0001760717-21-000008 | 10-K | XBRL Viewer

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COVER PAGE - USD ($)	12 Months Ended
COVER PAGE - USD ($)	Dec. 31, 2020	Feb. 20, 2021	Jun. 30, 2020
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Document Transition Report	false
Entity File Number	001-38889
Entity Registrant Name	SciPlay Corporation
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	83-2692460
Entity Address, Address Line One	6601 Bermuda Road
Entity Address, City or Town	Las Vegas
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89119
City Area Code	702
Local Phone Number	897-7150
Title of 12(b) Security	Class A Common Stock, $.001 par value
Trading Symbol	SCPL
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 334,866,057
Documents Incorporated by Reference	Portions of the registrant’s proxy statement relating to the 2021 annual meeting of stockholders are incorporated by reference in Part III. The proxy statement will be filed with the Securities and Exchange Commission no later than 120 days after the conclusion of the registrant’s fiscal year ended December 31, 2020.
Amendment Flag	false
Entity Central Index Key	0001760717
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Class A common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		22,861,693
Class B common stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		103,547,021

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Statement [Abstract]
Revenue	$ 582.2	$ 465.8	$ 416.2
Operating expenses:
Cost of revenue(1)	185.3	158.5	160.4
Sales and marketing(1)	130.7	129.7	105.7
General and administrative(1)	66.2	40.6	34.5
Research and development(1)	33.3	23.6	25.6
Depreciation and amortization	9.7	7.0	15.1
Contingent acquisition consideration	0.0	1.7	27.5
Restructuring and other	2.0	1.0	1.0
Operating income	155.0	103.7	46.4
Other (expense) income:
Other (expense) income, net	(0.6)	(1.5)	3.0
Total other (expense) income, net	(0.6)	(1.5)	3.0
Net income before income taxes	154.4	102.2	49.4
Income tax expense	8.4	8.7	10.4
Net income	146.0	93.5	39.0
Less: Net income attributable to the noncontrolling interest	125.1	61.1	0.0
Net income attributable to SciPlay	$ 20.9	$ 32.4	$ 39.0
Basic and diluted net income attributable to SciPlay per share(2):
Basic	$ 0.92	$ 0.53
Diluted	$ 0.86	$ 0.53
Weighted average number of shares of Class A common stock used in per share calculation:
Basic shares	22.8	22.7
Diluted shares	24.4	22.7

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 146.0	$ 93.5	$ 39.0
Other comprehensive income:
Foreign currency translation gain (loss), net of tax	3.1	3.4	(3.8)
Total comprehensive income	149.1	96.9	35.2
Less: comprehensive income attributable to the noncontrolling interest	127.6	62.4	0.0
Comprehensive income attributable to SciPlay	$ 21.5	$ 34.5	$ 35.2

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income (loss) and other comprehensive income (loss), attributable to noncontrolling interests. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

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+ Details

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Dec. 31, 2020	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 268.9		$ 110.6
Accounts receivable, net (allowance for doubtful accounts of $—)	36.6		32.1
Prepaid expenses and other current assets	5.9		4.3
Total current assets	311.4		147.0
Non-current assets:
Property and equipment, net	4.4		4.6
Operating lease right-of-use assets	8.5		6.0
Goodwill	129.8		120.7
Intangible assets and software, net	30.3		17.0
Deferred income taxes	82.5		87.1
Other assets	1.9		2.2
Total assets	568.8		384.6
Current liabilities:
Accounts payable	23.2		12.8
Accrued liabilities	22.9		13.7
Due to affiliate	5.5		2.7
Total current liabilities	51.6		29.2
Operating lease liabilities	7.5		5.2
Liabilities under the TRA	68.5		72.7
Other long‑term liabilities	5.7		0.0
Total liabilities	133.3		107.1
Commitments and contingencies (see Note 11)
Stockholders’ equity:
Additional paid-in capital	46.1		41.7
Retained earnings	32.9		12.0
Accumulated other comprehensive income (loss)	0.9		0.3
Total SciPlay stockholders’ equity	80.0		54.1
Noncontrolling interest	355.5		223.4
Total stockholders’ equity	435.5		277.5
Total liabilities and stockholders’ equity	$ 568.8		384.6
Class A common stock, par value $0.001 per share, 625.0 shares authorized, 22.8 and 22.7 shares issued and outstanding as of December 31, 2020 and 2019, respectively.
Stockholders’ equity:
Common stock		0.0	0.0
Class B common stock, par value $0.001 per share, 130.0 shares authorized, 103.5 and 103.5 shares issued and outstanding as of December 31, 2020 and 2019, respectively.
Stockholders’ equity:
Common stock		$ 0.1	$ 0.1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2020	Dec. 31, 2019
Allowance for doubtful accounts	$ 0.0	$ 0.0
Class A common stock, par value $0.001 per share, 625.0 shares authorized, 22.8 and 22.7 shares issued and outstanding as of December 31, 2020 and 2019, respectively.
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	625,000,000.0	625,000,000.0
Common stock, shares issued (in shares)	22,800,000	22,700,000
Common stock, shares outstanding (in shares)	22,800,000
Class B common stock, par value $0.001 per share, 130.0 shares authorized, 103.5 and 103.5 shares issued and outstanding as of December 31, 2020 and 2019, respectively.
Common stock, shares authorized (in shares)	130,000,000.0	130,000,000.0
Common stock, shares issued (in shares)	103,500,000	103,500,000
Common stock, shares outstanding (in shares)	103,500,000	103,500,000

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY/ACCUMULATED NET PARENT INVESTMENT - USD ($) shares in Thousands, $ in Millions	Total	Accumulated net parent investment	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Noncontrolling interest	Class A common stock	Class A common stock Common Stock	Class A common stock Additional paid-in capital	Class A common stock Noncontrolling interest	Class B common stock	Class B common stock Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Additional paid-in capital	$ 0.0
Noncontrolling interest	0.0
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	163.0	$ 161.4						$ 0.0				$ 0.0
Accumulated other comprehensive income (loss)	1.6
Retained earnings	0.0
Stockholders' equity, beginning balance at Dec. 31, 2017	163.0	161.4						$ 0.0				$ 0.0
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2017								0				0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	39.0	39.0
Distributions to Parent and affiliates, net	77.9
Currency translation adjustment	(3.8)				$ (3.8)
Stockholders' equity, ending balance at Dec. 31, 2018	138.6	140.8						$ 0.0				$ 0.0
Stockholders' equity, ending balance (in shares) at Dec. 31, 2018								0				0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Distributions to Scientific Games and affiliates, net	(77.9)
Net income	39.0
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	138.6	140.8						$ 0.0				$ 0.0
Dividend distributions	(77.9)	(77.9)
Transactions with Parent and affiliates, net	18.3	18.3
Additional paid-in capital	0.0
Noncontrolling interest	0.0
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	138.6	140.8						0.0				0.0
Accumulated other comprehensive income (loss)	(2.2)
Retained earnings	0.0
Net income	20.4	20.4
Currency translation adjustment	1.9				1.9
Stockholders' equity, ending balance at May. 07, 2019	170.1	170.4						$ 0.0				$ 0.0
Stockholders' equity, ending balance (in shares) at May. 07, 2019								0				0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	170.1	170.4						$ 0.0				$ 0.0
Transactions with Parent and affiliates, net	9.2	9.2
Stockholders' equity, beginning balance at Dec. 31, 2018	138.6	140.8						$ 0.0				$ 0.0
Stockholders' equity, beginning balance (in shares) at Dec. 31, 2018								0				0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	93.5
Distributions to Parent and affiliates, net	311.7
Stockholders' equity, ending balance at Dec. 31, 2019	277.5	0.0						$ 0.0				$ 0.1
Stockholders' equity, ending balance (in shares) at Dec. 31, 2019								22,700				103,500
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Distributions to Scientific Games and affiliates, net	(311.7)
Net income	32.4
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	138.6	0.0						$ 0.0				$ 0.1
Additional paid-in capital	0.0
Noncontrolling interest	0.0
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	170.1	170.4						0.0				0.0
Accumulated other comprehensive income (loss)	(0.3)
Retained earnings	0.0
Stockholders' equity, beginning balance at May. 07, 2019	170.1	170.4						$ 0.0				$ 0.0
Stockholders' equity, beginning balance (in shares) at May. 07, 2019								0				0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	73.1			$ 12.0		$ 61.1
Issuance of common stock (in shares)								22,700				103,500
Distributions to Parent and affiliates, net	(311.7)	0.0	$ (56.1)			(255.6)
Currency translation adjustment	1.3		0.1		0.4	0.8
Stockholders' equity, ending balance at Dec. 31, 2019	277.5	0.0						$ 0.0				$ 0.1
Stockholders' equity, ending balance (in shares) at Dec. 31, 2019								22,700				103,500
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Distributions to Scientific Games and affiliates, net	311.7	0.0	56.1			255.6
Net income				12.0
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	170.1	0.0						$ 0.0				$ 0.1
Shares offered in public offering (in shares)								22,700				103,500
Issuance of common stock							$ 332.8		$ 59.9	$ 272.9	$ 0.1	$ 0.1
Allocation of SGC equity to noncontrolling interests	0.0	(170.4)	30.7		0.2	139.5
Stock-based compensation	6.2		1.5			4.7
Net effect of tax-related organization transactions and other	5.6	0.0	5.6
Additional paid-in capital	41.7
Noncontrolling interest	223.4
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	277.5	0.0						$ 0.0				0.1
Accumulated other comprehensive income (loss)	0.3
Retained earnings	12.0
Net income	146.0			$ 20.9		125.1
Distributions to Parent and affiliates, net	(12.8)					(12.8)
Currency translation adjustment					$ 0.6	2.5
Stockholders' equity, ending balance at Dec. 31, 2020	435.5	0.0						$ 0.0				$ 0.1
Stockholders' equity, ending balance (in shares) at Dec. 31, 2020								22,800				103,500
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Distributions to Scientific Games and affiliates, net	12.8					12.8
Net income	20.9
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	$ 277.5	0.0						$ 0.0				$ 0.1
Stock Redeemed or Called During Period, Value	(100)
Stock-based compensation			$ 4.5			$ 17.5
Shares Issued, Shares, Share-based Payment Arrangement, after Forfeiture	100
Additional paid-in capital	$ 46.1
Noncontrolling interest	355.5
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	435.5	$ 0.0						$ 0.0				$ 0.1
Accumulated other comprehensive income (loss)	0.9
Retained earnings	$ 32.9

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net income	$ 146.0	$ 93.5	$ 39.0
Depreciation and amortization	9.7	7.0	15.1
Contingent acquisition consideration	0.0	1.7	27.5
Increase (Decrease) in Deferred Income Taxes	4.3	(0.5)	(6.0)
Share-based Payment Arrangement, Expense	22.0	8.9	4.0
Operating expenses paid by Parent and affiliates	0.0	7.2	14.4
Cash paid for contingent consideration included in operating activities	(4.0)	(25.2)	0.0
Increase (Decrease) in Accounts Receivable	(3.9)	(0.4)	2.2
Increase (Decrease) in Prepaid Expense and Other Assets	(0.8)	1.7	2.1
Increase (Decrease) in Accounts Payable and Accrued Liabilities	17.2	(3.9)	(14.8)
Increase (Decrease) in Due to Affiliates	2.9	3.0	(6.6)
Net cash provided by operating activities	193.4	93.0	76.9
Cash flows from investing activities:
Capital expenditures	(7.1)	(8.8)	(3.5)
Payments to Acquire Businesses, Gross	(12.6)	0.0	0.0
Net cash used in investing activities	(19.7)	(8.8)	(3.5)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Distributions To Parent And Affiliates (Operating Activity), Net	(12.4)
Distributions to Parent and affiliates, net	(12.8)	311.7	77.9
Payments of deferred offering costs	0.0	(9.3)	(0.6)
Payments of contingent acquisition consideration	(0.5)	(1.8)	0.0
Payments under tax receivable agreement	(2.5)	0.0	0.0
Payments on license obligations	(0.3)	(2.0)	(1.0)
Net redemptions of common stock under stock-based compensation plans	(0.3)	0.0	0.0
Payments of debt issuance costs	0.0	(1.1)	0.0
Net cash (used in) provided by financing activities	(16.0)	15.9	(79.5)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	0.6	0.5	(0.7)
Increase (decrease) in cash, cash equivalents and restricted cash	158.3	100.6	(6.8)
Cash, cash equivalents and restricted cash, beginning of period	110.6	10.0	16.8
Cash, cash equivalents and restricted cash, end of period	268.9	110.6	10.0
Supplemental cash flow information:
Cash paid for income taxes	2.0	1.5	1.8
Payment for Scientific Games’ intellectual property license included in Distributions to Scientific Games and affiliates, net	0.0	255.0	0.0
Noncash Deferred Offering Costs	0.0	0.0	1.9
Class A common stock
Net Cash Provided by (Used in) Financing Activities [Abstract]
Net proceeds from issuance of common stock	0.0	341.7	0.0
Class B common stock
Net Cash Provided by (Used in) Financing Activities [Abstract]
Net proceeds from issuance of common stock	$ 0.0	$ 0.1	$ 0.0

Description of the Business and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of the Business and Summary of Significant Accounting Policies

Background and Nature of Operations

SciPlay Corporation was formed as a Nevada corporation on November 30, 2018 as a subsidiary of Scientific Games Corporation (“Scientific Games”, “SGC”, and “the Parent”) for the purpose of completing a public offering and related transactions (collectively referred to herein as the “IPO”) in order to carry on the business of SciPlay Parent LLC and its subsidiaries (collectively referred to as “SciPlay”, the “Company”, “we”, “us”, and “our”). As the managing member of SciPlay Parent LLC, SciPlay operates and controls all of the business affairs of SciPlay Parent LLC and its subsidiaries.

We develop, market and operate a portfolio of social games played on various mobile and web platforms, including Jackpot Party Casino, Quick Hit Slots, Gold Fish Casino, Hot Shot Casino, Bingo Showdown, MONOPOLY Slots, and 88 Fortunes Slots and a solitaire social game targeted toward casual game players, among others. Our games are available in various formats. We have one operating segment with one business activity, developing and monetizing social games.

Initial Public Offering

On May 7, 2019, we completed the offering of 22,720,000 shares of Class A common stock at a public offering price of $16.00 per share, after giving effect to the underwriters’ partial exercise of their over-allotment option on June 4, 2019. We received $341.7 million in proceeds, net of underwriting discount, but before offering expenses of $9.3 million.

In connection with the closing of the IPO and partial exercise of over-allotment option, we consummated the following organizational transactions:

•We amended and restated the SciPlay Parent LLC Operating Agreement (the “Operating Agreement”) to, among other things:

(i) provide for a single class of SciPlay Parent LLC common units (the “LLC Interests”);

(ii) exchange all of SG Social Holding Company I, LLC’s (“SG Holding I”) and SG Social Holding Company, LLC’s (each a wholly owned subsidiary of Scientific Games and collectively, 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.

•We amended and restated our articles of incorporation to, among other things, provide for Class A common stock and Class B common stock;

•We used the net proceeds from the IPO and underwriters’ exercise of the over-allotment option after deducting the underwriting discount, as follows:


	Amount		Note
To acquire 20,725,319 LLC Interests from SG Holding I	$	311.7	(A)
To acquire 1,994,681 newly issued LLC Interests from SciPlay Parent LLC	30.0		(B)
Net proceeds after deducting underwriting discount	$	341.7

(A) SG Holding I subsequently used these proceeds as follows:
Acquire IP License from Parent (“Upfront License Payment”)(1)	$	255.0
Distributed as a dividend to Scientific Games	56.7
	$	311.7
(B) SciPlay Parent LLC subsequently used the proceeds as follows:
Fees and expenses incurred in connection with the IPO	$	9.3
General corporate purposes, including a portion of contingent acquisition consideration	20.7
	$	30.0
(1) Per the Assignment Agreement, dated May 7, 2019, SG Holding I assigned its rights, duties, obligations and interest under the IP License Agreement to SciPlay.

•We issued 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 IPO;

•As a result of the transactions described above, the SG Members owned 82.0% of the outstanding shares and LLC Interests and 97.9% of the combined voting power; and

•We and the SG Members entered into the TRA, and we and the SG Members entered into the registration rights agreement, dated May 7, 2019 (“Registration Rights Agreement”).

Our corporate structure following the IPO 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 allows 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 IPO. 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 exchange or redeem 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.

We also 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. The TRA provides 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 the IPO, (b) resulting from any redemptions or exchanges of LLC Interests pursuant to the Operating 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.

Variable Interest Entities (“VIE”) and Consolidation

Subsequent to the IPO, our sole material asset is our member’s interest in SciPlay Parent LLC. In accordance with the Operating Agreement of SciPlay Parent LLC, we have all management powers over the business and affairs of SciPlay Parent LLC and to conduct, direct and exercise full control over the activities of SciPlay Parent LLC. Class A common stock issued in the IPO do not hold majority voting rights but hold 100% of the economic interest in the Company, which results in SciPlay Parent LLC being considered a VIE. Due to our power to control the activities most directly affecting the results of

SciPlay Parent LLC, we are considered the primary beneficiary of the VIE. Accordingly, beginning with the IPO, we consolidate the financial results of SciPlay Parent LLC and its subsidiaries.

Basis of Presentation

The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”). SG Social Holding Company II, LLC is SciPlay’s predecessor for financial reporting purposes, and accordingly, for all periods presented prior to May 7, 2019, the financial statements represent the financial statements of the predecessor. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and the accompanying notes. Actual results may differ materially from our estimates.

Cash and Cash Equivalents

Cash and cash equivalents include all cash balances and highly liquid investments with original maturities of three months or less. We place our temporary cash investments with high credit quality financial institutions. At times, such investments in U.S. accounts may be in excess of the Federal Deposit Insurance Corporation insurance limit. We had $5.6 million and $8.0 million held in foreign currency and foreign bank accounts as of December 31, 2020 and December 31, 2019, respectively.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any estimated uncollectible amounts. We review accounts receivable regularly and make estimates for the allowance for doubtful accounts when there is doubt as to our ability to collect individual balances. In evaluating our ability to collect outstanding receivable balances, we consider many factors, including the age of the balance, the platform provider's payment history and current creditworthiness, and current economic trends. Bad debts are written off after all collection efforts have ceased. We do not require collateral from our platform providers.

We had no allowance for doubtful accounts as of December 31, 2020 and December 31, 2019 and had no significant write-offs or recoveries during the years ended December 31, 2020, 2019 and 2018.

Long-Lived Assets and Finite-Lived Intangible Assets

We assess the recoverability of our other long-term assets (including intangibles) with finite lives whenever events arise or circumstances change that indicate the carrying value of the asset may not be recoverable. Recoverability of long-lived assets (or asset groups) to be held and used is measured by a comparison of the carrying amount of the asset (or asset group) to the expected net future undiscounted cash flows to be generated by that asset (or asset group).

The amount of impairment of other long-lived assets and intangible assets with finite lives is measured by the amount by which the carrying amount of the asset exceeds the fair market value of the asset.

Revenue Recognition

We generate revenue from the sale of coins, chips and cards, which players can use to play casino-style slot games, table games and bingo games (i.e., spin in the case of slot games, bet in the case of table games and use of bingo cards in the case of bingo games). We distribute our games through various global social web and mobile platforms such as Facebook, Apple, Google, Amazon, and Microsoft. The games are primarily WMS, Bally, Barcrest™, and SHFL branded games. In addition, we also offer third-party branded games and original content.

Disaggregation of Revenue

We believe disaggregation of our revenue on the basis of platform and geographical locations of our players is appropriate because the nature and the number of players generating revenue could vary on such basis, which represent different economic risk profiles.

The following table presents our revenue disaggregated by type of platform:


	Years Ended December 31,
	2020		2019		2018
Mobile	$	505.9	$	391.0	$	323.3


Web and other	76.3		74.8		92.9
Total revenue	$	582.2	$	465.8	$	416.2

The following table presents our revenue disaggregated based on the geographical location of our players:


	Years Ended December 31,
	2020(1)		2019(1)		2018(1)
North America (2)	$	533.3	$	422.4	$	380.3
International	48.9		43.4		35.9
Total revenue	$	582.2	$	465.8	$	416.2
(1) For the years ended December 31, 2020 and 2019, North America revenue includes revenue derived from the U.S., Canada, and Mexico. As a result of enhancements in the technologies and processes we use to obtain customer data, beginning with the first quarter of 2019, geographical location is now determined based on player location as reported by the platform provider. Accordingly, we recast 2019 to align with current year presentation. 2018 revenue continues to be disaggregated between the U.S. and International as we did not have the ability to recast revenue. (2) For the years ended December 31, 2020, 2019, and 2018, U.S. revenue was $496.0 million, $395.3 million, and $380.3 million, respectively.

General

Our social and mobile games operate on a free-to-play model, whereby game players may collect coins, chips or cards free of charge through the passage of time or through targeted marketing promotions. If a game player wishes to obtain coins, chips or cards above and beyond the level of free coins, chips or cards available to that player, the player may purchase additional coins, chips or cards. Once a purchase is completed, the coins, chips or cards are deposited into the player's account and are not separately identifiable from previously purchased coins, chips or cards or coins, chips and cards obtained by the game player for free. Once obtained, coins, chips or cards (either free or purchased) cannot be redeemed for cash nor exchanged for anything other than game play within our apps. When coins, chips or cards are played in the games, the game player could "win" and would be awarded additional coins, chips or cards, or could "lose" and lose the future use of those coins, chips or cards. We have concluded that coins, chips and cards represent consumable goods, because the game player does not receive any additional benefit from the games and is not entitled to any additional rights once the coins, chips or cards are substantially consumed.

Control transfers and we recognize revenues from player purchases of coins, chips and cards as the coins, chips or cards are consumed for game play. We determined through a review of play behavior that game players generally do not purchase additional coins, chips and cards until their existing coins, chips and cards balances have been substantially consumed. As we are able to track the duration between purchases of coins, chips and cards for individual game players for specific games, we are able to reliably estimate the period of time over which coins, chips and cards are consumed. Accordingly, for most games, we recognize revenue using an item-based revenue model.

We estimate the amount of outstanding purchased coins, chips and cards at period end based on customer behavior, because we are unable to distinguish between the consumption of purchased or free coins, chips and cards. Based on an analysis of the customers' historical play behavior, the timing difference between when coins, chips or cards are purchased by a customer and when those coins, chips or cards are consumed in game play is relatively short.

For games where we are unable to track the duration between purchases of coins, chips or cards for individual game players, we are able to reliably estimate the average player life. Accordingly, we recognize revenue using a user-based revenue model. Future usage patterns may differ from historical usage patterns and therefore the estimated average playing periods may change in the future.

We continuously gather and analyze detailed customer play behavior and assess this data in relation to our judgments used for revenue recognition.

Contract Assets, Contract Liabilities and Other Disclosures

We receive customer payments based on the payment terms established in our contracts. Payment for the purchase of coins, chips and cards is made at purchase, and such payments are non-refundable in accordance with our standard terms of service. Such payments are initially recorded as a contract liability, and revenue is subsequently recognized as we satisfy our performance obligations.

The following table summarizes our opening and closing balances in contract assets, contract liabilities and accounts receivable:


	Accounts Receivable		Contract Assets(1)		Contract Liabilities(2)





Balance as of January 1, 2020	$	32.1	$	0.2	$	0.6
Balance as of December 31, 2020	36.6		0.2		0.6
(1) Contract assets are included within Prepaid expenses and other current assets in our consolidated balance sheets. (2) Contract liabilities are included within Accrued liabilities in our consolidated balance sheets.

During the years ended December 31, 2020 and 2019, we recognized $0.6 million and $0.7 million, respectively, of revenue that was included in the respective period beginning contract liability balance. Substantially all of our unsatisfied performance obligations relate to contracts with an original expected length of one year or less.

Principal-Agent Considerations

Our games are played on various third-party platforms for which the platform providers collect proceeds from our customers and pay us an amount after deducting a platform fee. Because we have control over the content and functionality of games before they are accessed by the end user, we have determined we are the principal and, as a result, revenues are recorded on a gross basis. Payment processing fees paid to platform providers (such as Facebook, Apple, Amazon, Google and Microsoft) are recorded within cost of revenue.

Concentration of Credit Risk

Our revenue and accounts receivable are generated via certain platform providers, which subject us to a concentration of credit risk. The following tables summarize the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable:


	Revenue Concentration						Accounts Receivable Concentration
	Years Ended December 31,						As of December 31,
	2020		2019		2018		2020		2019
Apple	46.3	%	44.8	%	41.7	%	49.2	%	42.7	%
Google	37.1	%	35.9	%	32.3	%	35.4	%	33.1	%
Facebook	13.1	%	16.7	%	22.1	%	11.5	%	20.9	%

Cost of Revenue

Amounts recorded as cost of revenue relate to direct expenses incurred in order to generate social gaming revenue.

Such costs are recorded as incurred, and primarily consist of fees withheld by our platform providers from the player proceeds received by the platform providers on our behalf and licensing fees.

Depreciation and amortization expense is excluded from cost of revenue and other operating expenses and is separately presented on the consolidated statements of income.

Advertising Cost

The cost of advertising is expensed as incurred and totaled $123.0 million, $123.6 million and $100.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. Advertising costs primarily consist of marketing and player acquisition and retention costs and are included in Sales and marketing expenses.

Research and Development (R&D)

R&D costs relate primarily to employee costs associated with game development and enhancement costs that do not meet internal-use software capitalization criteria. Such costs are expensed as incurred.

Contingent Acquisition Consideration

Our contingent consideration liability is recorded at fair value on the acquisition date as part of the consideration transferred and is remeasured each reporting period. The changes in fair value of contingent acquisition consideration as a result of remeasurement are included in Contingent acquisition consideration expenses. The inputs used to measure the fair value of the Contingent acquisition consideration liability primarily consist of projected earnings‑based measures and probability of achievement (categorized as Level 3 in the fair value hierarchy as established by ASC 820).

During the second quarter of 2019, we agreed with the SpiceRack selling shareholders to pay them $31.0 million in total contingent acquisition consideration. We paid $4.0 million and $27.0 million during the years ended December 31, 2020 and 2019, respectively.

During the second quarter of 2020, we acquired Come2Play for a total purchase consideration of $17.8 million which includes $3.7 million in estimated contingent acquisition consideration.

The following table summarizes our contingent acquisition consideration liabilities:


	As of December 31,
	2020		2019

Contingent acquisition consideration included in accrued liabilities	$	1.0	$	4.0
Contingent acquisition consideration included in other long-term liabilities	2.4		—

Restructuring and Other

Restructuring and other includes 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.

Restructuring and other expense for the years ended December 31, 2020, 2019 and 2018 primarily related to items (i), (iii) and (v) set forth above.

Foreign Currency Translation

We have operations in Israel where the local currency is the functional currency. Assets and liabilities of foreign operations are translated at period-end rates of exchange, and results of operations are translated at the average rates of exchange for the period. Gains or losses resulting from translating the foreign currency financial statements were accumulated as a separate component of Accumulated other comprehensive income (loss) in Stockholders’ Equity/Accumulated Net Parent Investment. Gains or losses resulting from foreign currency transactions are included in Other income (expense), net.

Acquisition of Come2Play

We account for business combinations in accordance with ASC 805. This standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction and establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed in a business combination. Certain provisions of this standard prescribe, among other things, the determination of acquisition-date fair value of consideration paid in a business combination (including contingent consideration) and the exclusion of transaction and acquisition related restructuring costs, which are expensed as incurred, from acquisition accounting.

On June 22, 2020, we completed the acquisition of all of the issued and outstanding capital stock of privately held mobile and social game company Come2Play, which expands our existing portfolio of social games. Come2Play offers a solitaire social game targeted towards casual game players on the same platforms in which we currently offer our existing games. The total purchase consideration was $17.8 million including $3.7 million in contingent acquisition consideration. Our preliminary allocation of the purchase price resulted in $12.7 million allocated to acquired intangible assets, which includes $6.8 million in customer relationships, $4.1 million in intellectual property, and $1.8 million in brand names, which have useful lives of seven, five and seven years, respectively, an immaterial amount of net working capital and $6.9 million in excess purchase price allocated to goodwill. We finalized purchase price allocation during the fourth quarter of 2020, which resulted in a $0.5 million adjustment to goodwill and deferred tax liability. The factors contributing to the recognition of goodwill are based on expected synergies resulting from this acquisition, including the expansion of the games portfolio. None of the resultant goodwill is expected to be deductible for income tax purposes. The results of operations from Come2Play have been included in our consolidated statement of income since the date of acquisition, which results were not material for the periods presented nor any historical periods. The fair value of intangible assets was determined using a combination of the royalty savings method and excess earnings method, and considered the Level 3 hierarchy as established by ASC 820.

Fair Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. We estimate the fair value of our assets and liabilities, when necessary, using an established three-level hierarchy in accordance with ASC 820.

The fair value of our financial assets and liabilities is determined by reference to market data and other valuation techniques as appropriate. We believe the fair value of our financial instruments, which are principally cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued liabilities, approximates their recorded values due to the short-term nature of these instruments.

In connection with our 2020 acquisition of Come2Play, we have recorded contingent consideration liability, which value is based on reaching certain earnings-based metrics. The contingent consideration liability was recorded at fair value on the acquisition date as part of the consideration transferred and is remeasured each reporting period. The inputs used to measure the fair value of contingent consideration liability are categorized as Level 3 in the fair value hierarchy. Refer to Contingent Acquisition Consideration section above for additional disclosures.

As of December 31, 2020 and 2019 we did not have other assets and liabilities recorded at fair value on a recurring or nonrecurring basis other than those described above.

Revolving Credit Facility

In connection with the IPO, SciPlay Holding, a wholly owned subsidiary of SciPlay Parent 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 administrative agent and collateral agent, entered into a $150.0 million revolving credit agreement that matures in May 2024. The interest rate is either Adjusted LIBOR (as defined in the Revolver) plus 2.250% (with one 0.250% leverage-based step-down to the margin and one 0.250% leverage-based step-up to the margin) or ABR (as defined in the Revolver) plus 1.250% (with one 0.250% leverage-based step-down to the margin and one 0.250% leverage-based step-up to the margin) at our option. We are required to pay to the lenders a commitment fee of 0.500% per annum on the average daily unused portion of the revolving commitments through maturity, which will be the five-year anniversary of the closing date of

the Revolver, which fee varies based on the total net leverage ratio and is subject to a floor of 0.375%. As of December 31, 2020 the commitment fee was 0.375% per annum. The Revolver provides for up to $15.0 million in letter of credit issuances, which requires customary issuance and administration fees, and a fronting fee of 0.125%.

The Revolver contains covenants that, among other things, 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, with the exception of certain payments under the TRA and payments in respect of certain tax distributions under the Operating Agreement. In addition, the Revolver requires us to maintain a maximum total net leverage ratio not to exceed 2.50:1.00 and to maintain a minimum fixed charge coverage ratio of no less than 4.00:1.00. Such covenants are tested quarterly at the end of each fiscal quarter. As of December 31, 2020, there were no borrowings outstanding, and we were in compliance with the financial covenants under the Revolver.

The Revolver is secured by a (i) first priority pledge of the equity securities of SciPlay Holding, SciPlay Parent LLC’s restricted subsidiaries and each subsidiary guarantor party thereto and (ii) first priority security interests in, and mortgages on, substantially all tangible and intangible personal property and material fee-owned real property of SciPlay Parent LLC, SciPlay Holding and each subsidiary guarantor party thereto, in each case, subject to customary exceptions.

We capitalized $1.1 million in debt issuance costs associated with the Revolver as of December 31, 2019, which are presented in Other assets and amortized over the term of the arrangement and reflected in Other income (expense). As of December 31, 2020, we have incurred $0.6 million in unused revolver commitment fees during the year ended December 31, 2020, which are reflected in Other income (expense).

New Accounting Guidance‑ Recently Adopted

The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) in 2016. The new guidance replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. We adopted this standard effective January 1, 2020. The adoption of this guidance did not have a material effect on our consolidated financial statements.

The FASB issued ASU No. 2018-13, Fair Value Measurement, and several subsequent amendments (collectively, Topic 820) in 2018. The standard amends the required quantitative and qualitative disclosure requirements for recurring and nonrecurring fair value measurements. We adopted this standard effective January 1, 2020. The adoption of this standard did not have a material impact on our financial statement disclosures.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes, a new standard to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years with early adoption permitted. We early adopted this standard effective January 1, 2020 on a prospective basis for all relevant changes. The adoption of this guidance did not have a material effect on our consolidated financial statements.

New Accounting Guidance‑ Not Yet Adopted

The FASB issued ASU No. 2020-04 and subsequently ASU No. 2021-01, Reference Rate Reform (Topic 848) in March 2020 and January 2021, respectively. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, including derivative instruments impacted by changes in the interest rates used for discounting cash flows for computing variable margin settlements, subject to meeting certain criteria, that reference LIBOR or other reference rates expected to be discontinued, in 2022 or potentially 2023 (pending possible extension). The ASUs establish certain contract modification principles that entities can apply in other areas that may be affected by reference rate reform and certain elective hedge accounting expedients and exceptions. The ASUs may be applied prospectively. We are currently assessing the impact of these standards on our consolidated financial statements.

We do not expect that any other recently issued accounting guidance will have a significant effect on our consolidated financial statements.

Prepaid Expenses and Other Current Assets

12 Months Ended

Dec. 31, 2020

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


	As of December 31,
	2020		2019
Prepaid expenses and other	$	4.1	$	3.0

Income tax receivable	1.6		1.1
Contract assets	0.2		0.2
	$	5.9	$	4.3

During the year ended December 31, 2019, we incurred $9.3 million in costs directly related to pursuing the IPO. These costs were charged against the gross offering proceeds.

Property and equipment, net

12 Months Ended

Dec. 31, 2020

Property, Plant and Equipment [Abstract]

Property and equipment, net

Property and equipment, net are stated at cost, and when placed in service, are depreciated using the straight-line method over the estimated useful lives of the assets as follows:


Item						Estimated Life in Years
Computer equipment						3 - 5
Furniture and fixtures						5 - 10
Leasehold improvements						Shorter of the estimated useful life or remaining lease term

Property and equipment, net consisted of the following:


	As of December 31,
	2020		2019
Computer equipment	$	5.0	$	4.3
Furniture and fixtures	2.1		2.1
Leasehold improvements	2.9		2.7
Less: accumulated depreciation and amortization	(5.6)		(4.5)
Total property and equipment, net	$	4.4	$	4.6

The following reflects depreciation and amortization expense related to property and equipment included within depreciation and amortization:


	Years Ended December 31,
	2020		2019		2018
Depreciation and amortization expense	$	1.7	$	0.9	$	0.6

Goodwill and Intangible Assets, net

12 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill, Intangible Assets and Software, net

Goodwill

$120.7 million of goodwill reflected in these financial statements was allocated based on an estimate of the relative fair value that existed at the time of origination of goodwill in connection with the Parent’s acquisitions of WMS Industries, Inc. ("WMS”) and Bally Technologies, Inc. ("Bally”), and our acquisition of SpiceRack. The carrying value of goodwill increased by $6.9 million, as a result of the Come2Play acquisition in 2020.

We account for goodwill in accordance with ASC 350, Intangibles—Goodwill and Other ("ASC 350"). We test goodwill for impairment annually as of October 1 of each fiscal year, or whenever events or circumstances make it more likely than not that impairment may have occurred since completion of the last annual test. Impairment testing for goodwill is performed at the reporting unit level. We have identified a single reporting unit based on our management structure. The fair value of goodwill for this reporting unit is in excess of its carrying value.

The table below reconciles the changes in the carrying value of goodwill for the period from December 31, 2018 to December 31, 2020.


	Total
Balance as of December 31, 2018	$	120.7
Foreign currency adjustments	—
Balance as of December 31, 2019	120.7
Acquired Goodwill	6.9
Foreign currency adjustments	2.2
Balance as of December 31, 2020	$	129.8

Intangible Assets and Software, net

Intangible assets reflected in these financial statements were allocated based on an estimate of the relative fair value that existed at the time of origination of intangible assets in connection with the acquisitions. Intangible assets increased during the year ended December 31, 2020 as a result of the Come2Play acquisition. Identified intangible assets are amortized over three to ten years using the straight-line method, which materially approximates the pattern of the assets' use. Factors considered when assigning useful lives include legal, regulatory and contractual provisions, game or technology obsolescence, demand, competition and other economic factors.

The following table presents certain information regarding our intangible assets:


	Gross Carrying Amount		Accumulated Amortization		Net Balance





































Balance as of December 31, 2020
Amortizable intangible assets:
Intellectual property	$	42.2	$	(37.2)	$	5.0
Customer relationships	30.5		(19.8)		10.7
Software	21.9		(13.8)		8.1
Licenses	7.7		(3.5)		4.2
Brand names	6.1		(3.8)		2.3
	$	108.4	$	(78.1)	$	30.3

Balance as of December 31, 2019
Amortizable intangible assets:
Intellectual property	$	35.4	$	(33.4)	$	2.0
Customer relationships	23.2		(18.0)		5.2
Software	16.8		(10.3)		6.5
Licenses	5.1		(2.4)		2.7
Brand names	3.9		(3.3)		0.6
	$	84.4	$	(67.4)	$	17.0

The following reflects amortization expense related to intangible assets included within depreciation and amortization:


	Years Ended December 31,
	2020		2019		2018
Amortization expense(1)	$	8.0	$	6.1	$	14.5
(1) Amortization expense for the year ended December 31, 2018 includes $4.2 million in accelerated amortization of certain Dragonplay intellectual property recorded as a result of a change in estimate of the remaining useful lives.

Estimated amortization expense for the years ending December 31, 2021 through 2025 and thereafter is as follows:


Year	Expense
2021	$	9.8
2022	8.4
2023	5.7
2024	2.6
2025	1.8
Thereafter	2.0
	$	30.3

Accrued liabilities (Text Block)

12 Months Ended

Dec. 31, 2020

Payables and Accruals [Abstract]

Accrued liabilities

(5) Accrued liabilities

Accrued liabilities consisted of the following:


	As of December 31,
	2020		2019
Compensation and benefits	$	10.8	$	3.6
Contingent acquisition consideration	1.0		4.0
Income and other taxes	3.1		0.4
Liabilities under the TRA	4.0		2.6
Operating lease liabilities	2.0		1.9
Other	2.0		1.2
	$	22.9	$	13.7

Leases

12 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

LeasesOur operating leases primarily consist of real estate leases such as offices. Our leases have remaining terms of 4 years to 5 years. We do not have any finance leases. Our total variable and short term lease payments and operating lease expenses were immaterial for all periods presented.

Supplemental balance sheet and cash flow information related to operating leases is as follows:


	December 31, 2020			December 31, 2019
Operating lease right-of-use assets(1)	$	8.5		$	6.0
Accrued liabilities	2.0			1.9
Operating lease liabilities	7.5			5.2
Total operating lease liabilities	$	9.5		$	7.1

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	2.4		$	2.1
Weighted average remaining lease term, years	4.26			4.16
Weighted average discount rate	5.0		%	5.0		%

(1) Right-of-use assets obtained in exchange for lease obligations for the year ended December 31, 2020 were immaterial.

Lease liability maturities:


	Operating Leases
2021	$	2.4
2022	2.5
2023	2.5
2024	2.4
2025	0.7
Thereafter	—
Less: Imputed Interest	(1.0)
Total	$	9.5

As of December 31, 2020, we did not have material additional operating leases that have not yet commenced.

Stockholders’ Equity and Noncontrolling Interest

12 Months Ended

Dec. 31, 2020

Equity [Abstract]

Stockholders’ Equity and Noncontrolling Interest

Stockholders’ Equity

Following the closing of the IPO and the partial exercise of the over-allotment option by the underwriters on June 4, 2019, there were 22,720,000 shares of our Class A common stock issued and outstanding and 103,547,021 shares of our Class B common stock issued and outstanding. Holders of our Class A common stock and Class B common stock vote together as a single class on all matters presented to stockholders for their vote or approval, except where separate class voting is required by Nevada law. Each share of Class A common stock entitles its holder to one vote on all matters presented to our stockholders generally. 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 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 the IPO, all of our outstanding shares of Class B common stock were held by the SG Members on a one-to-one basis with the LLC Interests each SG Member then owned. Following the IPO and the partial exercise of over-allotment option by the underwriters on June 4, 2019, the holders of our issued Class A common stock collectively held 100% of the economic interests in us and 2.1% of the voting power in us, and Scientific Games, through its indirect ownership of all of the outstanding Class B common stock, held the remaining 97.9% of the voting power in us. As of December 31, 2020, Scientific Games owned all of the outstanding Class B common stock. Accordingly, Scientific Games continues to control shares representing 97.8% of the voting power in us and continues to have a controlling financial interest in and consolidate us.

Noncontrolling Interest

We are a holding company, and our sole material assets are LLC Interests that we purchased from SciPlay Parent LLC and SG Holding I, representing an aggregate 18.1% economic interest in SciPlay Parent LLC. The remaining 81.9% economic interest in SciPlay Parent LLC is owned indirectly by SGC, through the ownership of LLC Interests by the indirect wholly owned subsidiaries of Scientific Games, the SG Members.

The organizational transactions (including the IP License Agreement), consummated in connection with the closing of the IPO and partial exercise of over-allotment option, as described in Note 1, were executed concurrently with a single economic objective; therefore, the net effect of these transactions along with accumulated net parent investment balance as of the IPO date was allocated on a pro rata basis between additional paid-in capital and noncontrolling interest.

Stock-Based Compensation

Our Long-Term Incentive Plan (“LTIP”) authorizes the issuance of up to 6.5 million shares of our Class A common stock to be granted in connection with awards of incentive and nonqualified stock options, restricted stock and stock units, stock appreciation rights and performance-based awards. At our 2020 annual meeting of stockholders, our stockholders approved the adoption of the 2020 Employee Stock Purchase Plan (the “ESPP”), which authorizes the issuance of up to 250,000 shares of our Class A common stock. The first offering period under the ESPP commenced on January 1, 2021.

The Parent maintains an equity incentive awards plan under which the Parent may issue, among other awards, time‑based and performance‑based stock options and restricted stock units to our employees. Although awards under such plan result in the issuance of shares of the Parent, the amounts are a component of the total compensation for our employees and are included in our stock‑based compensation expense, which is accounted for as a component of Stockholders’ equity.

The following table summarizes stock‑based compensation expense that is included in general and administrative expenses:


	Years Ended December 31,
	2020		2019		2018
Related to SciPlay equity awards	$	21.4	$	5.7	$	—
Related to the Parent’s equity awards	0.6		3.2		4.0
Total	$	22.0	$	8.9	$	4.0

Restricted Stock Units (RSUs)

A summary of changes in unvested RSUs under our equity-based compensation plans during 2020 is presented below:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested RSU as of December 31, 2019	252,071	$	12.21
Granted	493,977	$	12.66
Vested	(124,920)	$	13.54
Cancelled	(32,667)	$	12.52
Unvested RSU as of December 31, 2020	588,461	$	12.24

The weighted-average grant date fair value of RSUs granted during 2020 and 2019 was $12.66 and $12.21, respectively. The fair value of each RSU grant is based on the market value of our common stock at the time of grant. As of December 31, 2020, we had $6.0 million of unrecognized stock-based compensation expense relating to unvested RSUs that will be amortized on a straight-line basis over a weighted-average remaining term of approximately 1.5 years. The fair value at vesting date of RSU’s vested during the year ended December 31, 2020 was $1.7 million.

Performance-Based Restricted Stock Units (PRSUs)

Starting with the second quarter of 2019, SciPlay employees including our senior executives and a non-employee director are granted PRSUs with respect to our Class A common stock. The performance criteria for vesting of such PRSUs granted is based on revenue and Adjusted EBITDA metrics set through the end of fiscal year 2022. Recipients of these awards generally must be actively employed by and providing services to the Company on the last day of the performance period in order to receive an award payout. In certain cases, upon death, disability or a qualifying termination, all or a pro-rata portion of the PRSUs will remain eligible to vest at the end of the performance period.

The fair value of the PRSUs granted was based on the closing price of our Class A common stock on the date of each grant. Stock-based compensation expense associated with these awards is recognized over the service period based on our projection as to the probable outcome of the above specified performance conditions. We reassess the probability of meeting the above specified performance conditions at each reporting period and adjust stock-based compensation expense to reflect current expected results, as necessary.

The following is a summary of changes in unvested PRSUs during 2020:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested PRSU as of December 31, 2019	3,806,802	$	15.76
Granted	109,417	$	14.94
Vested	(33,082)	$	15.13
Cancelled	(349,571)	$	15.84
Unvested PRSU as of December 31, 2020	3,533,566	$	15.77

The weighted-average grant date fair value of PRSUs granted during 2020 and 2019 was $14.94 and $15.76, respectively. All of the PRSUs granted during 2020 remained unvested as of December 31, 2020. As of December 31, 2020, we had $1.9 million of unrecognized stock-based compensation expense relating to unvested PRSUs that will be amortized on a straight-line basis over a weighted-average remaining term of approximately 0.4 years. The fair value at vesting date of PRSU’s vested during the year ended December 31, 2020 was $0.5 million.

Earnings per Share

12 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Earnings per Share

The table below sets forth a calculation of basic earnings per share ("EPS") based on net income attributable to SciPlay divided by the basic weighted average number of Class A common stock. Diluted EPS of Class A common stock is computed by dividing net income attributable to SciPlay by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to all potentially dilutive securities, using the treasury stock method.

For the years ended December 31, 2019 and December 31, 2018, we previously presented basic and diluted EPS as if the IPO had occurred at the beginning of the earliest period presented. Subsequently we have revised the presentation to only include net income attributable to SciPlay generated from May 7, 2019, the period following our IPO in which we had outstanding Class A common stock.

We excluded Class B common stock from the computation of basic and diluted EPS, as holders of Class B common stock do not have an economic interest in us and therefore a separate presentation of EPS of Class B common stock under the two-class method has not been provided.


	Years Ended December 31,
	2020		2019		2018
Numerator:
Net income	$	146.0	$	93.5	$	39.0
Less: net income attributable to SG Social Holding Company II, LLC prior to IPO	—		20.4		39.0
Less: net income attributable to the noncontrolling interest	125.1		61.1		—
Net income attributable to SciPlay	$	20.9	$	12.0	$	—
Denominator:
Weighted average shares of Class A common stock for basic EPS	22.8		22.7
Effect of dilutive securities:
Stock-based compensation grants	1.6		—
Weighted average shares of Class A common stock for diluted EPS	24.4		22.7
Basic and diluted net income attributable to SciPlay per share:
Basic	$	0.92	$	0.53
Diluted	$	0.86	$	0.53

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income taxes are determined using the liability method of accounting for income taxes, under which deferred tax assets ("DTAs") and deferred tax liabilities ("DTLs") are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities. Deferred income tax balances are reported using currently enacted tax rates and are adjusted for changes in such rates in the period of change.

We hold an economic interest of 18.1% in SciPlay Parent LLC. The 81.9% that we do not own represents a noncontrolling interest for financial reporting purposes. SciPlay Parent LLC is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As such, SciPlay Parent LLC is not subject to income tax in most U.S. jurisdictions, and SciPlay Parent LLC’s members, of which we are one, are liable for income taxes based on their allocable share of SciPlay Parent LLC’s taxable income.

The components of Net income before income taxes are as follows:


	Years Ended December 31,
	2020		2019		2018
United States	$	155.0	$	101.1	$	50.8
Foreign	(0.6)		1.1		(1.4)
Net income before income taxes	$	154.4	$	102.2	$	49.4

The components of income tax expense are as follows:


	Years Ended December 31,
	2020		2019		2018
Current
U.S. Federal	$	1.7	$	5.4	$	11.0
U.S. State	1.3		1.5		3.8
Foreign	1.0		0.9		1.6
Total	$	4.0	$	7.8	$	16.4
Deferred
U.S. Federal	3.6		0.6		(2.6)
U.S. State	0.9		0.5		(0.9)
Foreign	(0.1)		(0.2)		(2.5)
Total	4.4		0.9		(6.0)
Total income tax expense	$	8.4	$	8.7	$	10.4

The reconciliation of the U.S. federal statutory tax rate to the actual tax rate is as follows:


	Years Ended December 31,
	2020		2019		2018
Statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
U.S. state income taxes, net of federal benefit	1.3	%	1.7	%	3.1	%
Noncontrolling interest	(17.3)	%	(12.2)	%	—	%
Other	0.4	%	(2.0)	%	(3.0)	%
Effective income tax rate	5.4	%	8.5	%	21.1	%

Our effective tax rate for the years ended December 31, 2020 and 2019 differ from the statutory rate of 21.0% primarily because we do not record income taxes for the noncontrolling interest portion of U.S. pre-tax income. Additionally, the periods prior to the IPO are presented using historical results of operations and cost basis of the assets and liabilities as if we operated on a standalone basis during those periods, and the tax provision is calculated as if we completed separate tax returns apart from our Parent (“Separate-return Method’’). Certain legal entities that are included in these financial statements under the Separate-return Method were included in tax filings of affiliated entities that are not part of these financial statements.

The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following:


	As of December 31,
	2020		2019
Deferred tax assets:
Investment in LLC	$	74.3	$	75.0
TRA Liability	17.5		18.2
Other	0.7		1.6
Valuation allowance	(9.6)		(7.7)
Realizable deferred tax assets	82.9		87.1
Deferred tax liabilities:
Difference in financial reporting and tax basis for:
Identifiable Intangible Assets	(2.9)		—
Total deferred tax liabilities	(2.9)		—
Net deferred tax assets on balance sheet	$	80.0	$	87.1

As a result of the IPO, we recorded a deferred tax asset for the difference between the financial reporting value and the tax basis of our investment in SciPlay Parent LLC. We also recorded a deferred tax asset for the tax basis increases that will be generated from future payments under the Tax Receivable Agreement. The TRA liability represents 85% of the tax savings we expect to receive from the amortization deductions associated with the step-up in basis of depreciable assets under Internal Revenue Code Section 754. This DTA will be realized as cash payments are made to the TRA participants.

As of December 31, 2020, we did not have any material NOL or credit carryforwards.

The following table summarizes our valuation allowances:


	As of December 31,
	2020		2019
Federal	$	(8.4)	$	(5.7)
State	(1.2)		(0.9)
Foreign	—		(1.1)
	$	(9.6)	$	(7.7)

At each reporting period, we analyze the likelihood of our deferred taxes assets to be realized. If, based upon all available evidence, both positive and negative, it is more likely than not that such deferred tax assets will not be realized, a valuation allowance is recorded. As a result of this analysis, we determined that a portion of the DTA related to our investment in SciPlay Parent LLC is not expected to be realized; therefore, we recorded a valuation allowance on this portion of the outside basis difference in our investment.

We apply a recognition threshold and measurement attribute related to uncertain tax positions taken or expected to be taken on our tax returns. We recognize a tax benefit for financial reporting of an uncertain income tax position when it has a greater than 50% likelihood of being sustained upon examination by the taxing authorities. We measure the tax benefit of an uncertain tax position based on the largest benefit that has a greater than 50% likelihood of being ultimately realized including evaluation of settlements. For the years ended December 31, 2020 and 2019, we had no unrecognized tax benefits.

We file income tax returns in the U.S. Federal jurisdiction and various state and foreign jurisdictions. There are no material U.S. federal, state, local or non-U.S. examinations by tax authorities currently ongoing.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Related Party Transactions

12 Months Ended

Dec. 31, 2020

Related Party Transactions

The following is the summary of expenses paid to Scientific Games and settled in cash:


	Years Ended December 31,
	2020		2019		2018		Financial Statement Line Item
Royalties for Scientific Games IP(1)	$	—	$	10.2	$	26.1	Cost of revenue
Royalties to Scientific Games for third-party IP	7.0		6.9		7.7		Cost of revenue
Parent services	5.9		5.0		5.7		General and administrative
TRA payments(2)	2.5		—		—		Accrued liabilities
Distributions to Parent and affiliates, net(2)	12.8		—		—		Noncontrolling interest
(1) In accordance with the IP License Agreement, we did not incur any additional royalty expense related to Scientific Games IP after the effective date of the IP License Agreement. (2) Under the terms of the Operating Agreement, SciPlay Corporation relies on distributions from SciPlay Parent LLC to pay its obligations under the TRA and any other tax obligations. All distributions must be on a pari-passu basis, thus initiating a pro-rata distribution to Parent and affiliates.

The following is the summary of balances due to affiliates:


	As of December 31,
	2020		2019
Royalties to Scientific Games for third-party IP	$	2.5	$	0.5
Parent services	0.8		0.8
Reimbursable expenses to (from) Scientific Games and its subsidiaries	2.2		1.4
	$	5.5	$	2.7

IP Royalties

In connection with the IPO, we entered into the IP License Agreement from which we obtained an exclusive (subject to certain limited exceptions), perpetual, non-royalty-bearing license from SG Gaming, Inc. (formerly known as Bally Gaming, Inc.) (“SG Gaming”) for intellectual property created or acquired by SG Gaming or its affiliates on or before the third anniversary of the date of the IP License Agreement 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, and a non-exclusive, perpetual, non-royalty-bearing license for intellectual property created or acquired by SG 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 SG Gaming or its affiliates in our currently available games. The purchase price of the license was $255.0 million, which was determined based on the appropriate valuation methodology performed by a third-party valuation specialist. This transaction was treated as a deemed distribution to the Parent as it constitutes a transaction between entities under common control.

The Parent frequently licenses intellectual property (“IP”) from third parties, which we use in developing our games pursuant to the IP License Agreement. Royalties allocated for use of third‑party IP are charged to us and are typically based upon net social gaming revenues and the royalty rates defined and stipulated in the third‑party agreements.

Parent Services

On September 5, 2016, we entered into a Services Agreement with the Parent pursuant to which the Parent and its subsidiaries provide us various corporate services. In connection with the IPO described above, we entered into a new Services Agreement under which the Parent and its subsidiaries will continue to provide us the below services on substantially the same terms.

Parent services represent charges of corporate level general and administrative expenses that pay for services related to, but not limited to, finance, corporate development, human resources, legal, information technology, and rental fees for shared assets. These expenses have been charged to us on the basis of direct usage and costs when identifiable, with the remainder charged on the basis of revenues, operating expenses, headcount or other relevant measures, which we believe to be the most meaningful methodologies.

TRA

As described in Note 1 and in connection with the IPO, we entered into the TRA with the SG Members. The annual tax benefits are computed by comparing the income taxes due including such tax benefits and the income taxes due without such benefits. Our estimated liability under the TRA as of December 31, 2020 was $72.5 million, of which $4.0 million was included in Accrued liabilities.

The amount of aggregate payments due under the TRA may vary based on a number of factors, including the amount and timing of the taxable income SciPlay Parent LLC generates each year and applicable tax rates, with payments generally due within a specified period of time following the filing of our tax return for the taxable year with respect to which the payment obligation arises. The TRA will remain in effect until all such tax benefits have been utilized or expired unless we exercise our right to terminate the TRA. The TRA will also terminate if we breach our obligations under the TRA or upon certain change of control events specified in the agreement. If the TRA is terminated in accordance with its terms, our payment obligations would be accelerated based upon certain assumptions, including the assumption that we would have sufficient future taxable income to utilize such tax benefits.

During the year ended December 31, 2020, payments totaling $2.5 million were made to Scientific Games pursuant to the TRA. As of December 31, 2020 and 2019 the total TRA liability was $72.5 million and $75.3 million, respectively, of which $4.0 million and $2.6 million, respectively, was included in Accrued liabilities.

Parent Equity Awards

See Note 7 for disclosures related to Parent’s equity awards.

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Benefit plans We have a 401(k) plan for U.S.-based employees and equivalent foreign plans for our international employees. Those employees who participate in our 401(k) plan are eligible to receive matching contributions from us for the first 6% of participant contributions (as defined in the plan document). Contribution expense for the years ended December 31, 2020, 2019 and 2018 amounted to $1.8 million, $1.5 million and $1.2 million, respectively. Litigation From time to time, we are subject to various claims, complaints and legal actions in the normal course of business. In addition, we may receive notifications alleging infringement of patent or other IP rights. Washington State Matter On April 17, 2018, a plaintiff filed a putative class action complaint, Fife v. Scientific Games Corp., against our Parent, in the United States District Court for the Western District of Washington. The plaintiff seeks to represent a putative class of all persons in the State of Washington who purchased and allegedly lost virtual coins playing our online social casino games, including but not limited to Jackpot Party Casino and Gold Fish Casino. The complaint asserts claims for alleged violations of Washington’s Recovery of Money Lost at Gambling Act, Washington’s consumer protection statute, and for unjust enrichment, and seeks unspecified money damages (including treble damages as appropriate), the award of reasonable attorneys’ fees and costs, pre‑ and post‑judgment interest, and injunctive and/or declaratory relief. On July 2, 2018, our Parent filed a motion to dismiss the plaintiff’s complaint with prejudice, which the trial court denied on December 18, 2018. Our Parent filed its answer to the putative class action complaint on January 18, 2019. On August 24, 2020, the trial court granted plaintiff’s motion for leave to amend her complaint and to substitute a new plaintiff, Donna Reed, for the initial plaintiff, and re-captioned the matter Reed v. Scientific Games Corporation. On August 25, 2020, the plaintiff filed a first amended complaint against our Parent, asserting the same claims, and seeking the same relief, as the complaint filed by Sheryl Fife. On September 8, 2020, our Parent filed a motion to compel arbitration of plaintiff’s claims and to dismiss the action, or, in the alternative, to transfer the action to the United States District Court for the District of Nevada, and that motion is fully-briefed and pending before the trial court. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible loss. Although the case was brought against Scientific Games, 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. SciPlay IPO Matter (New York) On or about October 14, 2019, the Police Retirement System of St. Louis filed a putative class action complaint in New York state court against SciPlay, certain of its executives and directors, and SciPlay’s underwriters with respect to its IPO (the “PRS Action”). The complaint was amended on November 18, 2019. The plaintiff seeks to represent a class of all persons or entities who acquired Class A common stock of SciPlay pursuant and/or traceable to the Registration Statement filed and issued in connection with the SciPlay IPO which commenced on or about May 3, 2019. The complaint asserts claims for alleged violations of Sections 11 and 15 of the Securities Act, 15 U.S.C. § 77, and seeks certification of the putative class; compensatory damages of at least $146.0 million, and the award of the plaintiff’s and the class’s reasonable costs and expenses incurred in the action. On or about December 9, 2019, Hongwei Li filed a putative class action complaint in New York state court asserting substantively similar causes of action under the Securities Act of 1933 and substantially similar factual allegations as those alleged in the PRS Action (the “Li Action”). On December 18, 2019, the New York state court entered a stipulated order consolidating the PRS Action and the Li Action into a single lawsuit. On December 23, 2019, the defendants moved to dismiss the consolidated action. On August 28, 2020, the court issued an oral ruling granting in part and denying in part the defendants’ motion to dismiss. On December 14, 2020, plaintiffs in the consolidated action filed a motion to certify the putative class. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible loss, if any. We believe that the claims in the lawsuit are without merit, and intend to vigorously defend against them. SciPlay IPO Matter (Nevada) On or about November 4, 2019, plaintiff John Good filed a putative class action complaint in Nevada state court against SciPlay, certain of its executives and directors, SGC, and SciPlay’s underwriters with respect to the SciPlay IPO. The plaintiff seeks to represent a class of all persons who purchased Class A common stock of SciPlay in or traceable to the SciPlay IPO that it completed on or about May 7, 2019. The complaint asserts claims for alleged violations of Sections 11 and 15 of the Securities Act, 15 U.S.C. § 77, and seeks certification of the putative class; compensatory damages, and the award of the plaintiff’s and the class’s reasonable costs and expenses incurred in the action. On February 27, 2020, the trial court entered a stipulated order that, among other things, stayed the lawsuit pending entry of an order resolving the motion to dismiss that was pending in the SciPlay IPO matter in New York state court. On September 29, 2020, the trial court entered a stipulated order that extended the stay pending a ruling on class certification in the SciPlay IPO matter in New York state court. We are currently unable to determine the likelihood of an outcome or estimate a range of reasonably possible losses, if any. We believe that the claims in the lawsuit are without merit, and intend to vigorously defend against them.

Description of the Business and Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Variable Interest Entities (“VIE”) and Consolidation	Variable Interest Entities (“VIE”) and Consolidation Subsequent to the IPO, our sole material asset is our member’s interest in SciPlay Parent LLC. In accordance with the Operating Agreement of SciPlay Parent LLC, we have all management powers over the business and affairs of SciPlay Parent LLC and to conduct, direct and exercise full control over the activities of SciPlay Parent LLC. Class A common stock issued in the IPO do not hold majority voting rights but hold 100% of the economic interest in the Company, which results in SciPlay Parent LLC being considered a VIE. Due to our power to control the activities most directly affecting the results of SciPlay Parent LLC, we are considered the primary beneficiary of the VIE. Accordingly, beginning with the IPO, we consolidate the financial results of SciPlay Parent LLC and its subsidiaries.
Basis of Presentation	Basis of Presentation The accompanying financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”). SG Social Holding Company II, LLC is SciPlay’s predecessor for financial reporting purposes, and accordingly, for all periods presented prior to May 7, 2019, the financial statements represent the financial statements of the predecessor. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and the accompanying notes. Actual results may differ materially from our estimates.
Cash and Cash Equivalents	Cash and Cash EquivalentsCash and cash equivalents include all cash balances and highly liquid investments with original maturities of three months or less. We place our temporary cash investments with high credit quality financial institutions. At times, such investments in U.S. accounts may be in excess of the Federal Deposit Insurance Corporation insurance limit.
Accounts Receivable and Allowance for Doubtful Accounts	Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any estimated uncollectible amounts. We review accounts receivable regularly and make estimates for the allowance for doubtful accounts when there is doubt as to our ability to collect individual balances. In evaluating our ability to collect outstanding receivable balances, we consider many factors, including the age of the balance, the platform provider's payment history and current creditworthiness, and current economic trends. Bad debts are written off after all collection efforts have ceased. We do not require collateral from our platform providers.
Impairment or Disposal of Long-Lived Assets	Long-Lived Assets and Finite-Lived Intangible Assets We assess the recoverability of our other long-term assets (including intangibles) with finite lives whenever events arise or circumstances change that indicate the carrying value of the asset may not be recoverable. Recoverability of long-lived assets (or asset groups) to be held and used is measured by a comparison of the carrying amount of the asset (or asset group) to the expected net future undiscounted cash flows to be generated by that asset (or asset group). The amount of impairment of other long-lived assets and intangible assets with finite lives is measured by the amount by which the carrying amount of the asset exceeds the fair market value of the asset.
Revenue and Contract Related Policies	Revenue Recognition We generate revenue from the sale of coins, chips and cards, which players can use to play casino-style slot games, table games and bingo games (i.e., spin in the case of slot games, bet in the case of table games and use of bingo cards in the case of bingo games). We distribute our games through various global social web and mobile platforms such as Facebook, Apple, Google, Amazon, and Microsoft. The games are primarily WMS, Bally, Barcrest™, and SHFL branded games. In addition, we also offer third-party branded games and original content. Disaggregation of Revenue We believe disaggregation of our revenue on the basis of platform and geographical locations of our players is appropriate because the nature and the number of players generating revenue could vary on such basis, which represent different economic risk profiles. General Our social and mobile games operate on a free-to-play model, whereby game players may collect coins, chips or cards free of charge through the passage of time or through targeted marketing promotions. If a game player wishes to obtain coins, chips or cards above and beyond the level of free coins, chips or cards available to that player, the player may purchase additional coins, chips or cards. Once a purchase is completed, the coins, chips or cards are deposited into the player's account and are not separately identifiable from previously purchased coins, chips or cards or coins, chips and cards obtained by the game player for free. Once obtained, coins, chips or cards (either free or purchased) cannot be redeemed for cash nor exchanged for anything other than game play within our apps. When coins, chips or cards are played in the games, the game player could "win" and would be awarded additional coins, chips or cards, or could "lose" and lose the future use of those coins, chips or cards. We have concluded that coins, chips and cards represent consumable goods, because the game player does not receive any additional benefit from the games and is not entitled to any additional rights once the coins, chips or cards are substantially consumed. Control transfers and we recognize revenues from player purchases of coins, chips and cards as the coins, chips or cards are consumed for game play. We determined through a review of play behavior that game players generally do not purchase additional coins, chips and cards until their existing coins, chips and cards balances have been substantially consumed. As we are able to track the duration between purchases of coins, chips and cards for individual game players for specific games, we are able to reliably estimate the period of time over which coins, chips and cards are consumed. Accordingly, for most games, we recognize revenue using an item-based revenue model. We estimate the amount of outstanding purchased coins, chips and cards at period end based on customer behavior, because we are unable to distinguish between the consumption of purchased or free coins, chips and cards. Based on an analysis of the customers' historical play behavior, the timing difference between when coins, chips or cards are purchased by a customer and when those coins, chips or cards are consumed in game play is relatively short. For games where we are unable to track the duration between purchases of coins, chips or cards for individual game players, we are able to reliably estimate the average player life. Accordingly, we recognize revenue using a user-based revenue model. Future usage patterns may differ from historical usage patterns and therefore the estimated average playing periods may change in the future. We continuously gather and analyze detailed customer play behavior and assess this data in relation to our judgments used for revenue recognition. Contract Assets, Contract Liabilities and Other Disclosures We receive customer payments based on the payment terms established in our contracts. Payment for the purchase of coins, chips and cards is made at purchase, and such payments are non-refundable in accordance with our standard terms of service. Such payments are initially recorded as a contract liability, and revenue is subsequently recognized as we satisfy our performance obligations.
Concentration of Credit Risk	Concentration of Credit RiskOur revenue and accounts receivable are generated via certain platform providers, which subject us to a concentration of credit risk.
Cost of Goods and Service	Cost of Revenue Amounts recorded as cost of revenue relate to direct expenses incurred in order to generate social gaming revenue. Such costs are recorded as incurred, and primarily consist of fees withheld by our platform providers from the player proceeds received by the platform providers on our behalf and licensing fees.Depreciation and amortization expense is excluded from cost of revenue and other operating expenses and is separately presented on the consolidated statements of income.
Advertising Cost	Advertising Cost The cost of advertising is expensed as incurred and totaled $123.0 million, $123.6 million and $100.2 million for the years ended December 31, 2020, 2019 and 2018, respectively. Advertising costs primarily consist of marketing and player acquisition and retention costs and are included in Sales and marketing expenses.
Research and Development Expense	Research and Development (R&D) R&D costs relate primarily to employee costs associated with game development and enhancement costs that do not meet internal-use software capitalization criteria. Such costs are expensed as incurred.
Contingent Acquisition Consideration	Contingent Acquisition Consideration Our contingent consideration liability is recorded at fair value on the acquisition date as part of the consideration transferred and is remeasured each reporting period. The changes in fair value of contingent acquisition consideration as a result of remeasurement are included in Contingent acquisition consideration expenses. The inputs used to measure the fair value of the Contingent acquisition consideration liability primarily consist of projected earnings‑based measures and probability of achievement (categorized as Level 3 in the fair value hierarchy as established by ASC 820). During the second quarter of 2019, we agreed with the SpiceRack selling shareholders to pay them $31.0 million in total contingent acquisition consideration. We paid $4.0 million and $27.0 million during the years ended December 31, 2020 and 2019, respectively.
Foreign Currency Transactions and Translations Policy	Foreign Currency Translation We have operations in Israel where the local currency is the functional currency. Assets and liabilities of foreign operations are translated at period-end rates of exchange, and results of operations are translated at the average rates of exchange for the period. Gains or losses resulting from translating the foreign currency financial statements were accumulated as a separate component of Accumulated other comprehensive income (loss) in Stockholders’ Equity/Accumulated Net Parent Investment. Gains or losses resulting from foreign currency transactions are included in Other income (expense), net.
New Accounting Guidance	New Accounting Guidance‑ Recently Adopted The FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) in 2016. The new guidance replaces the incurred loss impairment methodology in current U.S. GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans and other financial instruments, we will be required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses which reflects losses that are probable. We adopted this standard effective January 1, 2020. The adoption of this guidance did not have a material effect on our consolidated financial statements. The FASB issued ASU No. 2018-13, Fair Value Measurement, and several subsequent amendments (collectively, Topic 820) in 2018. The standard amends the required quantitative and qualitative disclosure requirements for recurring and nonrecurring fair value measurements. We adopted this standard effective January 1, 2020. The adoption of this standard did not have a material impact on our financial statement disclosures. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes, a new standard to simplify the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences related to changes in ownership of equity method investments and foreign subsidiaries. The guidance also simplifies aspects of accounting for franchise taxes and enacted changes in tax laws or rates, and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. The standard is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years with early adoption permitted. We early adopted this standard effective January 1, 2020 on a prospective basis for all relevant changes. The adoption of this guidance did not have a material effect on our consolidated financial statements. New Accounting Guidance‑ Not Yet Adopted The FASB issued ASU No. 2020-04 and subsequently ASU No. 2021-01, Reference Rate Reform (Topic 848) in March 2020 and January 2021, respectively. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, including derivative instruments impacted by changes in the interest rates used for discounting cash flows for computing variable margin settlements, subject to meeting certain criteria, that reference LIBOR or other reference rates expected to be discontinued, in 2022 or potentially 2023 (pending possible extension). The ASUs establish certain contract modification principles that entities can apply in other areas that may be affected by reference rate reform and certain elective hedge accounting expedients and exceptions. The ASUs may be applied prospectively. We are currently assessing the impact of these standards on our consolidated financial statements. We do not expect that any other recently issued accounting guidance will have a significant effect on our consolidated financial statements.

Description of the Business and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of the Use of Proceeds From Offering

We used the net proceeds from the IPO and underwriters’ exercise of the over-allotment option after deducting the underwriting discount, as follows:


	Amount		Note
To acquire 20,725,319 LLC Interests from SG Holding I	$	311.7	(A)
To acquire 1,994,681 newly issued LLC Interests from SciPlay Parent LLC	30.0		(B)
Net proceeds after deducting underwriting discount	$	341.7

(A) SG Holding I subsequently used these proceeds as follows:
Acquire IP License from Parent (“Upfront License Payment”)(1)	$	255.0
Distributed as a dividend to Scientific Games	56.7
	$	311.7
(B) SciPlay Parent LLC subsequently used the proceeds as follows:
Fees and expenses incurred in connection with the IPO	$	9.3
General corporate purposes, including a portion of contingent acquisition consideration	20.7
	$	30.0
(1) Per the Assignment Agreement, dated May 7, 2019, SG Holding I assigned its rights, duties, obligations and interest under the IP License Agreement to SciPlay.

Schedule of Disaggregation of Revenue

The following table presents our revenue disaggregated by type of platform:


	Years Ended December 31,
	2020		2019		2018
Mobile	$	505.9	$	391.0	$	323.3


Web and other	76.3		74.8		92.9
Total revenue	$	582.2	$	465.8	$	416.2

The following table presents our revenue disaggregated based on the geographical location of our players:


	Years Ended December 31,
	2020(1)		2019(1)		2018(1)
North America (2)	$	533.3	$	422.4	$	380.3
International	48.9		43.4		35.9
Total revenue	$	582.2	$	465.8	$	416.2
(1) For the years ended December 31, 2020 and 2019, North America revenue includes revenue derived from the U.S., Canada, and Mexico. As a result of enhancements in the technologies and processes we use to obtain customer data, beginning with the first quarter of 2019, geographical location is now determined based on player location as reported by the platform provider. Accordingly, we recast 2019 to align with current year presentation. 2018 revenue continues to be disaggregated between the U.S. and International as we did not have the ability to recast revenue. (2) For the years ended December 31, 2020, 2019, and 2018, U.S. revenue was $496.0 million, $395.3 million, and $380.3 million, respectively.

Schedule of Balances in Receivables and Contract Asset and Liability Accounts

The following table summarizes our opening and closing balances in contract assets, contract liabilities and accounts receivable:


	Accounts Receivable		Contract Assets(1)		Contract Liabilities(2)





Balance as of January 1, 2020	$	32.1	$	0.2	$	0.6
Balance as of December 31, 2020	36.6		0.2		0.6
(1) Contract assets are included within Prepaid expenses and other current assets in our consolidated balance sheets. (2) Contract liabilities are included within Accrued liabilities in our consolidated balance sheets.

Schedules of Concentration of Risk

The following tables summarize the percentage of revenues and accounts receivable generated via our platform providers in excess of 10% of our total revenues and total accounts receivable: