software applications and systems, as well as the third-party platforms upon which they are made available, could contain undetected errors that could adversely affect the performance of our games. For example, these errors could prevent the player from making in-app purchases of virtual coins, which could harm our operating results. They could also harm the overall game-playing experience for our players, which could cause players to reduce their playing time or in game purchases, discontinue playing our games altogether, or not recommend our games to other players. Such errors could also result in our games being non-compliant with applicable laws or create legal liability for us. Resolving such errors could disrupt our operations, cause us to divert resources from other projects, or harm our operating results.

Some of our players may obtain virtual currency used in, or otherwise alter the intended game play of, our games through hacking or other unauthorized methods, resulting in a negative impact to our revenue.

              Unauthorized operators may develop "hacks" that enable players to alter the intended game play or obtain unfair advantages in our games. For example, although we do not permit the exchange of virtual currency between accounts or with third parties, it is possible that unauthorized operators could offer "hacks" that allow players to obtain virtual currency through unauthorized methods, potentially having a negative impact on the amount of revenue we collect from players. We could change our business model and allow authorized trading in the future, which could result in additional opportunities for players to obtain virtual currency for use in our games through unauthorized methods.

              Additionally, unrelated third parties may attempt to scam our players with fake offers for virtual currency or other game benefits. These scams may harm the experience of our players, disrupt the virtual economies of our games and reduce the demand for virtual currency, which may result in increased costs to combat such programs and scams, a loss of revenue from the sale of virtual currency and a loss of players.

We may use open source software in a manner that could be harmful to our business.

              We use open source software in connection with our technology and games. The original developers of the open source code provide no warranties on such code. Moreover, some open source software licenses require players who distribute open source software as part of their proprietary software to publicly disclose all or part of the source code to such software and/or make available any derivative works of the open source code on unfavorable terms or at no cost. We try to use open source software in a manner that will not require the disclosure of the source code to our proprietary software or prevent us from charging fees to our players for use of our proprietary software. However, we cannot guarantee that these efforts will be successful, and thus, there is a risk that the use of such open source code may ultimately preclude us from charging fees for the use of certain software, require us to replace certain code used in our games, pay a royalty to use some open source code, make the source code of our games publicly available or discontinue certain games. Our results of operations, cash flows and financial condition could be adversely affected by any of the above requirements.

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Our inability to complete acquisitions and integrate those businesses successfully could limit our growth or disrupt our plans and operations.

              From time to time, we pursue strategic acquisitions, such as our acquisition of Spicerack in April 2017. Our ability to succeed in implementing our strategy will depend to some degree upon our ability to identify and complete commercially viable acquisitions. We cannot assure that acquisition opportunities will be available on acceptable terms or at all, or that we will be able to obtain necessary financing or regulatory approvals to complete potential acquisitions.

              We may not be able to successfully integrate any businesses that we acquire or do so within the intended timeframes. We could face significant challenges in managing and integrating our acquisitions and our combined operations, including acquired assets, operations and personnel. In addition, the expected cost synergies associated with such acquisitions may not be fully realized in the anticipated amounts or within the contemplated timeframes or cost expectations, which could result in increased costs and have an adverse effect on our prospects, results of operations, cash flows and financial condition. We would expect to incur incremental costs and capital expenditures related to integration activities.

              Acquisition transactions may disrupt our ongoing business. The integration of acquisitions would require significant time and focus from management and might divert attention from the day-to-day operations of the combined business or delay the achievement of our strategic objectives.

Failure in pursuing or executing new business initiatives could have a material adverse impact on our business and future growth.

              Our growth strategy includes evaluating, considering and effectively executing new business initiatives, such as hypercasual games, which can be difficult. Management may not properly ascertain or assess the risks of new initiatives, and subsequent events may alter the risks that were evaluated at the time we decided to execute any new initiative. In particular, initiatives such as hypercasual gaming are subject to intense competition due to low barriers to entry and the difficulty of differentiating games through intellectual property. Entering into any new initiative can also divert our management's attention from other business issues and opportunities. Failure to effectively identify, pursue and execute new business initiatives, may adversely affect our reputation, business, financial condition and results of operations.

Our business may suffer if we do not successfully manage our current and potential future growth.

              We have grown significantly in recent years and we intend to continue to expand the scope and geographic reach of the games we provide. Our total revenue increased to $416.2 million in 2018, from $361.4 million in 2017 and $274.6 million in 2016. Our anticipated future growth will likely place significant demands on our management and operations. Our success in managing our growth will depend, to a significant degree, on the ability of our executive officers and other members of senior management to operate effectively, and on our ability to improve and develop our financial and management information systems, controls and procedures. In addition, we will likely have to successfully adapt our existing systems and introduce new systems, expand, train and manage our employees and improve and expand our sales and marketing capabilities.

              If we are unable to properly and prudently manage our operations as they continue to grow, or if the quality of our games deteriorates due to mismanagement, our brand name and reputation could be severely harmed, and our business, prospects, financial condition and results of operations could be adversely affected.

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The Revolver we will enter into in connection with this offering imposes certain restrictions that may affect our ability to operate our business and make payments on our indebtedness.

              In connection with this offering, we plan to enter into the Revolver, which will contain covenants that, among other things, will restrict our ability to incur additional indebtedness; incur liens; sell, transfer or dispose of property and assets; invest; make dividends or distributions or other restricted payments and engage in affiliate transactions. In addition, we will be required to maintain a maximum total net leverage ratio not to exceed 2.50:1.00 and maintain a minimum fixed charge coverage ratio of no less than 4.00:1.00. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility." The Revolver will limit our ability to make certain payments, including dividends or distributions on SciPlay Parent LLC's equity and other restricted payments, provided, however, that payments in respect of certain tax distributions under the SciPlay Parent LLC Agreement and certain payments under the TRA will be permitted, and payments to SciPlay Parent LLC's direct or indirect parent made on or prior to the closing date of the Revolver in an amount not to exceed the net cash proceeds of this offering are permitted, among other customary exceptions.

              Moreover, the new Revolver will require us to dedicate a portion of our cash flow from operations to interest payments, thereby reducing the availability of cash flow to fund working capital, capital expenditures and other general corporate purposes; increasing our vulnerability to adverse general economic, industry or competitive developments or conditions; and limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate or in pursuing our strategic objectives.

We may be exposed to the risk of increased interest rates.

              The Revolver we plan to enter into in connection with this offering has variable rates of interest, some of which use the London Inter-Bank Offered Rate, or LIBOR, as a benchmark. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility." Accordingly, we may face increased rates over time. There is currently uncertainty regarding the continued use and reliability of LIBOR, and any financial instruments or agreements using LIBOR as a benchmark interest rate may be adversely affected. This uncertainty about the future of LIBOR and the potential discontinuance of LIBOR may exacerbate the risk to us of increased interest rates, and our business, prospects, financial condition and results of operations could be materially and adversely affected.

We may require additional capital to meet our financial obligations and support business growth, and this capital may not be available on acceptable terms or at all.

              Based on our current plans and market conditions, we believe that cash flows generated from our operations, the proceeds from this offering and borrowing capacity under the Revolver will be sufficient to satisfy our anticipated cash requirements in the ordinary course of business for the foreseeable future. However, we intend to continue to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new games and features or enhance our existing games, improve our operating infrastructure or acquire complementary businesses, personnel and technologies. Accordingly, we may need to engage in equity or debt financings in addition to our Revolver to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A common stock. Any debt financing we secure in the future could include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain

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additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.

We track certain performance metrics with internal and third-party tools and do not independently verify such metrics. Certain of our performance metrics are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and adversely affect our business.

              We track certain performance metrics, including the number of active and paying players of our games. Our performance metrics tools have a number of limitations and our methodologies for tracking these metrics may change over time, which could result in unexpected changes to our metrics, including the metrics we report. If the internal tools we use to track these metrics undercount or over count performance or contain algorithm or other technical errors, the data we report may not be accurate. In addition, limitations or errors with respect to how we measure data (or the data that we measure) may affect our understanding of certain details of our business, which could affect our longer-term strategies. Furthermore, our performance metrics may be perceived as unreliable or inaccurate by players, analysts or business partners. If our performance metrics are not accurate representations of our business, player base or traffic levels, if we discover material inaccuracies in our metrics or if the metrics we rely on to track our performance do not provide an accurate measurement of our business, our reputation may be harmed and our business, prospects, financial condition and results of operations could be materially and adversely affected.

Our results of operations fluctuate due to seasonality and other factors and, therefore, our periodic operating results are not guarantees of future performance.

              Our results of operations can fluctuate due to seasonal trends and other factors. Player activity is generally slower in the second and third quarters of the year, particularly during the summer months. Certain other seasonal trends and factors that may cause our results to fluctuate include:

    the geographies where we operate;

    holiday and vacation seasons;

    climate and weather;

    economic and political conditions; and

    timing of the release of new games.

In light of the foregoing, results for any quarter are not necessarily indicative of the results that may be achieved in another quarter or for the full fiscal year. We cannot assure that the seasonal trends and other factors that have impacted our historical results will repeat in future periods as we cannot influence or forecast many of these factors.

We rely on skilled employees with creative and technical backgrounds.

              We rely on our highly skilled, technically trained and creative employees to develop new technologies and create innovative games. Such employees, particularly game designers, engineers and project managers with desirable skill sets are in high demand, and we devote significant resources to identifying, hiring, training, successfully integrating and retaining these employees. A lack of skilled technical workers could delay or negatively impact our business plans, ability to compete, results of operations, cash flows and financial condition.

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Our results of operations, cash flows and financial condition could be affected by natural events in the locations in which we or our key providers or suppliers operate.

              We may be impacted by severe weather and other geological events, including hurricanes, earthquakes, floods or tsunamis that could disrupt our operations or the operations of our key providers or suppliers. Natural disasters or other disruptions at any of our facilities or our key providers' or suppliers' facilities, such as AWS, Apple, Google, Facebook and Amazon may impair the operation, development or provision of our games. While we insure against certain business interruption risks, we cannot assure that such insurance will compensate us for any losses incurred as a result of natural or other disasters. Any serious disruption to our operations, or those of our key providers or suppliers could have a material adverse effect on our results of operations, cash flows and financial condition.

Our foreign operations expose us to business and legal risks.

              We generate a portion of our revenue from operations outside of the U.S. For the years ended December 31, 2018 and 2017, we derived approximately 8.6% and 9.4%, respectively, of our revenue from sales to players outside of the U.S. We also have significant operations, including game development operations, in Israel.

              Our operations in foreign jurisdictions may subject us to additional risks customarily associated with such operations, including: the complexity of foreign laws, regulations and markets; the uncertainty of enforcement of remedies in foreign jurisdictions; the effect of currency exchange rate fluctuations; the impact of foreign labor laws and disputes; the ability to attract and retain key personnel in foreign jurisdictions; the economic, tax and regulatory policies of local governments; compliance with applicable anti-money laundering, anti-bribery and anti-corruption laws, including the Foreign Corrupt Practices Act and other anti-corruption laws that generally prohibit U.S. persons and companies and their agents from offering, promising, authorizing or making improper payments to foreign government officials for the purpose of obtaining or retaining business; and compliance with applicable sanctions regimes regarding dealings with certain persons or countries. Certain of these laws also contain provisions that require accurate record keeping and further require companies to devise and maintain an adequate system of internal accounting controls. Although we have policies and controls in place that are designed to ensure compliance with these laws, if those controls are ineffective or an employee or intermediary fails to comply with the applicable regulations, we may be subject to criminal and civil sanctions and other penalties. Any such violation could disrupt our business and adversely affect our reputation, results of operations, cash flows and financial condition. In addition, our international business operations could be interrupted and negatively affected by terrorist activity, political unrest or other economic or political uncertainties. Moreover, foreign jurisdictions could impose tariffs, quotas, trade barriers and other similar restrictions on our international sales.

              Further, our ability to expand successfully in foreign jurisdictions involves other risks, including difficulties in integrating foreign operations, risks associated with entering jurisdictions in which we may have little experience and the day-to-day management of a growing and increasingly geographically diverse company. We may not realize the operating efficiencies, competitive advantages or financial results that we anticipate from our investments in foreign jurisdictions.

Changes in tax laws or tax rulings, or the examination of our tax positions, could materially affect our financial condition and results of operations.

              Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. Our existing corporate structure and intercompany arrangements have been implemented in a manner we believe is in compliance with current prevailing tax laws. However, the tax benefits that we intend to eventually derive could be undermined due to changing tax laws. In

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addition, the taxing authorities in the U.S. and other jurisdictions where we do business regularly examine income and other tax returns and we expect that they may examine our income and other tax returns. The ultimate outcome of these examinations cannot be predicted with certainty.

The recent comprehensive tax reform in the U.S. could adversely affect our business and financial condition.

              The U.S. enacted comprehensive tax legislation that includes significant changes to the taxation of business entities. These changes include, among others, (i) a permanent reduction to the corporate income tax rate, (ii) a partial limitation on the deductibility of business interest expense, (iii) a shift of the U.S. taxation of multinational corporations from a tax on worldwide income to a territorial system (along with certain rules designed to prevent erosion of the U.S. income tax base) and (iv) a one-time tax on accumulated offshore earnings held in cash and cash equivalents and illiquid assets, with the latter taxed at a lower rate. Because these tax law changes are relatively new, we are still evaluating the impact they may have on our business and results of operations in the future, and although at this time we do not expect that the changes will have an overall significant adverse impact on our business and financial condition, we cannot assure you that our business and results of operations will not be adversely affected by these new laws.

Legal proceedings may materially adversely affect our business and our results of operations, cash flows and financial condition.

              We have been party to, are currently party to, and in the future may become subject to additional, legal proceedings in the operation of our business, including, but not limited to, with respect to consumer protection, gambling-related matters, employee matters, alleged service and system malfunctions, alleged intellectual property infringement and claims relating to our contracts, licenses and strategic investments.

              For example, in a recent case, the United States Court of Appeals for the Ninth Circuit held that a plaintiff had stated a cognizable putative class action claim that a social casino game, Big Fish Casino, which is produced by one of our competitors, falls within Washington State's statutory definition of an illegal gambling game, and the Ninth Circuit accordingly remanded the case to the federal district court for further proceedings on plaintiff's claim. In April 2018, a putative class action lawsuit, Sheryl Fife v. Scientific Games Corp., was filed against our parent, Scientific Games Corporation, in federal district court that is directed against certain of our social casino games, including Jackpot Party Casino. The plaintiff alleges substantially the same causes of action against our social casino games that are alleged with respect to Big Fish Casino, including the allegation that our social casino games violate Washington State gambling laws. In December 2018, the federal district court assigned to the litigation denied Scientific Games Corporation's motion to dismiss the plaintiff's complaint. In January 2019, Scientific Games Corporation filed its answer and affirmative defenses to the putative class action complaint. See "Business—Legal Proceedings." We may incur significant expense defending this lawsuit or any other lawsuit to which we may be a party. Although the case was brought against Scientific Games Corporation, pursuant to the Intercompany Services Agreement, we would expect to cover or contribute to any damage awards due to the matter arising as a result of our business. If the plaintiff were to obtain a judgment in her favor in this lawsuit, then our results in Washington could be negatively impacted, and we could be restricted from operating social casino games in Washington. Additional legal proceedings targeting our social casino games and claiming violations of state or federal laws also could occur, based on the unique and particular laws of each jurisdiction. We cannot predict the likelihood, timing or scope of the consequences of such an outcome, or the outcome of any other legal proceedings to which we may be a party, any of which could have a material adverse effect on our results of operations, cash flows or financial condition.

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Our insurance may not provide adequate levels of coverage against claims.

              We believe that we maintain insurance customary for businesses of our size and type. However, there are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure. Moreover, any loss incurred could exceed policy limits and policy payments made to us may not be made on a timely basis. Such losses could adversely affect our business prospects, results of operations, cash flows and financial condition.

Risks Related to Our Relationship with Scientific Games

Scientific Games controls the direction of our business, and the concentrated ownership of our common stock will prevent you and other stockholders from influencing significant decisions.

              Following the completion of this offering, Scientific Games will, through its indirect wholly owned subsidiaries, the SG Members, continue to control shares representing a majority of our combined voting power. Immediately after this offering, the SG Members will own all of our outstanding Class B common stock, which will represent approximately 82.6% of our total outstanding shares of common stock and approximately 97.9% of the combined voting power of both classes of our outstanding common stock. On all matters submitted to a vote of our stockholders, our Class B common stock entitles its owners to ten votes per share (for so long as the number of shares of our common stock beneficially owned by the SG Members and their affiliates represents at least 10% of our outstanding shares of common stock and, thereafter, one vote per share), and our Class A common stock, which is the stock we are offering in this offering, entitles its owners to one vote per share. As long as Scientific Games continues to control shares representing a majority of our combined voting power, it will generally be able to determine the outcome of all corporate actions requiring stockholder approval, including the election of directors (unless supermajority approval of such matter is required by applicable law). Even if Scientific Games were to control less than a majority of our combined voting power, it may be able to influence the outcome of corporate actions so long as it owns a significant portion of our combined voting power. If Scientific Games does not cause the SG Members to dispose of their shares of our common stock, Scientific Games could retain control over us for an extended period of time or indefinitely.

              Investors in this offering will not be able to affect the outcome of any stockholder vote while Scientific Games controls the majority of our combined voting power (or, in the case of removal of directors, two-thirds of our combined voting power). Due to its ownership and rights under our articles of incorporation and our bylaws, Scientific Games will be able to control, indirectly through the SG Members and subject to applicable law (see "Certain Relationships and Related Party Transactions—Policies and Procedures for Related Person Transactions"), the composition of our board of directors, which in turn will be able to control all matters affecting us, including, among other things:

    any determination with respect to our business direction and policies, including the appointment and removal of officers and, in the event of a vacancy on our board of directors, additional or replacement directors;

    any determinations with respect to mergers, business combinations or disposition of assets;

    determination of our management policies;

    determination of the composition of the committees on our board of directors;

    our financing policy;

    our compensation and benefit programs and other human resources policy decisions;

    termination of, changes to or determinations under our agreements with Scientific Games;

    changes to any other agreements that may adversely affect us;

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    the payment of dividends on our Class A common stock; and

    determinations with respect to our tax returns.

See "Description of Capital Stock."

              Because Scientific Games' interests may differ from ours or from those of our other stockholders, actions that Scientific Games takes with respect to us, as our controlling stockholder, may not be favorable to us or our other stockholders.

If Scientific Games causes the SG Members to sell a controlling interest in our company to a third party in a private transaction, you may not realize any change-of-control premium on shares of our Class A common stock, and we may become subject to the control of a presently unknown third party.

              Following the completion of this offering, Scientific Games will, through its indirect wholly owned subsidiaries, the SG Members, continue to hold approximately 97.9% of our combined voting power. Scientific Games will have the ability, should it choose to do so, to cause the SG Members to sell some or all of their shares of our common stock and the LLC Interests the SG Members hold in a privately negotiated transaction, which, if sufficient in size, could result in a change of control of our company.

              The ability of Scientific Games to cause the SG Members to privately sell their shares of our common stock and the LLC Interests the SG Members hold, with no requirement for a concurrent offer to be made to acquire all of our shares that will be publicly traded hereafter, could prevent you from realizing any change-of-control premium on your shares of our common stock that may otherwise accrue to Scientific Games on its private sale of our common stock and the LLC Interests it holds. Additionally, if Scientific Games causes the SG Members to privately sell shares representing a significant portion of our common stock, we may become subject to the control of a presently unknown third party. Such third party may have conflicts of interest with those of other stockholders. In addition, if Scientific Games causes the SG Members to sell a controlling interest in our company to a third party, any debt financing (including the Revolver) we secure in the future may be subject to acceleration, Scientific Games may terminate the Intercompany Services Agreement, the IP License Agreement and other arrangements, and our other relationships and agreements, including our license agreements, could be impacted, all of which may adversely affect our ability to run our business as described herein and may have a material adverse effect on our results of operations, cash flows and financial condition.

Scientific Games' interests may conflict with our interests and the interests of our stockholders. Conflicts of interest between Scientific Games and us could be resolved in a manner unfavorable to us and our public stockholders.

              Various conflicts of interest between us and Scientific Games could arise. Ownership interests of directors or officers of Scientific Games in our common stock and ownership interests of our directors and officers in the stock of Scientific Games, or a person's service either as a director or officer of both companies, could create or appear to create potential conflicts of interest when those directors and officers are faced with decisions relating to our company. These decisions could include:

    corporate opportunities;

    the impact that operating decisions for our business may have on Scientific Games' consolidated financial statements;

    differences in tax positions between Scientific Games and us, especially in light of the TRA (see "Risks Related to Our Organizational Structure and the Tax Receivable Agreement");

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    the impact that operating or capital decisions (including the incurrence of indebtedness) for our business may have on Scientific Games' current or future indebtedness or the covenants under that indebtedness;

    future, potential commercial arrangements between Scientific Games and us or between Scientific Games and third parties;

    business combinations involving us;

    our dividend policy;

    management stock ownership; and

    the intercompany agreements between Scientific Games and us.

              Furthermore, disputes may arise between Scientific Games and us relating to our past and ongoing relationship and these potential conflicts of interest may make it more difficult for us to favorably resolve such disputes, including those related to:

    tax, employee benefits, indemnification and other matters arising from this offering;

    the nature, quality and pricing of services Scientific Games agrees to provide to us;

    sales or other disposals by the SG Members of all or a portion of their ownership interests in SciPlay Parent LLC or us; and

    business combinations involving us.

              We may not be able to resolve any potential conflicts, and even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated party. While we are controlled by Scientific Games, we may not have the leverage to negotiate amendments to our agreements with Scientific Games, if required, on terms as favorable to us as those we would negotiate with an unaffiliated third party.

Certain of our directors may have actual or potential conflicts of interest because of their positions with Scientific Games or MacAndrews & Forbes Incorporated.

              Following this offering, Barry L. Cottle, Frances F. Townsend and M. Mendel Pinson will serve on our board of directors and will retain their positions with Scientific Games or MacAndrews & Forbes Incorporated, or MacAndrews & Forbes, as applicable. In addition, such individuals may own Scientific Games common stock, options to purchase Scientific Games common stock or other Scientific Games equity awards. These individuals' holdings of Scientific Games' common stock, options to purchase Scientific Games common stock or other equity awards may be significant for some of these persons compared to these persons' total assets. Their positions at Scientific Games or at MacAndrews & Forbes, as applicable, and the ownership of any Scientific Games equity or equity awards creates, or may create the appearance of, conflicts of interest when these individuals are faced with decisions that could have different implications for Scientific Games or MacAndrews & Forbes than the decisions have for us.

Our articles of incorporation will limit Scientific Games' and its directors' and officers' liability to us or you for breach of fiduciary duty and could also prevent us from benefiting from corporate opportunities that might otherwise have been available to us.

              Our articles of incorporation will provide that, subject to any contractual provision to the contrary, Scientific Games will have no obligation to refrain from:

    engaging in the same or similar business activities or lines of business as we do;

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    doing business with any of our clients, consumers, vendors or lessors;

    employing or otherwise engaging any of our officers or employees; or

    making investments in any property in which we may make investments.

              Under our articles of incorporation, neither Scientific Games nor any officer or director of Scientific Games, except as provided in our articles of incorporation, will be liable to us or to our stockholders for breach of any fiduciary duty by reason of any of these activities.

              Additionally, our articles of incorporation will include a "corporate opportunity" provision in which we renounce any interests or expectancy in corporate opportunities which become known to (i) any of our directors or officers who are also directors, officers, employees or other affiliates of Scientific Games or its affiliates (except that we and our subsidiaries shall not be deemed affiliates of Scientific Games or its affiliates for the purposes of the provision), or dual persons, or (ii) Scientific Games itself, and which relate to the business of Scientific Games or may constitute a corporate opportunity for both Scientific Games and us. Generally, neither Scientific Games nor our directors or officers who are also dual persons will be liable to us or our stockholders for breach of any fiduciary duty by reason of the fact that any such person pursues or acquires any corporate opportunity for the account of Scientific Games or its affiliates, directs, recommends, sells, assigns or otherwise transfers such corporate opportunity to Scientific Games or its affiliates, or does not communicate information regarding such corporate opportunity to us. The corporate opportunity provision may exacerbate conflicts of interest between Scientific Games and us because the provision effectively permits one of our directors or officers who also serves as a director, officer, employee or other affiliate of Scientific Games to choose to direct a corporate opportunity to Scientific Games instead of us.

              Scientific Games will not be restricted from competing with us in the social gaming business, including as a result of acquiring a company that operates a social gaming business. Due to the significant resources of Scientific Games, including its intellectual property (all of which Scientific Games will retain and certain of which it will license to us under the IP License Agreement), financial resources, name recognition and know-how resulting from the previous management of our business, Scientific Games could have a significant competitive advantage over us should it decide to utilize these resources to engage in the type of business we conduct, which may cause our operating results and financial condition to be materially adversely affected.

Third parties may seek to hold us responsible for liabilities of Scientific Games, which could result in a decrease in our income.

              Third parties may seek to hold us responsible for Scientific Games' liabilities. If those liabilities are significant and we are ultimately held liable for them, we cannot assure that we will be able to recover the full amount of our losses from Scientific Games.

We will be a "controlled company" within the meaning of the NASDAQ rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements.

              Upon completion of this offering, Scientific Games will continue to control a majority of our combined voting power. As a result, we will be a "controlled company" within the meaning of the corporate governance standards of the NASDAQ rules. Under these rules, a listed company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including:

    the requirement that a majority of its board of directors consist of independent directors;

    the requirement that its director nominations be made, or recommended to the full board of directors, by its independent directors or by a nominations committee that is comprised

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      entirely of independent directors and that it adopt a written charter or board resolution addressing the nominations process; and

    the requirement that it have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities.

              Following this offering, we intend to rely on the exemption relating to the composition of our compensation committee. As a result, our compensation committee will not consist entirely of independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NASDAQ rules. We may choose to rely on additional exemptions in the future so long as we qualify as a "controlled company."

MacAndrews & Forbes exerts significant influence over Scientific Games and may make decisions that conflict with the interests of other stockholders.

              As disclosed in a Form 4 filed with the SEC on December 31, 2018, MacAndrews & Forbes beneficially owned 36,050,736 shares of Scientific Games' then outstanding common stock, or approximately 39.1% of its outstanding common stock as of February 22, 2019. Pursuant to a stockholders' agreement with Scientific Games, MacAndrews & Forbes is entitled to appoint up to four members of the board of directors of Scientific Games and certain actions of Scientific Games require the approval of MacAndrews & Forbes. As a result, MacAndrews & Forbes has the ability to exert significant influence over Scientific Games' business, and in turn our business, and may make decisions with which other stockholders of Scientific Games may disagree, including, among other things, delaying, discouraging or preventing a change of control of Scientific Games or a potential merger, consolidation, tender offer, takeover or other business combination involving Scientific Games or us.

We may not achieve some or all of the anticipated benefits of being a standalone public company.

              We may not be able to achieve all of the anticipated strategic and financial benefits expected as a result of being a standalone public company, or such benefits may be delayed or not occur at all. These anticipated benefits include the following:

    allowing investors to evaluate the distinct merits, performance and future prospects of our business, independent of Scientific Games' other businesses;

    improving our strategic and operational flexibility and increasing management focus as we continue to implement our strategic plan and allowing us to respond more effectively to different player needs and the competitive environment for our business;

    allowing us to adopt a capital structure better suited to our financial profile and business needs, without competing for capital with Scientific Games' other businesses;

    creating an independent equity structure that will facilitate our ability to effect future acquisitions utilizing our capital stock; and

    facilitating incentive compensation arrangements for employees more directly tied to the performance of our business, and enhancing employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives of our business.

              We may not achieve the anticipated benefits of being a standalone public company for a variety of reasons, and it could adversely affect our operating results and financial condition.

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We rely on our access to Scientific Games' brands and reputation, some of Scientific Games' relationships, and the brands and reputations of unaffiliated third parties.

              We believe the association with Scientific Games has contributed to our building relationships with our players due to its recognized brands and products, as well as resources such as Scientific Games' intellectual property and access to third parties' intellectual property. Any perceived loss of Scientific Games' scale, capital base and financial strength as a result of this offering, or any actual loss in the future, may prompt business partners to reprice, modify or terminate their relationships with us. In addition, Scientific Games' reduction of its ownership of our company may cause some of our existing agreements and licenses to be terminated. We cannot predict with certainty the effect that this offering will have on our business.

              For more detail regarding our reliance on access to intellectual property owned by Scientific Games, see "—We rely on the ability to use the intellectual property rights of Scientific Games and other third parties, including the third-party intellectual property rights licensed to Scientific Games that we have enjoyed as an indirect subsidiary of Scientific Games, and we may lose the benefit of any intellectual property owned by or licensed to Scientific Games if it ceases to hold certain minimum percentages of the voting power in our company."

              In addition, we believe that the success of certain of our games depends on the popularity of intellectual property or brands of third parties that are incorporated into their player experience. For example, the success of our MONOPOLY Slots game is based in part on the strength of the MONOPOLY brand, which is owned and managed by unaffiliated third parties. We cannot assure the continued popularity of any of the intellectual property or brands that are incorporated into our games, and a loss of such popularity may result in decreased interest in our games.

The services that we receive from Scientific Games may not be sufficient for us to operate our business, and we would likely incur significant incremental costs if we lost access to Scientific Games' services.

              Because we have not operated as an independent company, we have obtained, and will need to continue to obtain, services from Scientific Games relating to many important corporate functions under an intercompany services agreement. Our financial statements reflect charges for these services based on the intercompany services agreement we entered into in September 2016. Following this offering, many of these services will be governed by a revised Intercompany Services Agreement with Scientific Games. Under the Intercompany Services Agreement, we will be able to continue to use these Scientific Games services for a fixed term established on a service-by-service basis. We generally will have the right to terminate a service before its stated termination date if we give notice to Scientific Games. Partial reduction in the provision of any service will require Scientific Games' consent. In addition, either party will be able to terminate the Intercompany Services Agreement due to a material breach of the other party, upon prior written notice, subject to limited cure periods. We will pay Scientific Games mutually agreed-upon fees for these services, which will be based on Scientific Games' costs of providing the services.

              If we lost access to the services provided to us by Scientific Games under the Intercompany Services Agreement, we would need to replicate or replace certain functions, systems and infrastructure. We may also need to make investments or hire additional employees to operate without the same access to Scientific Games' existing operational and administrative infrastructure. These initiatives may be costly to implement. Due to the scope and complexity of the underlying projects relative to these efforts, the amount of total costs could be materially higher than our estimate, and the timing of the incurrence of these costs could be subject to change.

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              We may not be able to replace these services or enter into appropriate third-party agreements on terms and conditions, including cost, comparable to those that we have received in the past and will continue to receive from Scientific Games under the Intercompany Services Agreement. Additionally, if the Intercompany Services Agreement is terminated, we may be unable to sustain the services at the same levels or obtain the same benefits as when we were receiving such services and benefits from Scientific Games. If we have to operate these functions separately, if we do not have our own adequate systems and business functions in place or if we are unable to obtain them from other providers, we may not be able to operate our business effectively or at comparable costs, and our profitability may decline. In addition, we have historically received informal support from Scientific Games, which may not be addressed in our Intercompany Services Agreement. The level of this informal support could diminish or be eliminated following this offering.

              While we are controlled by Scientific Games, we may not have the leverage to negotiate amendments to our agreements with Scientific Games, if required, on terms as favorable to us as those we would negotiate with an unaffiliated third party.

Our historical financial results and pro forma financial information are not necessarily representative of the results we would have achieved as a standalone company and may not be a reliable indicator of our future results.

              Our historical financial results included in this prospectus do not reflect the financial condition, results of operations or cash flows we would have achieved as a standalone company during the periods presented or those we will achieve in the future. This is primarily the result of the following factors:

    our historical financial results reflect charges for certain support functions that are provided on a centralized basis within Scientific Games, such as expenses for business technology, facilities, legal, finance, human resources, business development, public affairs and procurement under a prior intercompany services agreement, and we will enter into a new Intercompany Services Agreement in connection with this offering;

    our historical financial results reflect charges for the use of certain proprietary and third-party intellectual property licensed or sublicensed from Scientific Games under a prior intercompany intellectual property license agreement, and we will enter into a new IP License Agreement in connection with this offering;

    our cost of potential future debt and our capital structure will be different from that reflected in our historical financial statements;

    we will incur additional ongoing costs as a result of this offering, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act; and

    this offering may have a material effect on our relationship with our players and our other business relationships, including supplier relationships.

              Our financial condition and future results of operations could be materially different from amounts reflected in our historical financial statements included elsewhere in this prospectus, so it may be difficult for investors to compare our future results to historical results or to evaluate our relative performance or trends in our business.

              Similarly, the pro forma financial information included in this prospectus includes adjustments based upon available information we believe to be reasonable. However, the assumptions may change and actual results may differ. In addition, we have not made pro forma adjustments to reflect changes that will occur in our cost structure, funding and operations as a result of our transition to becoming a public company, including any changes that may occur in our employee base, potential increased costs

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associated with reduced economies of scale and increased costs associated with being a publicly traded, standalone company.

We may have received better terms from unaffiliated third parties than the terms we will receive in our agreements with Scientific Games.

              The agreements that we will enter into with Scientific Games in connection with this offering, including the Intercompany Services Agreement, the IP License Agreement and the TRA, will have been prepared while we were still a wholly owned subsidiary of Scientific Games. While the covenants in Scientific Games' debt agreements require that those agreements be on terms that are not materially less favorable to Scientific Games than those that might reasonably have been obtained in comparable transaction at such time on an arm's-length basis from a party that is not its affiliate, the terms of those agreements may not reflect terms that would have resulted if we had negotiated such terms with an unaffiliated third party.

Risks Related to Our Organizational Structure and the Tax Receivable Agreement

Our sole material asset after the completion of this offering will be our interest in SciPlay Parent LLC, and, accordingly, we will depend on distributions from SciPlay Parent LLC to pay our taxes and expenses, including payments under the Tax Receivable Agreement. SciPlay Parent LLC's ability to make such distributions may be subject to various limitations and restrictions.

              Upon the consummation of this offering, we will be a holding company and will have no material assets other than our ownership of LLC Interests of SciPlay Parent LLC. As such, we will have no independent means of generating revenue or cash flow, and our ability to pay our taxes and operating expenses or declare and pay dividends in the future, if any, will be dependent upon the financial results and cash flows of SciPlay Parent LLC and its subsidiaries and distributions we receive from SciPlay Parent LLC. We cannot assure that our subsidiaries will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions will permit such distributions.

              SciPlay Parent LLC will be treated as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated to holders of LLC Interests, including us. Accordingly, we will incur income taxes on our allocable share of any net taxable income of SciPlay Parent LLC. Under the terms of the SciPlay Parent LLC Agreement, SciPlay Parent LLC will be obligated to make tax distributions to holders of LLC Interests, including us. In addition to tax expenses, we will also incur expenses related to our operations, including payments under the TRA, which we expect will be substantial. See "Certain Relationships and Related Party Transactions—The Transactions—Tax Receivable Agreement." We intend, as its sole manager, to cause SciPlay Parent LLC to make cash distributions to the owners of LLC Interests in an amount sufficient to (i) fund all or part of such members' tax obligations in respect of taxable income allocated to such members and (ii) cover our operating expenses, including ordinary course payments under the TRA. However, SciPlay Parent LLC's ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which SciPlay Parent LLC is then a party, or any applicable law, or that would have the effect of rendering SciPlay Parent LLC insolvent. Moreover, the terms governing the Revolver generally will not permit SciPlay Parent LLC, as a guarantor of the Revolver, to make distributions sufficient to allow us to make early termination payments under the TRA. If we do not have sufficient funds to pay tax or other liabilities or to fund our operations, we may have to borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. To the extent that we are unable to make payments under the TRA for any reason, the unpaid amounts will accrue interest until paid. Our failure to make any payment required under the TRA (including any accrued and unpaid interest)

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within 30 calendar days of the date on which the payment is required to be made will constitute a material breach of a material obligation under the TRA, which will terminate the TRA and accelerate future payments thereunder, unless the applicable payment is not made because (i) we are prohibited from making such payment under the terms of the TRA or the terms governing certain of our secured indebtedness or (ii) we do not have, and cannot use commercially reasonable efforts to obtain, sufficient funds to make such payment. Any late payments will continue to accrue interest at one-month LIBOR plus 500 basis points until such payments are made. It will also constitute a material breach of a material obligation under the TRA if we make a distribution of cash or other property (other than shares of our Class A common stock) to our stockholders or use cash or other property to repurchase any of our capital stock (including our Class A common stock), in each case while any outstanding payments under the TRA are unpaid. See "Certain Relationships and Related Party Transactions—The Transactions—Tax Receivable Agreement" and "Certain Relationships and Related Party Transactions—The Transactions—SciPlay Parent LLC Agreement—Distributions." In addition, if SciPlay Parent LLC does not have sufficient funds to make distributions, our ability to declare and pay cash dividends will also be restricted or impaired. See "—Risks Related to Ownership of Our Class A Common Stock" and "Dividend Policy."

The Tax Receivable Agreement with the SG Members requires us to make cash payments to the SG Members in respect of certain tax benefits to which we may become entitled, and we expect that the payments we will be required to make will be substantial.

              Upon the closing of this offering, we will be a party to the TRA with the SG Members and SciPlay Parent LLC. Under the TRA, we will be required to make cash payments to the SG Members equal to 85% of the tax benefits, if any, that we actually realize, or in certain circumstances are deemed to realize, as a result of (1) the increases in the tax basis of assets of SciPlay Parent LLC (a) in connection with this offering, including as a result of the Upfront License Payment, or (b) resulting from any redemptions or exchanges of LLC Interests by the SG Members pursuant to the SciPlay Parent LLC Agreement or (c) resulting from certain distributions (or deemed distributions) by SciPlay Parent LLC and (2) certain other tax benefits related to our making of payments under the TRA. We expect that the amount of the cash payments that we will be required to make under the TRA will be substantial. Any payments made by us to the SG Members under the TRA will generally reduce the amount of cash that might have otherwise been available to us. In addition, we are obligated to use commercially reasonable efforts to avoid entering into any agreements that could be reasonably anticipated to materially delay the timing of the making of any payments under the TRA, which could limit our ability to pursue strategic transactions. Furthermore, our future obligations to make payments under the TRA could make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that are the subject of the TRA. For more information, see "Certain Relationships and Related Party Transactions—The Transactions—Tax Receivable Agreement." Assuming no material changes in the relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the TRA, we expect that the tax savings associated with the purchase of LLC Interests in connection with this offering, together with future redemptions or exchanges of all remaining LLC Interests not owned by SciPlay pursuant to the SciPlay Parent LLC Agreement as described above, would aggregate to approximately $484.1 million over 20 years from the date of this offering based on the assumed initial public offering price of $15.00 per share of our Class A common stock, which is the midpoint of the range set forth on the cover page of this prospectus, and assuming all future redemptions or exchanges would occur one year after this offering. Under such scenario, assuming future payments are made on the date each relevant tax return is due, without extensions, we would be required to pay approximately 85% of such amount, or approximately $411.5 million, over the 20-year period from the date of this offering. Payments under the TRA are not conditioned on the SG Members' continued ownership of LLC Interests or our Class A common stock or Class B common stock after this offering.

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              The actual amount and timing of any payments under the TRA will vary depending upon a number of factors, including the timing of redemptions or exchanges by the SG Members, the amount of gain recognized by the SG Members, the amount and timing of the taxable income we generate in the future, and the tax rates and laws then applicable.

In certain cases, future payments under the Tax Receivable Agreement to the SG Members may be accelerated or significantly exceed the actual benefits we realize in respect of the tax attributes subject to the Tax Receivable Agreement.

              The TRA provides that if (i) we materially breach any of our material obligations under the TRA, including if we make any distribution of cash or property (other than shares of our Class A common stock) to our stockholders or any repurchase of our capital stock (including our Class A common stock) before all our payment obligations under the TRA have been satisfied for all prior taxable years, (ii) certain mergers, asset sales, other forms of business combination or other changes of control (including under certain material indebtedness of SciPlay Parent LLC or its subsidiaries) were to occur, or (iii) we elect an early termination of the TRA, then our future obligations, or our successor's future obligations, under the TRA to make payments thereunder would accelerate and become due and payable, based on certain assumptions, including an assumption that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the TRA, and an assumption that, as of the effective date of the acceleration, any SG Member that has LLC Interests not yet exchanged shall be deemed to have exchanged such LLC Interests on such date, even if we do not receive the corresponding tax benefits until a later date when the LLC Interests are actually exchanged.

              As a result of the foregoing, we would be required to make an immediate cash payment equal to the estimated present value of the anticipated future tax benefits that are the subject of the TRA, which payment may be made significantly in advance of the actual realization, if any, of those future tax benefits and, therefore, we could be required to make payments under the TRA that are greater than the specified percentage of the actual tax benefits we ultimately realize. In addition, to the extent that we are unable to make payments under the TRA for any reason, the unpaid amounts will accrue interest until paid. Our failure to make any payment required under the TRA (including any accrued and unpaid interest) within 30 calendar days of the date on which the payment is required to be made will constitute a material breach of a material obligation under the TRA, which will terminate the TRA and accelerate future payments thereunder, unless the applicable payment is not made because (i) we are prohibited from making such payment under the terms of the TRA or the terms governing certain of our secured indebtedness or (ii) we do not have, and cannot use commercially reasonable efforts to obtain, sufficient funds to make such payment. In these situations, our obligations under the TRA could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. We cannot assure that we will be able to fund or finance our obligations under the TRA. If we were to elect to terminate the TRA immediately after this offering (including the use of proceeds to us therefrom), based on the initial public offering price of $15.00 per share of our Class A common stock, which is the midpoint of the range set forth on the cover page of this prospectus, we estimate that we would be required to pay approximately $315.7 million in the aggregate under the TRA.

We will not be reimbursed for any payments made to the SG Members under the Tax Receivable Agreement in the event that any tax benefits are disallowed.

              Payments under the TRA will be based on the tax reporting positions that we determine, and the IRS or another tax authority may challenge all or part of the tax basis increases, as well as other related tax positions we take, and a court could sustain any such challenge. Our ability to settle or to

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forgo contesting such challenges may be restricted by the rights of the SG Members pursuant to the TRA, and such restrictions apply for as long as the TRA remains in effect. In addition, we will not be reimbursed for any cash payments previously made to the SG Members under the TRA in the event that any tax benefits initially claimed by us and for which payment has been made to the SG Members are subsequently challenged by a taxing authority and are ultimately disallowed. Instead, any excess cash payments made by us to the SG Members will be netted against any future cash payments that we might otherwise be required to make to the SG Members under the terms of the TRA. However, we might not determine that we have effectively made an excess cash payment to the SG Members for a number of years following the initial time of such payment. As a result, payments could be made under the TRA in excess of the tax savings that we realize in respect of the tax attributes with respect to the SG Members that are the subject of the TRA.

If we were deemed to be an investment company under the Investment Company Act of 1940 as a result of our ownership of SciPlay Parent LLC, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

              Under Sections 3(a)(1)(A) and (C) of the Investment Company Act of 1940, as amended, or the 1940 Act, a company generally will be deemed to be an "investment company" for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an "investment company," as such term is defined in either of those sections of the 1940 Act.

              As the sole manager of SciPlay Parent LLC, we will control SciPlay Parent LLC. On that basis, we believe that our interest in SciPlay Parent LLC is not an "investment security" as that term is used in the 1940 Act. However, if we were to cease participation in the management of SciPlay Parent LLC, our interest in SciPlay Parent LLC could be deemed an "investment security" for purposes of the 1940 Act.

              We and SciPlay Parent LLC intend to conduct our operations so that we will not be deemed an investment company. However, if we were to be deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

Risks Related to This Offering and Ownership of Our Class A Common Stock

We are an "emerging growth company," and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.

              We are an "emerging growth company," as defined in the JOBS Act, and we could be an emerging growth company for up to five years following the completion of this offering. For as long as we continue to be an emerging growth company, we may choose to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies, including, but not limited to: (i) not being required to comply with the auditor attestation requirements of Section 404, (ii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. In addition, as an emerging growth company, we are only required to provide two years of audited financial statements and two years of selected financial data in this prospectus. We currently intend to take advantage of each of the reduced reporting requirements and exemptions

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described above. We cannot predict if investors will find our shares less attractive as a result of our taking advantage of these exemptions. If some investors find our shares less attractive as a result, there may be a less active trading market for our shares and our stock price may be more volatile.

The dual class structure of our common stock may adversely affect the trading price or liquidity of our Class A common stock.

              On matters submitted to a vote of our stockholders, our Class B common stock has ten votes per share (for so long as the number of shares of our common stock beneficially owned by the SG Members and their affiliates represents at least 10% of our outstanding shares of common stock and, thereafter, one vote per share) and our Class A common stock, which is the stock we are offering in this offering, has one vote per share. These differences in voting rights may adversely affect the market price of our Class A common stock to the extent that any current or future investor in our common stock ascribes value to the voting rights associated with the Class B common stock. The existence of dual classes of our common stock could result in less liquidity for any such class than if there were only one class of our capital stock.

              In addition, S&P Dow Jones and FTSE Russell have recently announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices that will exclude companies with multiple classes of shares of common stock from being added to such indices. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class structure of our common stock may prevent the inclusion of our Class A common stock in such indices and may cause shareholder advisory firms to publish negative commentary about our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less active trading market for our Class A common stock. Any actions or publications by shareholder advisory firms critical of our corporate governance practices or capital structure could also adversely affect the value of our Class A common stock.

The requirements of being a public company require significant resources and management attention and affect our ability to attract and retain executive management and qualified board members.

              As a public company following this offering, we will incur legal, accounting and other expenses that we did not previously incur. We will be subject to the Exchange Act, including the reporting requirements thereunder, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the NASDAQ rules and other applicable securities rules and regulations. Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an "emerging growth company." Further, we expect that these rules and regulations may make it more difficult and more expensive for us to obtain directors' and officers' liability insurance, which could make it more difficult for us to attract and retain qualified members of our board of directors.

              Pursuant to Section 404, once we are no longer an emerging growth company, we may be required to furnish an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. When our independent registered public accounting firm is required to undertake an assessment of our internal control over financial reporting, the cost of complying with Section 404 will significantly increase, and management's attention may be diverted from other business concerns, which could adversely affect our business and results of operations. We may need to hire more employees in the future or engage outside consultants to comply with the requirements of Section 404, which will further increase our cost and expense. In addition, enhanced legal and regulatory regimes and heightened standards relating to corporate governance and disclosure

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for public companies result in increased legal and financial compliance costs and make some activities more time-consuming.

If we fail to put in place appropriate and effective internal control over financial reporting and disclosure controls and procedures, we may suffer harm to our reputation and investor confidence level.

              If we fail to implement the requirements of Section 404(b) in the required timeframe once we are no longer an emerging growth company, we may be subject to sanctions or investigations by regulatory authorities, including the SEC and the NASDAQ. Furthermore, if we are unable to conclude that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of shares of our Class A common stock could decline, and we could be subject to sanctions or investigations by regulatory authorities. Failure to implement or maintain effective internal control over financial reporting and disclosure controls and procedures required of public companies could also restrict our future access to the capital markets.

An active trading market for our Class A common stock may not develop or be sustained.

              Prior to the completion of this offering, there has been no public market for our Class A common stock. An active trading market for shares of our Class A common stock may never develop or be sustained following this offering. If an active trading market does not develop or is not sustained, you may have difficulty selling your shares of Class A common stock at an attractive price, or at all. An inactive market may also impair our ability to raise capital by selling our Class A common stock, and it may impair our ability to attract and motivate our employees through equity incentive awards and our ability to acquire other companies, products or technologies by using our Class A common stock as consideration.

The price of our Class A common stock may fluctuate substantially.

              The price for our Class A common stock in this offering will be determined by negotiations among Scientific Games, us and representatives of the underwriters, and it may not be indicative of prices that will prevail in the open market following this offering. You may not be able to sell your Class A common stock at or above the initial public offering price or at any other price or at the time that you would like to sell. You should consider an investment in our Class A common stock to be risky, and you should invest in our Class A common stock only if you can withstand a total loss and wide fluctuations in the market value of your investment. Some factors that may cause the market price of our Class A common stock to fluctuate, in addition to the other risks mentioned in this section of the prospectus, are:

    actual or anticipated fluctuations in our financial condition and operating results;

    our failure to develop and market new games;

    actual or anticipated changes in our growth rate relative to our competitors;

    competition from existing games or new games that may emerge;

    announcements by us, Scientific Games, our collaborators or our competitors of significant acquisitions, strategic partnerships, joint ventures, strategic alliances, or capital commitments;

    failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public;

    issuance of new or updated research or reports by securities analysts;

    fluctuations in the valuation of companies perceived by investors to be comparable to us;

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    Class A common stock price and volume fluctuations attributable to inconsistent trading volume levels of our Class A common stock;

    additions or departures of key personnel;

    disputes or other developments related to proprietary rights;

    announcement or expectation of additional equity or debt financing efforts;

    equity sales by us, Scientific Games, our insiders or our other stockholders;

    announcements or actions taken by Scientific Games as our principal stockholder; and

    general economic and market conditions.

              These and other market and industry factors may cause the market price and demand for our Class A common stock to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from readily selling their Class A common stock and may otherwise negatively affect the liquidity of our Class A common stock. In addition, the stock market has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.

If you purchase Class A common stock in this offering, you will experience substantial and immediate dilution.

              If you purchase Class A common stock in this offering, you will experience substantial and immediate dilution of $14.77 per share in the net tangible book value of your shares after giving effect to the offering at an assumed initial public offering price of $15.00 per share (the midpoint of the price range on the cover of this prospectus) because the price that you pay will be substantially greater than the net tangible book value per share that you acquire. For a further description of the dilution that you will experience immediately after this offering, see the section of this prospectus titled "Dilution."

Immediately following the completion of this offering, the SG Members will have the right to have their LLC Interests redeemed or exchanged into shares of Class A common stock, which, if exercised, will dilute your economic interest in SciPlay.

              After this offering, we will have an aggregate of 603,000,000 shares of Class A common stock authorized but unissued, including 104,400,000 shares of Class A common stock issuable upon redemption or exchange of LLC Interests that will be held by the SG Members. SciPlay Parent LLC will enter into the SciPlay Parent LLC Agreement and, subject to certain restrictions set forth therein and as described elsewhere in this prospectus, the SG Members will be entitled to have their LLC Interests redeemed or exchanged for shares of our Class A common stock or, at our option, cash. Shares of our Class B common stock will be cancelled on a one-for-one basis whenever the SG Members' LLC Interests are so redeemed or exchanged. While any redemption or exchange of LLC Interests and corresponding cancellation of our Class B common stock will reduce the SG Members' economic interest in SciPlay Parent LLC and its voting interest in us, the related issuance of our Class A common stock will dilute your economic interest in SciPlay. We cannot predict the timing or size of any future issuances of our Class A common stock resulting from the redemption or exchange of LLC Interests.

Future issuances or resales of Class A common stock by the SG Members or others, or the perception that such issuances or resales may occur, could cause the market price of our Class A common shares to decline.

              In connection with this offering, we intend to enter into a Registration Rights Agreement with the SG Members, pursuant to which the shares of Class A common stock issued to the SG Members

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upon redemption or exchange of LLC Interests will be eligible for resale, subject to certain limitations set forth therein. See "Certain Relationships and Related Party Transactions—The Transactions—Registration Rights Agreement." Following this offering, we also intend to file one or more registration statements with the SEC covering shares of our Class A common stock available for future issuance under our equity incentive plans. Upon effectiveness of such registration statements, any shares subsequently issued under such plans will be eligible for sale in the public market, except to the extent that they are restricted by lock-up agreements and subject to compliance with Rule 144 in the case of our affiliates.

              We cannot predict the size of future issuances of our Class A common stock or the effect, if any, that future issuances and sales of shares of our Class A common stock, including upon the redemption or exchange of LLC Interests, may have on the market price of our Class A common stock. Sales or distributions of substantial amounts of our Class A common stock, including shares issued in connection with an acquisition, or the perception that such sales or distributions could occur, may cause the market price of our Class A common stock to decline.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, the price of our Class A common stock and trading volume could decline.

              The trading market for our Class A common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. If few or no securities or industry analysts cover us, the trading price for our Class A common stock would be negatively impacted. If one or more of the analysts who covers us downgrades our Class A common stock, publishes incorrect or unfavorable research about our business, ceases coverage of our company or fails to publish reports on us regularly, demand for our Class A common stock could decrease, which could cause the price of our Class A common stock or trading volume to decline.

We do not currently intend to pay dividends on our Class A common stock.

              We do not intend to pay any dividends to holders of our Class A common stock for the foreseeable future. We currently intend to invest our future earnings, if any, to fund our growth. Any determination to pay dividends in the future will be at the discretion of our board of directors and subject to limitations under applicable law. Therefore, you are not likely to receive any dividends on your Class A common stock for the foreseeable future, and the success of an investment in our Class A common stock will depend upon any future appreciation in its value. Moreover, any ability to pay dividends will be restricted by the terms of the Revolver, and may also be restricted by the terms of any future credit agreement or any future debt or preferred equity securities of us or our subsidiaries. Consequently, investors may need to sell all or part of their holdings of our Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. There is no guarantee that our Class A common stock will appreciate in value or even maintain the price at which our stockholders have purchased our Class A common stock. Investors seeking cash dividends should not purchase our Class A common stock.

Provisions in our articles of incorporation, bylaws and Nevada law may prevent or delay an acquisition of us, which could decrease the trading price of our Class A common stock.

              Our articles of incorporation and bylaws will contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids and to encourage prospective acquirers to negotiate with our board of directors rather than to attempt an unsolicited bid to acquire our company. These provisions include:

    rules regarding how our stockholders may present proposals or nominate directors for election at stockholder meetings;

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    empowering only the board of directors to fill any vacancy on our board of directors, whether such vacancy occurs as a result of an increase in the number of directors or otherwise;

    the absence of cumulative voting rights in the election of directors;

    limiting the ability of stockholders to act by written consent or to call special meetings after Scientific Games ceases to beneficially own, directly or indirectly, more than 50% of our combined voting power; and

    the right of our board of directors to issue preferred stock without stockholder approval.

              These provisions could make it more difficult for a third party to acquire us, even if the third party's offer may be considered beneficial by many stockholders. Nevada law could also prevent attempts by our stockholders to replace or remove our current management and incumbent directors. As a result, stockholders may be limited in their ability to obtain a premium for their shares or control our management or board. See "Description of Capital Stock" for a discussion of these provisions.

The provisions of our articles of incorporation and bylaws requiring exclusive forum in the Eighth Judicial District Court of Clark County, Nevada for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.

              Our articles of incorporation and bylaws will provide that, to the fullest extent permitted by law, and unless we consent in writing to the selection of an alternative forum, the Eighth Judicial District Court of Clark County, Nevada, will be the sole and exclusive forum for any actions, suits or proceedings, whether civil, administrative or investigative (i) brought in our name or right or on our behalf, (ii) asserting a claim for breach of any fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) arising or asserting a claim arising pursuant to any provision of Nevada Revised Statutes, or NRS, Chapters 78 or 92A or any provision of our articles of incorporation or our bylaws, (iv) to interpret, apply, enforce or determine the validity of our articles of incorporation and bylaws or (v) asserting a claim governed by the internal affairs doctrine; provided that the exclusive forum provisions will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Our articles of incorporation and bylaws will further provide that, in the event that the Eighth Judicial District Court of Clark County, Nevada does not have jurisdiction over any such action, suit or proceeding, then any other state district court located in the State of Nevada will be the sole and exclusive forum therefor and in the event that no state district court in the State of Nevada has jurisdiction over any such action, suit or proceeding, then a federal court located within the State of Nevada will be the sole and exclusive forum therefor. Although we believe these provisions benefit us by providing increased consistency in the application of Nevada law in the types of lawsuits to which they apply, these provisions may have the effect of discouraging lawsuits against our directors and officers. The enforceability of similar choice of forum provisions in other companies' articles of incorporation and bylaws has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our articles of incorporation and bylaws to be inapplicable or unenforceable in such action. If a court were to find the choice of forum provisions contained in our articles of incorporation and bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business, financial condition or results of operations.

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Limitations on director and officer liability and our indemnification of our directors and officers may discourage stockholders from bringing suit against a director or officer.

              Our articles of incorporation and bylaws will provide, pursuant to Nevada law, that our directors and officers will not be personally liable to us or our stockholders for damages as a result of any act or failure to act in his or her capacity as a director or officer unless (i) the statutory presumption in his or her favor established by NRS 78.138(3) is rebutted, (ii) the act or failure to act constituted a breach of his or her fiduciary duties as a director or officer, and (iii) the breach involved intentional misconduct, fraud or a knowing violation of law. These provisions may discourage stockholders from bringing suit against a director or officer for breach of fiduciary duty and may reduce the likelihood of derivative litigation brought by stockholders on our behalf against a director or officer. In addition, our articles of incorporation and bylaws will require indemnification of directors and officers to the fullest extent permitted by Nevada law.

We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress the price of our Class A common stock.

              Our articles of incorporation authorize us to issue one or more series of preferred stock. Our board of directors will have the authority to determine the preferences, limitations and relative rights of the shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by our stockholders. Our preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of our Class A common stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discourage bids for our Class A common stock at a premium to the market price, and materially and adversely affect the market price and the voting and other rights of the holders of our Class A common stock.

We may be subject to securities class action, which may harm our business and operating results.

              Companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and damages, and divert management's attention from other business concerns, which could seriously harm our business, results of operations, financial condition or cash flows.

              We may also be called on to defend ourselves against lawsuits relating to our business operations. Some of these claims may seek significant damage amounts due to the nature of our business. Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such proceedings. A future unfavorable outcome in a legal proceeding could have an adverse impact on our business, financial condition and results of operations. In addition, current and future litigation, regardless of its merits, could result in substantial legal fees, settlement or judgment costs and a diversion of management's attention and resources that are needed to successfully run our business.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

              We have made statements under the captions "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "The Transactions," "Business" and in other sections of this prospectus that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue," the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. Any estimates and forward-looking statements contained in this prospectus speak only as of the date of this prospectus and are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under the caption entitled "Risk Factors." You should specifically consider the numerous risks outlined under "Risk Factors."

              Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this prospectus to conform our prior statements to actual results or revised expectations.

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THE TRANSACTIONS

Existing Organization

              Prior to the consummation of this offering and the organizational transactions described below, the SG Members were the only members of SciPlay Parent LLC, which is currently treated as a partnership for U.S. federal income tax purposes. Upon consummation of this offering, SciPlay Parent LLC will continue to be treated as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any U.S. federal entity-level income taxes. Rather, taxable income or loss will be included in the U.S. federal income tax returns of SciPlay Parent LLC's members (SciPlay and the SG Members).

              SciPlay was incorporated as a Nevada corporation on November 30, 2018 to serve as the issuer of the Class A common stock offered hereby and will be the sole manager of SciPlay Parent LLC following the consummation of the Transactions.

The Transactions

              We refer to the organizational transactions below, as well as the consummation of this offering as described in this prospectus, as the "Transactions."

              In connection with the closing of this offering, we will consummate the following organizational transactions:

    the SciPlay Parent LLC Agreement will be amended and restated to, among other things, (i) provide for a single class of LLC Interests, (ii) exchange all of the SG Members' existing member's interests in SciPlay Parent LLC for LLC Interests, (iii) provide for the right of the SG Members to have their LLC Interests redeemed or exchanged for shares of our Class A common stock or, at our option, cash and (iv) appoint SciPlay as the sole manager of SciPlay Parent LLC;

    SciPlay's articles of incorporation will be amended and restated to, among other things, provide for Class A common stock and Class B common stock;

    SciPlay will issue and sell 22,000,000 shares of Class A common stock to the purchasers in this offering (or 25,300,000 shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

    SciPlay intends to use the net proceeds from this offering (including net proceeds received upon exercise of the underwriters' option to purchase additional shares of Class A common stock), after deducting the underwriting discount, as follows:

    $280.2 million to acquire from SG Holding I 19,872,340 LLC Interests (or $326.7 million and 23,172,340 LLC Interests, if the underwriters exercise in full their option to purchase additional shares of Class A common stock); and

    $30.0 million to acquire from SciPlay Parent LLC 2,127,660 newly issued LLC Interests;

    SG Holding I will use $255.0 million of the net proceeds it receives from the sale of its LLC Interests in connection with this offering to make the Upfront License Payment required under the IP License Agreement;

    SciPlay Parent LLC intends to use the net proceeds from the sale of its newly issued LLC Interests in this offering to pay fees and expenses of approximately $10.0 million in connection with the Transactions, including this offering, and $20.0 million for general

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      corporate purposes, including to pay a portion of contingent acquisition consideration that may become payable as a result of this offering;

    SciPlay will issue shares of Class B common stock to the SG Members, on a one-to-one basis with the number of LLC Interests owned by the SG Members following the foregoing transactions;

    following the consummation of the transactions described above, the SG Members will own 82.6% of the LLC Interests (or 80.0% if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and 100% of the shares of SciPlay's Class B common stock; and

    SciPlay, SciPlay Parent LLC and the SG Members will enter into the TRA, and SciPlay and the SG Members will enter into the Registration Rights Agreement.

Organizational Structure Following the Offering

              Immediately following the completion of the Transactions:

    our articles of incorporation will require us at all times to maintain (i) a ratio of one LLC Interest owned by us for each share of Class A common stock issued by us (subject to certain exceptions for treasury shares, shares underlying certain convertible or exchangeable securities and shares of unvested restricted stock issued pursuant to certain employee incentive plans) and (ii) a one-to-one ratio between the number of shares of Class B common stock issued by us and owned by the SG Members and the number of LLC Interests owned by the SG Members, and the SciPlay Parent LLC Agreement will require SciPlay Parent LLC at all times to maintain a one-to-one ratio between the number of shares of Class A common stock issued by us and the number of LLC Interests owned by us (subject to equivalent exceptions);

    the SG Members will own (i) LLC Interests, representing 82.6% of the economic interest in SciPlay Parent LLC (or 80.0%, if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and (ii) Class B common stock representing approximately 97.9% of our combined voting power (or approximately 97.6%, if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

    we will own LLC Interests representing 17.4% of the economic interest in SciPlay Parent LLC (or 20.0%, if the underwriters exercise in full their option to purchase additional shares of Class A common stock), and we will be the sole manager of SciPlay Parent LLC; and

    purchasers in this offering (i) will own 22,000,000 shares of Class A common stock, representing approximately 2.1% of our combined voting power (or approximately 25,300,000 shares and 2.4%, respectively, if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and (ii) through our ownership of LLC Interests, indirectly hold approximately 17.4% of the economic interest in SciPlay Parent LLC (or 20.0%, if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

              Immediately following the Transactions, we will be a holding company, and our sole material asset will be LLC Interests of SciPlay Parent LLC. As the sole manager of SciPlay Parent LLC, we will control all of the business and affairs of SciPlay Parent LLC. Accordingly, although we will have a minority economic interest in SciPlay Parent LLC, we will have the sole voting interest in, and control the management of SciPlay Parent LLC.

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              Our corporate structure following this offering, as described above, is commonly referred to as an "Up-C" structure, which is often used by partnerships and limited liability companies when they undertake an initial public offering of their business. The Up-C structure will allow the SG Members to continue to realize tax benefits associated with owning interests in an entity that is treated as a partnership, or "passthrough" entity, for U.S. income tax purposes following the offering. One of these benefits is that future taxable income of SciPlay Parent LLC that is allocated to the SG Members will be taxed on a flow-through basis and therefore will not be subject to corporate taxes at the SciPlay Parent LLC entity level. Additionally, because the SG Members may redeem or exchange their LLC Interests for newly issued shares of our Class A common stock on a one-for-one basis or, at our option, for cash, the Up-C structure also provides the SG Members with potential liquidity that holders of non-publicly traded limited liability companies are not typically afforded. For more information regarding the redemption and exchage of LLC Interests, see "Certain Relationships and Related Party Transactions—The Transactions—SciPlay Parent LLC Agreement—Redemption Rights of Members."

              We will receive the same benefits as the SG Members on account of our ownership of LLC Interests in an entity treated as a partnership, or "passthrough" entity, for U.S. income tax purposes. As the SG Members redeem or exchange their LLC Interests, we will obtain a step-up in tax basis in our share of SciPlay Parent LLC assets. This step-up in tax basis will provide us with certain tax benefits, such as future depreciation and amortization deductions that can reduce the taxable income allocable to us. We expect to enter into the TRA with SciPlay Parent LLC and the SG Members that will provide for the payment by us to the SG Members of 85% of the amount of tax benefits, if any, that we actually realize (or in some cases are deemed to realize) as a result of (i) increases in the tax basis of assets of SciPlay Parent LLC (a) in connection with this offering, (b) resulting from any redemptions or exchanges of LLC Interests pursuant to the SciPlay Parent LLC Agreement or (c) resulting from certain distributions (or deemed distributions) by SciPlay Parent LLC and (ii) certain other tax benefits related to our making of payments under the TRA.

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              The following diagram shows our organizational structure after giving effect to the Transactions, based on the assumed offering and sale of 22,000,000 shares of Class A common stock in this offering at an initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and assuming no exercise by the underwriters of their option to purchase additional shares of Class A common stock in this offering:

GRAPHIC

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USE OF PROCEEDS

              We estimate that the net proceeds to us from this offering will be approximately $310.2 million, assuming an initial public offering price of $15.00 per share of Class A common stock (the midpoint of the range set forth on the cover page of this prospectus), after deducting the estimated underwriting discount.

              Each $1.00 increase (decrease) in the public offering price per share of Class A common stock would increase (decrease) our net proceeds, after deducting the corresponding estimated underwriting discount by $20.7 million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of 1,000,000 shares in the number of shares of Class A common stock offered by us would increase (decrease) the net proceeds to us by approximately $14.1 million, assuming that the initial public offering price is the midpoint of the range set forth on the cover page of this prospectus, after deducting the corresponding estimated underwriting discount.

              We intend to use the net proceeds of this offering to purchase LLC Interests from SG Holding I and SciPlay Parent LLC, at a purchase price per interest equal to the initial public offering price per share of Class A common stock less the underwriting discount, as follows:

    $255.0 million to purchase LLC Interests from SG Holding I, which amount will be used by SG Holding I to make the Upfront License Payment required under the IP License Agreement;

    $10.0 million to purchase LLC Interests from SciPlay Parent LLC, which amount will be used by SciPlay Parent LLC to pay fees and expenses in connection with the Transactions, including this offering;

    $20.0 million to purchase LLC Interests from SciPlay Parent LLC, which amount will be used by SciPlay Parent LLC for general corporate purposes, including to pay a portion of contingent acquisition consideration that may become payable as a result of this offering; and

    $25.2 million to purchase LLC interests from SG Holding I (based on the assumed offering and sale of an aggregate of 22,000,000 shares of Class A common stock in this offering at an initial public offering price of $15.00 per share, which is the midpoint of the range set forth on the cover page of this prospectus).

To the extent the net proceeds from this offering are not sufficient to cover the amounts described above, we will prioritize the payments in the order listed above with respect to the Upfront License Payment, the fees and expenses in connection with the Transactions and the general corporate purposes for SciPlay Parent LLC. If the net proceeds are still not sufficient to cover those items, we will fund the difference using our cash on hand and, if necessary, borrowings under the Revolver, and will not purchase the LLC Interests from SG Holding I described in the last bullet listed above. To the extent the net proceeds from this offering are greater than the amounts described above, we will use the remainder to purchase additional LLC Interests from SG Holding I. We will not have any ability to control how SG Holding I uses any such amounts in excess of the amount received to make the Upfront License Payment.

              If the underwriters exercise their option to purchase additional shares of Class A common stock in full, we estimate that our additional net proceeds will be approximately $46.5 million, assuming an initial public offering price of $15.00 per share of Class A common stock (the midpoint of the range set forth on the cover page of this prospectus), after deducting the corresponding estimated underwriting discount. We will use the additional net proceeds we receive pursuant to any exercise of the underwriters' option to purchase additional shares of Class A common stock to purchase

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additional LLC Interests from SG Holding I to maintain the one-to-one ratio between the number of shares of Class A common stock issued by us and the number of LLC Interests owned by us.

              Affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Macquarie Capital (USA) Inc. and RBC Capital Markets, LLC, who are underwriters in this offering, are lenders under certain credit facilities with our affiliate, Scientific Games International, Inc., a wholly owned subsidiary of Scientific Games Corporation. If any portion of the proceeds received by SG Holding I from its sale of LLC Interests to us is used to pay debt under such credit facilities, these underwriters or their affiliates may receive a portion that is 5% or more of the net proceeds of this offering due to the repayment of borrowings thereunder. Additionally, if any of the underwriters or their affiliates hold notes issued by Scientific Games International, Inc., they may receive a portion of the proceeds of this offering if any portion of the proceeds received by SG Holding I from its sale of LLC Interests to us is used to repurchase or redeem any such outstanding notes. Because of the manner in which the proceeds may be used, this offering is being made in compliance with FINRA Rule 5121. Additionally, affiliates of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, Macquarie Capital (USA) Inc. and RBC Capital Markets, LLC, who are acting as underwriters in this offering, will act as joint lead arrangers and joint bookrunners under our Revolver that we expect to enter in connection with this offering. Moreover, none of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Macquarie Capital (USA) Inc. or RBC Capital Markets, LLC is permitted to sell Class A common stock in this offering to an account over which it exercises discretionary authority without the prior specific written approval of the account holder. See "Underwriting (Conflicts of Interest)."

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DIVIDEND POLICY

              We do not anticipate declaring or paying any cash dividends to holders of our Class A common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance the growth of our business. If we decide to pay cash dividends in the future, the declaration and payment of such dividends will be at the sole discretion of our board of directors and may be discontinued at any time. Holders of our Class B common stock are not entitled to participate in any dividends declared by our board of directors. In determining the amount of any future dividends, our board of directors will take into account any legal or contractual limitations, our actual and anticipated future earnings, cash flow, debt service and capital requirements and other factors that our board of directors may deem relevant. We are a holding company, and substantially all of our operations are carried out by SciPlay Parent LLC and its subsidiaries, and therefore we will only be able to pay dividends from funds we receive from SciPlay Parent LLC. Our ability to pay dividends may also be restricted by the terms of any future credit agreement or any future debt or preferred equity securities of us or our subsidiaries. See "Risk Factors—Risks Related to This Offering and Ownership of Our Class A Common Stock—We do not currently intend to pay dividends on our Class A common stock" and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility."

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CAPITALIZATION

              The following table sets forth the cash and cash equivalents and capitalization as of December 31, 2018:

    of SG Social Holding Company II, LLC and its subsidiaries on an actual basis; and

    of SciPlay and its subsidiaries on a pro forma basis giving effect to the Transactions, including the sale and issuance by us of 22,000,000 shares of Class A common stock in this offering at an assumed initial public offering price of $15.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, after (i) deducting the estimated underwriting discount and (ii) the application of the proceeds from the offering, each as described under "Use of Proceeds."

              You should read this table in conjunction with the financial statements and related notes included elsewhere in this prospectus as well as "Prospectus Summary—Summary Actual and Pro Forma Consolidated Financial and Other Data," "Use of Proceeds," "The Transactions," "Selected Consolidated Financial and Other Data," and "Management's Discussion and Analysis of Financial Condition and Results of Operations."

 
  As of December 31, 2018  
(millions, except share and per share amounts)
 
SG Social Holding
Company II, LLC
Actual
 
SciPlay
Corporation
Pro Forma(1)(2)
 

Cash and cash equivalents

  $ 10.0   $ 30.1  

Parent's/stockholders' equity:

             

Class A common stock, par value $.001 per share, 625,000,000 shares authorized, pro forma; 22,000,000 shares issued and outstanding, pro forma

         

Class B common stock, par value $.001 per share, 130,000,000 shares authorized, pro forma; 104,400,000 shares issued and outstanding, pro forma

        0.1  

Additional paid-in capital

        51.1  

Accumulated other comprehensive loss

        (1.8 )

Total Parent's/stockholders' equity

    138.6     49.4  

Non-controlling interest

        114.5  

Total capitalization

  $ 148.6   $ 194.0  

(1)
Each $1.00 increase (decrease) in the assumed initial public offering price of $15.00 per share of Class A common stock, which is the midpoint of the price range listed on the cover page of this prospectus, would increase (decrease) the pro forma amount of each of additional paid-in capital, total stockholders' equity and total capitalization by $20.7 million, assuming that the number of shares of Class A common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the corresponding estimated underwriting discount. We may also increase or decrease the number of shares of Class A common stock we are offering. Each increase (decrease) of 1,000,000 in the number of shares of Class A common stock offered by us would increase (decrease) the pro forma amount of each of additional paid-in capital, total stockholders' equity and capitalization by $14.1 million, assuming an initial public offering price of $15.00 per share of Class A common stock, after deducting the corresponding estimated underwriting discount. Due to our expected use of proceeds as described in "Use of Proceeds," we do not expect our cash and cash equivalents to increase beyond the amounts in the table above. Our cash and cash equivalents will be less than the amounts shown above to the extent the proceeds from this offering are not sufficient

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    for us to purchase up to $20.0 million in LLC Interests from SciPlay Parent LLC for use by SciPlay Parent LLC for general corporate purposes as described in "Use of Proceeds."

(2)
In connection with the consummation of this offering, we expect to enter into the Revolver, pursuant to which we will be able to borrow up to $150.0 million. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility."

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DILUTION

              Because the SG Members will not own any Class A common stock or have any right to receive distributions from SciPlay after this offering, we have presented dilution in pro forma net tangible book value per share both before and after this offering assuming that the SG Members have all of their LLC Interests redeemed or exchanged for newly issued shares of Class A common stock on a one-to-one basis (rather than for cash) and the cancellation for no consideration of all of their shares of Class B common stock (which are not entitled to receive distributions or dividends, whether cash or stock, from SciPlay) in order to more meaningfully present the potential dilutive impact on the investors in this offering. We refer to the assumed redemption or exchange of all LLC Interests for shares of Class A common stock as described in the previous sentence as the "Assumed Redemption."

              If you invest in our Class A common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our Class A common stock and the pro forma net tangible book value per share of our Class A common stock after this offering.

              Pro forma net tangible book value per Class A share of SciPlay is determined by dividing our total tangible assets less our total liabilities by the number of shares of our Class A common stock outstanding. As of December 31, 2018, after giving effect to the Transactions (other than payment for the Transactions as described in "Use of Proceeds") and the Assumed Redemption, but not this offering, we had a pro forma net tangible book value of $4.3 million, or $0.03 per share of Class A common stock.

              After giving further effect to receipt of the net proceeds from our issuance and the sale of 22,000,000 shares of Class A common stock in this offering at an assumed initial public offering price of $15.00 per share of Class A, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discount, our pro forma as adjusted net tangible book value as of December 31, 2018 would have been approximately $29.7 million, or approximately $0.23 per share. This amount represents an immediate increase in pro forma net tangible book value of $0.20 per share to our existing stockholders and an immediate dilution of approximately $14.77 per share to new investors participating in this offering. We determine dilution by subtracting the pro forma as adjusted net tangible book value per share after this offering from the amount of cash that a new investor paid for a share of Class A common stock. The following table illustrates this dilution:

Assumed initial public offering price per share of Class A common stock

        $ 15.00  

Pro forma net tangible book value per share as of December 31, 2018, after giving effect to the Transactions(1) and the Assumed Redemption, but not this offering

  $ 0.03        

Increase in pro forma net tangible book value per share attributable to investors in this offering

   
0.20
       

Pro forma as adjusted net tangible book value per Class A share after this offering

        $ 0.23  

Dilution per share to new Class A common stock investors in this offering

        $ 14.77  

(1)
Pro forma net tangible book value per share as of December 31, 2018 does not give effect to the $255.0 million Upfront License Payment under the IP License Agreement and the equity distribution to Bally Gaming of $25.2 million, as such amounts will be paid with proceeds from the offering.

              As described in "Use of Proceeds," to the extent we receive more than $285.0 million in proceeds from this offering, net of the estimated underwriting discount, we will use any such net proceeds to purchase additional LLC Interests from SG Holding I, which will result in no change to our pro forma as adjusted net tangible book value. Our pro forma as adjusted net tangible book value

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will be less than the amount shown above to the extent the proceeds from this offering are not sufficient for us to purchase up to $20.0 million in LLC interests from SciPlay Parent LLC for use by SciPlay Parent LLC for general corporate purposes as described in "Use of Proceeds."

              If the underwriters exercise their option to purchase additional shares of our Class A common stock, we will use the additional net proceeds we receive pursuant to any such exercise to purchase additional shares of Class A common stock to purchase an equal number of additional LLC Interests from SG Holding I. Accordingly, assuming a full exercise of the underwriters' option and an initial public offering price of $15.00 per share of Class A common stock, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discount, there would be no change to our pro forma as adjusted net tangible book value after this offering.

              The following table summarizes on the pro forma basis described above, as of December 31, 2018, the differences between the number of shares of Class A common stock purchased from us, the total consideration paid to us in cash and the average price per share that existing stockholders and new investors paid. The calculation below is based on an assumed initial public offering price of $15.00 per share of Class A common stock, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting the estimated underwriting discount and estimated offering expenses payable by us.

 
  Shares of Class A
Common Stock
   
   
   
 
 
  Total Consideration    
 
 
  Average Price
Per Share
 
 
  Number   Percent   Amount   Percent  

SG Members

    104,400,000     82.6 % $     % $  

New investors

    22,000,000     17.4     330,000,000     100.0     15.00  

Total

    126,400,000     100.0 %   330,000,000     100.0 % $ 15.00  

              Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters' option to purchase additional shares of Class A common stock from us. If the underwriters' option to purchase additional shares of our Class A common stock were exercised in full, the SG Members would own 80.0% and the investors purchasing shares of our Class A common stock in this offering would own 20.0% of the total number of shares of our common stock outstanding immediately after completion of this offering.

              The foregoing tables and calculations are based on the number of shares of our Class A common stock that will be outstanding immediately following the Transactions, including this offering, and after giving effect to the Assumed Redemption, but excluding 6,500,000 shares of our Class A common stock reserved for future grants or for sale under our Long-Term Incentive Plan as described in "Executive Compensation—2019 Long-Term Incentive Plan."

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

              The following tables present the selected consolidated financial and other data for SG Social Holding Company II, LLC for the periods indicated. SG Social Holding Company II, LLC, which is a holding company and which sole material asset was its member's interests in SciPlay Parent LLC, is the predecessor of the issuer, SciPlay, for financial reporting purposes. The selected consolidated statements of income data for the years ended December 31, 2018 and 2017 and the selected consolidated balance sheet data as of December 31, 2018 and December 31, 2017 are derived from the audited consolidated financial statements of SG Social Holding Company II, LLC and its subsidiaries included in this prospectus.

              The results of operations for the periods presented below are not necessarily indicative of the results to be expected for any future period. The selected consolidated financial and other data included in this section are not intended to replace the consolidated financial statements and the accompanying notes appearing elsewhere in this prospectus.

              You should read the following selected consolidated financial and other data together with the more detailed information contained in "Prospectus Summary—Summary Actual and Pro Forma Consolidated Financial and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the accompanying notes appearing elsewhere in this prospectus.

              The selected consolidated financial and other data of SciPlay have not been presented, as SciPlay is a newly incorporated entity, has had no business transactions or activities to date and had no assets or liabilities during the periods presented in this section.

 
  SG Social Holding
Company II, LLC
 
 
  Year Ended
December 31,
 
(in millions)
  2018   2017  

Statement of Income Data:

             

Revenue

  $ 416.2   $ 361.4  

Operating expenses:

             

Cost of revenue(1)(5)

    160.4     138.6  

Sales and marketing(1)

    105.7     86.7  

General and administrative(1)

    34.5     44.5  

Research and development(1)

    25.6     26.5  

Depreciation and amortization

    15.1     17.0  

Contingent acquisition consideration

    27.5      

Restructuring and other

    1.0     0.3  

Operating income

    46.4     47.8  

Other income (expense):

             

Other income (expense), net

    3.0     (2.6 )

Total other income (expense)

    3.0     (2.6 )

Net income before income taxes

    49.4     45.2  

Income tax expense

    10.4     22.1  

Net income(5)

  $ 39.0   $ 23.1  

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(in millions, except ARPDAU and percentages)
  SG Social Holding
Company II, LLC
 

Selected Other Data:

             

AEBITDA(2)(5)

  $ 94.0   $ 69.4  

Net income margin(3)

    9.4 %   6.4 %

AEBITDA margin(2)

    22.6 %   19.2 %

Average MAU(4)

    8.3     7.6  

Average DAU(4)

    2.6     2.5  

ARPDAU(4)

  $ 0.43   $ 0.40  

Mobile penetration(4)

    78 %   72 %

 

 
  SG Social Holding
Company II, LLC
 
(in millions)
  As of
December 31,
2018
  As of
December 31,
2017
 

Balance Sheet Data:

             

Cash and cash equivalents

  $ 10.0   $ 16.8  

Total assets

    194.9     211.6  

Total contingent acquisition consideration liability

    29.3     1.8  

Total Parent's/Stockholders' equity

    138.6     163.0  

(1)
Excluding Depreciation and amortization.

(2)
AEBITDA and AEBITDA margin, as used herein, are non-GAAP financial measures that are presented as supplemental disclosure and are fully described and reconciled to the most directly comparable GAAP measure in footnote three to "Prospectus Summary—Summary Actual and Pro Forma Consolidated Financial and Other Data."

(3)
Net income margin represents net income as a percentage of revenue, which is the most directly comparable GAAP measure to AEBITDA margin described above.

(4)
See the definitions of the key performance indicators in "Management's Discussion and Analysis of Financial Condition and Results of Operations."

(5)
The years ended December 31, 2018 and 2017 include $26.1 million and $23.6 million, respectively, in intellectual property royalties paid to Scientific Games for use of its intellectual property, which are included in cost of revenue. Under the terms of the IP License Agreement, we will acquire an exclusive (subject to certain limited exceptions), perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement in any Covered Games, and a non-exclusive, perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates after such third anniversary, for use in our currently available games. So long as the IP License Agreement remains in effect, we do not expect to pay any future royalties or fees for our use of intellectual property owned by Bally Gaming or its affiliates in our currently available games. Under the terms of the IP License Agreement, we will receive an exclusive (subject to certain limited exceptions) license to use third-party intellectual property licensed to Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement, to the extent permitted to be sublicensed to us, in any of the Covered Games and a non-exclusive license to use third-party intellectual property licensed to Bally Gaming or its affiliates after the third anniversary of the date of the IP License Agreement, to the extent permitted to be sublicensed to us, but only in our currently available games. Under the IP License Agreement, we will be required to pay to Bally Gaming all costs, fees and expenses related to such third-party licenses, including proportionate pass-through expenses, such as our allocable share of minimum guarantees to the owners of such intellectual property. For a description of the IP License Agreement, see "Certain Relationships and Related Party Transactions—Relationship with Scientific Games—IP License Agreement."

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

              The unaudited pro forma condensed consolidated financial statements consist of the unaudited pro forma condensed consolidated statements of income for the year ended December 31, 2018 and the unaudited pro forma condensed consolidated balance sheet as of December 31, 2018. The unaudited pro forma condensed consolidated financial statements have been derived by application of pro forma adjustments to SG Social Holding Company II, LLC consolidated financial statements included elsewhere in this prospectus.

              The unaudited pro forma condensed consolidated balance sheet reflects the Transactions, as described in this prospectus, as if they occurred on December 31, 2018, while the unaudited pro forma condensed consolidated statement of income gives effect to the Transactions as if they occurred on January 1, 2018. The following are the organizational transactions reflected in these unaudited pro forma condensed consolidated financial information, with a more detailed description of the Transactions included elsewhere in this prospectus:

    the SciPlay Parent LLC Agreement will be amended and restated to, among other things, (i) provide for a single class of LLC Interests, (ii) exchange all of the SG Members' existing member's interests in SciPlay Parent LLC for LLC Interests, (iii) provide for the right of the SG Members to have their LLC Interests redeemed or exchanged for shares of our Class A common stock or, at our option, cash and (iv) appoint SciPlay as the sole manager of SciPlay Parent LLC;

    SciPlay's articles of incorporation will be amended and restated to, among other things, provide for Class A common stock and Class B common stock;

    SciPlay will issue and sell 22,000,000 shares of Class A common stock to the purchasers in this offering (or 25,300,000 shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

    SciPlay intends to use the net proceeds from this offering (including net proceeds received upon any exercise of the underwriters' option to purchase additional shares of Class A common stock), after deducting the underwriting discount, as follows:

    $280.2 million to acquire from SG Holding I 19,872,340 LLC Interests (or $326.7 million and 23,172,340 LLC Interests, if the underwriters exercise in full their option to purchase additional shares of Class A common stock); and

    $30.0 million to acquire from SciPlay Parent LLC 2,127,660 newly issued LLC Interests;

    SG Holding I will use $255.0 million of the net proceeds it receives from the sale of its LLC Interests in connection with this offering to make the Upfront License Payment required under the IP License Agreement;

    SciPlay Parent LLC intends to use the net proceeds from the sale of its newly issued LLC Interests in this offering to pay fees and expenses of approximately $10.0 million in connection with the Transactions, including this offering, and $20.0 million for general corporate purposes, which may include the payment of contingent acquisition consideration;

    SciPlay will issue shares of Class B common stock to the SG Members, on a one-to-one basis with the number of LLC Interests owned by the SG Members following the foregoing transactions;

    following the consummation of the transactions described above, the SG Members will own 82.6% of the LLC Interests (or 80.0% if the underwriters exercise in full their option to

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      purchase additional shares of Class A common stock) and 100% of the shares of SciPlay's Class B common stock; and

    SciPlay, SciPlay Parent LLC and the SG Members will enter into the TRA, and SciPlay and the SG Members will enter into the Registration Rights Agreement.

              The pro forma adjustments, described in the related notes, are based on currently available information and methodologies that are factually supportable and directly attributable to the Transactions, and the unaudited pro forma condensed consolidated statement of income reflects only those adjustments that are expected to have a continuing impact on our results of operations. The unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and do not purport to represent our consolidated results of operations or consolidated financial position that would actually have occurred had the Transactions referred to above been consummated on the dates assumed or to project our consolidated results of operations or consolidated financial position for any future date or period. Actual results could differ, perhaps materially, from these estimates and assumptions.

              Scientific Games currently licenses intellectual property and provides certain services to us, and costs associated with these functions have been charged to us and settled in cash under the intercompany agreements entered into in September 2016. The charges include costs related to corporate services, such as executive management, information technology, legal, finance and accounting, human resources, tax, treasury, research and development, sales and marketing, shared facilities and other services. These costs were charged on the basis of direct usage and actual costs when identifiable, with the remainder charged on the basis of revenues, operating expenses, headcount or other relevant measures. Stock-based compensation expense includes the stock-based compensation expense recognized by SG Social Holding Company II, LLC associated with Scientific Games Corporation's equity compensation plans in its financial statements directly related to Social business line employees who are participants in Scientific Games Corporation's stock compensation plan. These amounts are reflected within operating expenses in our consolidated statements of income and comprehensive income. Management believes the basis on which the expenses have been charged to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the periods presented. We generally expect to continue to use these services following the completion of this offering, depending on the type of the service and the location at which such service is provided. However, these charges may not necessarily be indicative of the actual expenses we would have incurred as an independent company during the periods presented and prior to the offering or of the costs we will incur in the future. As part of the Transactions and pursuant to the terms of the IP License Agreement, we will acquire an exclusive (subject to certain limited exceptions), perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement in any Covered Games, and a non-exclusive, perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates after such third anniversary, for use in our currently available games. Under the terms of the IP License Agreement, we will receive an exclusive (subject to certain limited exceptions) license to use third-party intellectual property licensed to Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement, to the extent permitted to be sublicensed to us, in any of the Covered Games and a non-exclusive license to use third-party intellectual property licensed to Bally Gaming or its affiliates after the third anniversary of the date of the IP License Agreement, to the extent permitted to be sublicensed to us, but only in our currently available games. Under the IP License Agreement, we will be required to pay to Bally Gaming all costs, fees and expenses related to such third-party licenses, including proportionate pass-through expenses, such as our allocable share of minimum guarantees to the owners of such intellectual property. So long as the IP License Agreement remains in effect, we do not expect to pay any future royalties or fees for our use of intellectual property owned by Bally Gaming or its affiliates in our

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currently available games. The amount charged to us for the year ended December 31, 2018 for such royalties and fees was $26.1 million. For a description of the IP License Agreement, see "Certain Relationships and Related Party Transactions—Relationship with Scientific Games—IP License Agreement."

              Following the completion of this offering, we will be subject to the reporting requirements of the Exchange Act. We will be required to establish procedures and practices as a standalone public company in order to comply with our obligations under the Exchange Act and related rules and regulations. As a result, we will incur additional costs, including internal audit, investor relations, stock administration and regulatory compliance costs. These additional costs may differ from the costs that were historically charged to us from Scientific Games. We have not included any pro forma adjustments relating to these costs.

              The presentation of the unaudited pro forma condensed consolidated financial information is prepared in conformity with Article 11 of Regulation S-X.

              The following unaudited pro forma condensed consolidated financial statements and the related notes should be read in conjunction with the sections titled "Use of Proceeds," "Capitalization" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our historical consolidated financial statements and related notes thereto included elsewhere in this prospectus.

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

As of December 31, 2018

(In millions, except share and per share information)

 
  SG Social
Holding
Company II, LLC
  Adjustments
for the
Transactions
   
  As
Adjusted
  Adjustments
for this
Offering
   
  SciPlay
Corporation
Pro Forma
 

ASSETS

                                       

Current assets:

                                       

Cash and cash equivalents

  $ 10.0   $ (280.2 ) (1)(2)         $ 300.3   (3)   $ 30.1  

Accounts receivable, net

    31.5           $ 31.5             31.5  

Prepaid expenses and other current assets

    5.6             5.6     (2.7 ) (5)     2.9  

Total current assets

    47.1     (280.2 )             298.3         64.5  

Property and equipment, net

    1.8             1.8             1.8  

Goodwill

    120.7             120.7             120.7  

Intangible assets, net

    13.6             13.6             13.6  

Software, net

    4.3             4.3             4.3  

Deferred income taxes

    6.4     71.0   (4)     77.4             77.4  

Other assets

    1.0             1.0             1.0  

Total assets

  $ 194.9   $ (209.2 )           $ 298.3       $ 283.3  

LIABILITIES AND PARENT'S/STOCKHOLDERS' EQUITY

   
 
   
 
 

 

   
 
   
 
 

 

   
 
 

Current liabilities:

                                       

Accounts payable

  $ 12.7   $       $ 12.7   $ (2.7 ) (5)   $ 10.0  

Accrued liabilities

    28.0             28.0             28.0  

Due to affiliate

    3.7             3.7             3.7  

Total current liabilities

    44.4             44.4     (2.7 )       41.7  

Deferred income taxes

                             

Other long-term liabilities

    11.9             11.9             11.9  

Liabilities under TRA

        65.8   (4)     65.8             65.8  

Total liabilities

    56.3     65.8         122.1     (2.7 )       119.4  

Commitments and contingencies (see Note 8 to the consolidated financial statements of SG Social Holding Company II, LLC)

                             

 

   
 
 

Parent's/Stockholders' Equity:

                                       

Class A common stock, par value $.001 per share, 625,000,000 shares authorized; 22,000,000 shares issued and outstanding, on pro forma basis

                               

Class B common stock, par value $.001 per share, 130,000,000 shares authorized; 104,400,000 shares issued and outstanding, on pro forma basis

                    0.1   (3)     0.1  

Additional paid-in capital

          (249.0 ) (4)(6)(7)(8)     (249.0 )   300.1   (5)(8)     51.1  

Accumulated net parent investment

    140.8     (140.8 ) (1)(2)(7)                  

Accumulated other comprehensive income (loss)            

    (2.2 )   0.4   (6)     (1.8 )           (1.8 )

Total Parent's/Stockholders' equity attributable to SciPlay

          (389.4 )             298.3         49.4  

Non-controlling interest

          114.5   (6)     114.5             114.5  

Total Parent's/Stockholders' equity

    138.6     (274.9 )                     163.9  

Total liabilities and Parent's/Stockholders' equity            

  $ 194.9   $ (209.2 )           $ 298.3       $ 283.3  

See accompanying notes to unaudited pro forma condensed consolidated balance sheet.

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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

              

(1)
Represents the payments for the purchase of (i) 2,127,660 newly issued LLC Interests from SciPlay Parent LLC at a purchase price per interest equal to the initial public offering price per share of Class A common stock less the underwriting discount and (ii) 19,872,340 LLC Interests from SG Holding I at a purchase price per interest equal to the initial public offering price per share of Class A common stock less the underwriting discount.

(2)
Represents the payment to Bally Gaming of $255.0 million for the purchase of an exclusive (subject to certain limited exceptions), perpetual, non-royalty-bearing license from Bally Gaming for intellectual property created or acquired by Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement in any Covered Games, and a non-exclusive, perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates after such third anniversary, for use in our currently available games. So long as the IP License Agreement remains in effect, we do not expect to pay any future royalties or fees for our use of intellectual property owned by Bally Gaming or its affiliates in our currently available games. The amount charged to us for the year ended December 31, 2018 for such royalties and fees was $26.1 million. The purchase price of the license was determined based on the appropriate valuation methodology performed by a third-party valuation specialist. For a description of the IP License Agreement, see "Certain Relationships and Related Party Transactions—Relationship with Scientific Games—IP License Agreement."

For pro forma and accounting purposes, this transaction will be treated as a deemed distribution for accounting purposes only as it constitutes a transaction between entities under common control. Because this transaction has been accounted for as a transaction among entities under common control, and Bally Gaming has no carrying amount assigned to such intellectual property, SciPlay has not recorded any accounting value for this intellectual property license.

Additionally, the amount includes the equity distribution to Bally Gaming of $25.2 million representing excess proceeds after the payments associated with the Transactions.

(3)
Represents the receipt of approximately $300.2 million by us associated with the sale of 22,000,000 shares of our Class A common stock in this offering at the initial public offering price of $15.00 per share (the midpoint of the price range set forth on the cover page of this prospectus) after deducting the estimated underwriting discount and estimated offering expenses payable by us. A $1.00 increase or decrease in the assumed initial public offering price of $15.00 per share would increase or decrease the net proceeds we receive from this offering by approximately $20.7 million, assuming the number of shares offered by us as set forth on the cover page of this prospectus remains the same and after deducting the underwriting discount and estimated offering expenses payable by us. Each increase (decrease) of 1 million shares in the number of shares of Class A common stock offered by us would increase (decrease) the net proceeds we receive from this offering by approximately $14.1 million, assuming an initial public offering price of $15.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the underwriting discount and estimated offering expenses payable by us. However, due to our expected use of proceeds as described in "Use of Proceeds," we do not expect our pro forma cash and cash equivalents to increase beyond the amount reflected in the unaudited pro forma condensed consolidated balance sheet. Our pro forma cash and cash equivalents will be less than the amount reflected in the unaudited pro forma condensed consolidated balance sheet to the extent the proceeds from this offering are not sufficient for us to purchase up to $20.0

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    million in LLC Interests from SciPlay Parent LLC for use by SciPlay Parent LLC for general corporate purposes as described in "Use of Proceeds."

      The following table reconciles the gross proceeds from this offering to the net cash proceeds to SciPlay, exclusive of transaction (1) described above:

Initial public offering price

  $ 15.00  

Shares of Class A common stock issued in this offering

    22,000,000  

Gross proceeds

  $ 330,000,000  

Underwriting discount

    (19,800,000 )

Professional fees and expenses related to this offering

    (10,000,000 )

Net cash proceeds

  $ 300,200,000  

Additionally, the adjustment also includes the issuance of 104,400,000 shares of our Class B common stock at $.001 par value.

(4)
Adjustments reflect the effects of the TRA on our consolidated balance sheet as a result of SciPlay's purchase of LLC Interests. Pursuant to the TRA, SciPlay will be required to make cash payments to the SG Members equal to 85% of the savings, if any, in U.S. federal, state and local income taxes that SciPlay actually realizes, or in some circumstances is deemed to realize, as a result of certain future tax benefits to which SciPlay may become entitled. SciPlay expects to benefit from the remaining 15% of the tax benefits, if any, that it may actually realize. As a result of SciPlay's purchase of LLC Interests from SG Holding I in this offering, on a cumulative basis, the net effect of accounting for income taxes and the TRA on our financial statements will be a net increase in stockholders' equity of $5.2 million. The amounts to be recorded for both the deferred tax assets and the liability for our obligations under the TRA have been estimated and are based on the assumption that there are no material changes in the relevant tax law and that we earn sufficient taxable income in each year to realize the full tax benefit of the amortization of our assets. A summary of the adjustments is as follows:

we will record an increase of $77.2 million in deferred tax assets for estimated income tax effects of the increase in the tax basis of the purchased LLC Interests, based on a statutory income tax rate of 24.0% (which includes a provision for U.S. federal, state, and local income taxes), which will be offset by the write-off of historical deferred tax assets of $6.2 million;

we will record $65.8 million, which represents 85% of the estimated realizable tax benefit resulting from (i) the increase in tax basis in the tangible and intangible assets of SciPlay Parent LLC related to the purchased LLC Interests as noted above and (ii) certain other tax benefits related to entering into the TRA, including tax benefits attributable to payments under the TRA, as an increase to the liability due to the SG Members under the TRA; and

we will record an increase to additional paid-in capital of $5.2 million, related to the difference between the increase in deferred tax assets and the increase in liability due to the SG Members under the TRA.

(5)
Reflects the reclassification of $2.7 million in deferred professional fees associated with this offering that have been recorded in other assets and upon completion of this offering charged against the proceeds from this offering with a corresponding reduction in Additional paid-in capital.

(6)
As a result of the Transactions, SciPlay's sole material asset will be the ownership of 17.4% of the LLC Interests in, and its only business will be to act as the sole manager of, SciPlay Parent LLC. Therefore, pursuant to ASC 810 Consolidation, we will consolidate the financial

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    results of SciPlay Parent LLC into our consolidated financial statements. The ownership interests of the members of SciPlay Parent LLC other than SciPlay will be accounted for as a non-controlling interest in SciPlay's consolidated financial statements after this offering. Immediately following this offering, the non-controlling interest of SciPlay will represent 82.6% of the outstanding common member's interests, calculated as follows:

 
  Member's
Interests
  Percentage  

Interest in SciPlay Parent LLC held by SciPlay

    22,000,000     17.4 %

Non-controlling interest in SciPlay Parent LLC held by Scientific Games

    104,400,000     82.6 %

    126,400,000     100 %

If the underwriters were to exercise their option to purchase additional shares of our Class A common stock in full, SciPlay would own 20.0% of the economic interest of SciPlay Parent LLC and Scientific Games would own the remaining 80.0% of the economic interest of SciPlay Parent LLC.

(7)
Reflects the elimination of Net parent investment and establishment of Additional paid-in capital as part of the purchase of 17.4% of LLC Interests in SciPlay Parent LLC from the SG Members.

(8)
Reflects the impact of the transactions described in (3), (4), (5) and (7) above on Additional paid-in capital summarized as follows:

Share price in excess of par value of Class A common stock issued in this offering(3)

  $ 310.2  

Professional fees and expenses related to this offering(3)(5)

    (10.0 )

Net impact of TRA and deferred income taxes(4)

    5.2  

Purchase of 17.4% of LLC Interests of SciPlay Parent LLC from SG Holding I and impact of elimination of Net parent investment(7)

    (254.3 )

Additional paid-in capital pro forma adjustment

  $ 51.1  

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UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

Year Ended December 31, 2018

(In millions, except share and per share information)

 
  SG Social
Holding
Company
II, LLC
  Adjustments
for the
Transactions
   
  As Adjusted   Adjustments
for this
Offering
   
  SciPlay
Corporation
Pro Forma
 

Revenue

  $ 416.2   $       $ 416.2   $       $ 416.2  

Operating expenses:

                                       

Cost of revenue(a)

    160.4     (26.1 ) (1)     134.3             134.3  

Sales and marketing(a)

    105.7             105.7             105.7  

General and administrative(a)

    34.5             34.5             34.5  

Research and development(a)

    25.6             25.6             25.6  

Depreciation and amortization

    15.1             15.1             15.1  

Contingent acquisition consideration

    27.5             27.5             27.5  

Restructuring and other

    1.0             1.0             1.0  

Operating income

    46.4     26.1         72.5             72.5  

Other (expense) income:

                                       

Other expense, net

    3.0     (0.8 ) (2)     2.2             2.2  

Total other (expense) income

    3.0     (0.8 )       2.2             2.2  

Net income before income taxes

    49.4     25.3         74.7             74.7  

Income tax expense

    10.4     (8.3 ) (1)(2)(4)     2.1             2.1  

Net income

  $ 39.0     33.6         72.6             72.6  

Less: net income attributable to non-controlling interest

          (62.5 ) (3)     (62.5 )           (62.5 )

Net income attributable to SciPlay

                  $ 10.1   $       $ 10.1  

Net income per share:

                                       

Basic

    N/A                             $ 0.46  

Diluted

    N/A                             $ 0.46  

Weighted-average shares used to compute net loss per share:

                                       

Basic

    N/A                         (5)     22,000,000  

Diluted

    N/A                         (5)     22,000,000  

(a)
Excluding Depreciation and amortization

See accompanying notes to unaudited pro forma condensed consolidated statement of income.

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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

(1)
Reflects the impact of the purchase of an exclusive (subject to certain limited exceptions), perpetual, non-royalty-bearing license from Bally Gaming for intellectual property created or acquired by Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement in any Covered Games, and a non-exclusive, perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates after such third anniversary, for use in our currently available games. So long as the IP License Agreement remains in effect, we do not expect to pay any future royalties or fees for our use of intellectual property owned by Bally Gaming or its affiliates in our currently available games. The amount charged to us for the year ended December 31, 2018 for such royalties and fees was $26.1 million. For a description of the IP License Agreement, see "Certain Relationships and Related Party Transactions—Relationship with Scientific Games—IP License Agreement."

(2)
Reflects an annual commitment fee of 0.500% on the $150.0 million unused portion of the Revolver. For description of our Revolver, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Revolving Credit Facility."

(3)
As a result of the Transactions, SciPlay will be the sole manager of SciPlay Parent LLC, and will have a minority economic interest in SciPlay Parent LLC, but as the sole manager will have all management powers over the business and affairs and will conduct, direct and exercise full control over the activities of SciPlay Parent LLC. Immediately following this offering, the non-controlling interest, representing the members of SciPlay Parent LLC other than SciPlay, will be 82.6% of the outstanding LLC Interests. Net income attributable to the non-controlling interest holders of SciPlay represents 82.6% of net income before income taxes, as well as net income attributable to non-controlling interest holders of SciPlay Parent LLC.

(4)
Following this offering, SciPlay will be subject to U.S. federal and state income tax on its proportionate ownership share of income allocated from SciPlay Parent LLC. SciPlay will not be subject to U.S. federal and state income tax on the portion of domestic income from SciPlay Parent LLC that is allocable to non-controlling interests, thereby reducing SciPlay's income tax expense. This adjustment also reflects income tax impact for adjustments (1) and (2) above, which totaled a pre-tax expense of $6.3 million and benefit of $0.2 million, respectively.

(5)
Weighted-average shares outstanding is based on shares outstanding, which is the number of shares of our Class A common stock expected to be outstanding following this offering. The calculation includes 22,000,000 shares assumed to be sold in this offering as of the date of this offering. The calculation does not consider Class B common stock as these shares do not participate in earnings of SciPlay.

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MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

              The following discussion and analysis should be read in conjunction with "Selected Consolidated Financial and Other Data," "Unaudited Pro Forma Condensed Consolidated Financial Information" and the consolidated financial statements and related notes thereto included elsewhere in this prospectus. This discussion contains forward-looking statements that involve certain risks and uncertainties. Our actual results could differ materially from those discussed in these statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly under the "Risk Factors" and "Special Note Regarding Forward-Looking Statements" sections.

Overview

              We are a leading developer and publisher of digital games on mobile and web platforms. We currently offer seven core games, including social casino games Jackpot Party Casino, Gold Fish Casino, Hot Shot Casino and Quick Hit Slots, and casual games MONOPOLY Slots, Bingo Showdown and 88 Fortunes Slots. Our social casino games typically include slots-style game play and occasionally include table games-style game play, while our casual games blend slots-style or bingo game play with adventure game features. All of our games are offered and played on multiple platforms, including Apple, Google, Facebook and Amazon. In addition to our internally created games, our content library includes recognizable, real-world slot and table games content from Scientific Games. This content allows players who like playing land-based slot machines to enjoy some of those same titles in our free-to-play games. We have access to Scientific Games' library of more than 1,500 iconic casino titles, including titles and content from third-party licensed brands such as JAMES BOND, MONOPOLY, MICHAEL JACKSON, CHEERS and THE GODFATHER.

              We generate substantially all of our revenue from the sale of virtual coins, chips and bingo cards, which players of our games can use to play casino-style slot games and table games and bingo games. Players who install our games receive free virtual coins, cards or chips upon the initial launch of the game and additional free virtual coins, cards or chips at specific time intervals. Players may exhaust the virtual coins, cards or chips that they receive for free and may choose to purchase additional virtual coins, cards or chips in order to extend their time of game play.

              The following timeline illustrates the evolution of our business.

GRAPHIC

Post-Offering Taxation and Expenses

              After consummation of this offering, we will become subject to U.S. federal, state, foreign and local income taxes with respect to our allocable share of any taxable income of SciPlay Parent LLC and will be taxed at the prevailing corporate tax rates. In addition to tax expenses, we also will incur

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expenses related to our operations, plus payments under the TRA, which we expect to be substantial. We intend to cause SciPlay Parent LLC to make distributions in an amount sufficient to allow us to pay our tax obligations and operating expenses, including distributions to fund any ordinary course payments due under the TRA. See "Certain Relationships and Related Party Transactions—SciPlay Parent LLC Agreement—Distributions."

              In addition, as a public company, we will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. We expect to incur additional annual expenses related to these steps and, among other things, additional directors' and officers' liability insurance, director fees, reporting requirements of the SEC, transfer agent fees, increased auditing and legal fees and similar expenses.

Key Performance Indicators and Non-GAAP Measures

              We manage our business by tracking several key performance indicators, each of which is tracked by our internal analytics systems and more fully described below and referred to in our discussion of operating results. Our key performance indicators are impacted by several factors that could cause them to fluctuate on a quarterly basis, such as platform providers' policies, restrictions, seasonality, user connectivity and addition of new content to certain portfolios of games. Future growth in players and engagement will depend on our ability to retain current players, attract new players, launch new games and features and expand into new markets and distribution platforms.

Mobile Penetration

              Mobile penetration is defined as the percentage of total revenue generated from mobile platforms. We believe this indicator provides useful information in understanding revenue generated from mobile platforms such as smartphones and tablets.

Average Monthly Active Users (MAU)

              MAU is defined as the number of individual users who played a game during a particular month. An individual who plays two different games or from two different devices may, in certain circumstances, be counted twice. However, we use third-party data to limit the occurrence of double counting. Average MAU for a period is the average of MAUs for each month for the period presented. We believe this indicator provides useful information in understanding the number of users reached across our portfolio of games on a monthly basis.

Average Daily Active Users (DAU)

              DAU is defined as the number of individual users who played a game on a particular day. An individual who plays two different games or from two different devices may, in certain circumstances, be counted twice. However, we use third-party data to limit the occurrence of double counting. Average DAU for a period is the average of the monthly average DAUs for the period presented. We believe this indicator provides useful information in understanding the number of users reached across our portfolio of games on a daily basis.

Average Revenue Per Daily Active User (ARPDAU)

              ARPDAU is calculated by dividing revenue for the period by the average DAU for the period and then dividing by the number of days in the period. We believe this indicator provides useful information reflecting game monetization.

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AEBITDA and AEBITDA Margin

              AEBITDA and AEBITDA margin, as used herein, are non-GAAP financial measures that are presented as supplemental disclosures and are fully described and reconciled to the most directly comparable GAAP measure in footnote three to "Prospectus Summary—Summary Actual and Pro Forma Consolidated Financial and Other Data."

Comparability of Historical Results and Our Relationship with Scientific Games

              Our consolidated financial statements, which are discussed below, are prepared on a standalone basis in accordance with GAAP and are derived from Scientific Games' consolidated financial statements and accounting records using the historical results of operations and assets and liabilities attributable to our operations, and include charges of expenses from Scientific Games. Our consolidated results are not necessarily indicative of our future performance and do not reflect what our financial performance would have been had we been a standalone public company during the periods presented.

              Scientific Games currently licenses intellectual property and provides certain services to us under an intercompany intellectual property license agreement and intercompany services agreement, and costs associated with these functions have been charged to us and settled in cash pursuant to these agreements. These services and arrangements are more fully described in the section titled "Certain Relationships and Related Party Transactions." We generally expect to continue to use these services following the completion of this offering, depending on the type of the service and the location at which such service is provided, pursuant to the new Intercompany Services Agreement we will enter into in connection with this offering. Management believes the basis on which the expenses have been charged to be a reasonable reflection of the utilization of services provided to, or the benefit received by, us during the periods presented. However, these charges may not necessarily be indicative of the actual expenses we would have incurred as an independent company during the periods presented and prior to this offering or of the costs we will incur in the future. As part of the Transactions and pursuant to the terms of the IP License Agreement, we will acquire an exclusive (subject to certain limited exceptions), perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement in any Covered Games, and a non-exclusive, perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates after such third anniversary, for use in our currently available games. Under the terms of the IP License Agreement, we will receive an exclusive (subject to certain limited exceptions) license to use such third-party intellectual property licensed to Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement, to the extent permitted to be sublicensed to us, in any of the Covered Games and a non-exclusive license to use third-party intellectual property licensed to Bally Gaming or its affiliates after the third anniversary of the date of the IP License Agreement, to the extent permitted to be sublicensed to us, but only in our currently available games. Under the IP License Agreement, we will be required to pay to Bally Gaming all costs, fees and expenses related to such third-party licenses, including proportionate pass-through expenses, such as our allocable share of minimum guarantees to the owners of such intellectual property. So long as the IP License Agreement remains in effect, we do not expect to pay any future royalties or fees for our use of intellectual property owned by Bally Gaming or its affiliates in our currently available games. The amount charged to us for the years ended December 31, 2018 and 2017 for such royalties and fees was $26.1 million and $23.6 million, respectively.

              Following the completion of this offering, we will be subject to the reporting requirements of the Exchange Act. We will be required to establish procedures and practices as a standalone public company in order to comply with our obligations under the Exchange Act and related rules and regulations. As a result, we will incur additional costs, including internal audit, investor relations, stock

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administration and regulatory compliance costs. These additional costs may differ from the costs that were historically charged to us from Scientific Games.

Components of Our Results of Operations

Revenue

              We generate substantially all of our revenue from the sale of virtual coins, chips and bingo cards, which players of our games can use to play slot games, table games and bingo games. Revenue from the sale of virtual coins, chips and bingo cards is generated on mobile and web platforms. Other revenue primarily represents advertising revenue, which is currently an insignificant portion of our total revenue. We expect our overall revenue to continue to grow as we continue to increase our market share and execute our strategy (described elsewhere in this prospectus). As player platform preferences change and continue to migrate to mobile, we expect revenue generated on web platforms to continue to decline.

Operating Expenses

              Operating expenses consist primarily of cost of revenue, sales and marketing expenses, general and administrative expenses, R&D, D&A, contingent acquisition consideration, and restructuring and other expenses, each more fully described below. D&A expense is excluded from cost of revenue and other operating expenses, and is separately presented on the consolidated statements of income and comprehensive income.

Cost of Revenue

              Cost of revenue consists primarily of fees paid to platform providers such as Facebook, Google, Apple and Amazon, which generally represent 30% of revenue, and licensing fees, which includes intellectual property royalties paid to both affiliated and unaffiliated third parties, and other direct expenses incurred to generate revenue. We expect the aggregate amount of cost of revenue to increase for the foreseeable future as we grow our revenue and expand our business.

Sales and Marketing

              Sales and marketing expenses consist primarily of advertising costs related to marketing and player acquisition and retention, salaries and benefits for our sales and marketing employees and fees paid to consultants. We intend to continue to invest in sales and marketing to grow our player base both for our existing games and future games we may deploy. As a result, we expect the aggregate amount of sales and marketing expenses to increase for the foreseeable future as we grow our revenues and business and deploy new games. As deployed games mature, we generally expect sales and marketing expenses as a percentage of revenue attributable to such games to decrease.

General and Administrative

              General and administrative expenses consist primarily of salaries, benefits, and stock-based compensation for our executives, finance, information technology, human resources and other administrative employees, and includes administrative parent services (see Note 9 to the consolidated financial statements of SG Social Holding Company II, LLC, which are included in this prospectus). In addition, general and administrative expenses include outside consulting, legal and accounting services, facilities and other supporting overhead costs not allocated to other departments. We expect that our aggregate amount of general and administrative expenses will increase for the foreseeable future as we continue to grow our business and incur additional expenses associated with being a publicly traded company.

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R&D

              R&D expenses consist primarily of costs associated with game development, such as associated salaries, benefits, facilities and other supporting overhead costs associated with game development. Continued investment in enhancing existing games and developing new games is important to attaining our strategic objectives. As a result, we expect the aggregate amount of R&D expenses to increase for the foreseeable future as we grow our business, focus on retention of our development team and grow our facilities.

Contingent Acquisition Consideration

              Contingent acquisition consideration expense consists of incremental consideration to be paid to former owners of businesses we acquired the amount of which exceeds the acquisition date estimation. As described in Note 1 to the audited consolidated financial statements of SG Social Holding Company II, LLC, which are included elsewhere in this prospectus, when an acquisition includes future consideration to be paid to previous owners of those businesses we have acquired, we estimate the fair value of the future payments and record the acquisition-date fair value as a component of the purchase price. We monitor such arrangements and evaluate them when conditions change. Any adjustments subsequent to the acquisition date estimate are recorded as contingent acquisition consideration expense. Because such expense is based on our current expectations of the future results of the acquired businesses, any adjustments are recorded if our expectations for the future change. Although we currently do not have any expectation that we will incur future contingent acquisition consideration, other than ongoing remeasurement of Spicerack contingent acquisition consideration, any such expenses will be dependent on future merger and acquisition activities and terms of those arrangements.

Restructuring and Other

              Our restructuring and other expenses include charges or expenses attributable to: (i) employee severance; (ii) management restructuring and related costs; (iii) restructuring and integration; (iv) cost savings initiatives; and (v) acquisition related and other unusual items other than contingent acquisition consideration. Restructuring and other expenses will increase or decrease based on management actions and/or occurrence of charges described herein and could materially change in the future depending on costs associated with the Transactions.

Results of Operations

Summarized Results of Operations

 
  Year Ended
December 31,
  Variance  
($ in millions)
  2018   2017   2018 vs. 2017  

Revenue

  $ 416.2   $ 361.4   $ 54.8     15 %

Operating expenses

    369.8     313.6     56.2     18 %

Operating income

    46.4     47.8     (1.4 )   (3 )%

Net income(2)

    39.0     23.1     15.9     69 %

AEBITDA(1)(2)

  $ 94.0   $ 69.4   $ 24.6     35 %

Net income margin

    9.4 %   6.4 %   3.0pp     nm  

AEBITDA margin

    22.6 %   19.2 %   3.4pp     nm  

(1)
For a reconciliation of net income to AEBITDA, see footnote three to the information contained in "Prospectus Summary—Summary Actual and Pro Forma Consolidated Financial and Other Data."

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(2)
Includes intellectual property royalties paid to Scientific Games for use of its intellectual property. See "Certain Relationships and Related Party Transactions—Relationship with Scientific Games—Historical Relationship with Scientific Games." Under the terms of the IP License Agreement, we will acquire an exclusive (subject to certain limited exceptions), perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement in any Covered Games, and a non-exclusive, perpetual, non-royalty-bearing license for intellectual property created or acquired by Bally Gaming or its affiliates after such third anniversary, for use in our currently available games. So long as the IP License Agreement remains in effect, we do not expect to pay any future royalties or fees for our use of intellectual property owned by Bally Gaming or its affiliates in our currently available games. The amount charged to us for the years ended December 31, 2018 and 2017 for such royalties and fees was $26.1 million and $23.6 million, respectively, which are included in cost of revenue. Under the terms of the IP License Agreement, we will receive an exclusive (subject to certain limited exceptions) license to use such third-party intellectual property licensed to Bally Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement, to the extent permitted to be sublicensed to us, in any of the Covered Games and a non-exclusive license to use third-party intellectual property licensed to Bally Gaming or its affiliates after the third anniversary of the date of the IP License Agreement, to the extent permitted to be sublicensed to us, but only in our currently available games. Under the IP License Agreement, we will be required to pay to Bally Gaming all costs, fees and expenses related to such third-party licenses, including proportionate pass-through expenses, such as our allocable share of minimum guarantees to the owners of such intellectual property.

nm = not meaningful.

pp = percentage points.

      Revenue and Key Performance Indicators

 
  Year Ended
December 31,
  Variance  
($ in millions)
  2018   2017   2018 vs. 2017  

Revenue:

                         

Mobile

  $ 323.3   $ 259.6   $ 63.7     25 %

Web

    92.8     99.6     (6.8 )   (7 )%

Other

    0.1     2.2     (2.1 )   (95 )%

Total revenue

  $ 416.2   $ 361.4   $ 54.8     15 %

      Revenue information by geography is summarized as follows:

 
  Year Ended
December 31,
  Variance  
($ in millions)
  2018   2017   2018 vs. 2017  

U.S. 

  $ 380.3   $ 327.4   $ 52.9     16 %

International

    35.9     34.0     1.9     6 %

Total revenue

  $ 416.2   $ 361.4   $ 54.8     15 %

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  Year Ended
December 31,
  Variance  
(in millions, except ARPDAU and percentages)
  2018   2017   2018 vs. 2017  

Key Performance Indicators:

                         

Mobile Penetration

    78 %   72 %   6pp     nm  

Average MAU

    8.3     7.6     0.7     9 %

Average DAU

    2.6     2.5     0.1     4 %

ARPDAU

  $ 0.43   $ 0.40   $ 0.03     8 %

nm = not meaningful.

pp = percentage points.

              Mobile platform revenue increased primarily due to Bingo Showdown, the ongoing popularity of Quick Hit Slots, 88 Fortunes Slots, Goldfish Casino, Jackpot Party Casino and the recently launched MONOPOLY Slots, which collectively represented $68.2 million of the revenue increase, which was partially offset by a decline in revenue from other games for which marketing efforts have been reduced. Revenue for 2017 included only nine months of revenue from Bingo Showdown following our acquisition of Spicerack in April 2017.

              Web platform revenue decreased due to a decline in player levels on those platforms, and the negative impact of privacy code changes implemented during the second quarter of 2018 by one of our platform providers, which created connectivity issues that were subsequently resolved in the third quarter of 2018.

              Bingo Showdown generated $33.1 million and $13.8 million of revenue in 2018 and 2017, respectively.

              The increase in mobile penetration percentage is primarily reflective of a continued trend of players migrating from web to mobile platforms to play our games. Average MAU and DAU increased due to the growing popularity of our games driving our revenue growth disclosed above, while ARPDAU primarily increased due to more payers.

      Other Metrics

              Although we primarily focus on the key performance indicators disclosed above, we also monitor periodic trends in the number of players who make a purchase. The table below shows average monthly paying users, or MPUs, average monthly revenue per payer and payer conversion rate.

 
  Year Ended
December 31,
 
 
  2018   2017  

Average MPUs (in millions)(1)

    0.5     0.4  

Average monthly revenue per payer(2)

  $ 76.25   $ 73.66  

Payer conversion rate(3)

    5.5 %   5.3 %

(1)
We define average MPUs as the average number of players who made a purchase at least once in a month during the applicable time period. However, because we do not always have the third-party data necessary to link an individual who has paid under multiple user accounts in a 30-day period, a player who has paid using multiple user accounts may be counted as multiple MPUs.

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(2)
Average monthly revenue per payer is calculated by dividing average monthly revenue for the applicable time period by average MPUs for the applicable time period.

(3)
Payer conversion rate represents average MPUs divided by average MAU for the applicable time period.

              The increase in average MPUs, average monthly revenue per payer and payer conversion rate were due to the growing popularity of our games and the increased interaction with the games by our players as a result of the introduction of new content and features into our games.

Operating Expenses

 
  Year Ended
December 31,
  Variance
Amount
  Percentage of Revenue
 
   
   
  2018 vs. 2017
Change
($ in millions)
  2018   2017   2018 vs. 2017   2018   2017

Operating expenses:

                                       

Cost of revenue(1)(2)

  $ 160.4   $ 138.6   $ 21.8     16 %   38.5 %   38.4 % 0.lpp

Sales and marketing(1)

    105.7     86.7     19.0     22 %   25.4 %   24.0 % 1.4pp

General and administrative(1)

    34.5     44.5     (10.0 )   (22 )%   8.3 %   12.3 % (4.0)pp

R&D(1)

    25.6     26.5     (0.9 )   (3 )%   6.2 %   7.3 % (1.1)pp

D&A

    15.1     17.0     (1.9 )   (11 )%         nm