SciPlay

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from          to
 Commission file number: 001-38889
SciPlay Corporation
(Exact name of registrant as specified in its charter)
Nevada
83-2692460
(State or other jurisdiction of
(I.R.S. Employer Identification No.)
incorporation or organization)
6601 Bermuda Road, Las Vegas, Nevada 89119
(Address of principal executive offices)
(Zip Code)
(702) 897-7150
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock, $.001 par value
SCPL
The Nasdaq Stock Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐   No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐    No ☒
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405
of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☒
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared
or issued its audit report. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐    No ☒
As of June 30, 2022, the market value of voting and non-voting common equity held by non-affiliates of the registrant was $328,844,384.
As of February 24, 2023 the registrant had 21,882,107 shares of Class A common stock outstanding and 103,547,021 shares of Class B common
stock outstanding.
         DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s proxy statement relating to the 2023 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, 2022.

TABLE OF CONTENTS
PART I.
Item 1.
Business
7
Item 1A.
Risk Factors
12
Item 1B.
Unresolved Staff Comments
41
Item 2.
Properties
41
Item 3.
Legal Proceedings
41
Item 4.
Mine Safety Disclosures
41
PART II.
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

41
Item 6.
Reserved
43
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
43
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
55
Item 8.
Financial Statements and Supplementary Data
55
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
55
Item 9A.
Controls and Procedures
55
Item 9B.
Other Information
56
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
56
PART III.
Item 10.
Directors, Executive Officers and Corporate Governance
56
Item 11.
Executive Compensation
56
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
57
Item 13.
Certain Relationships and Related Transactions, and Director Independence
57
Item 14.
Principal Accounting Fees and Services
57
PART IV.
Item 15.
Exhibits, Financial Statement Schedules
58
Item 16.
Form 10-K Summary
89
3

PART I
FORWARD-LOOKING STATEMENTS
Throughout this Annual Report on Form 10-K, we make “forward-looking statements” within the meaning of the U.S. Private Securities Litigation
Reform Act of 1995. Forward-looking statements describe future expectations, plans, results or strategies and can often be identified by the use of
terminology such as “may,” “will,” “estimate,” “intend,” “plan,” “continue,” “believe,” “expect,” “anticipate,” “target,” “should,” “could,” “potential,”
“opportunity,” “goal,” or similar terminology. The forward-looking statements contained in this Annual Report on Form 10-K are generally located in the
material set forth under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” but may be found in other locations as well. These statements are based upon management’s current expectations, assumptions and estimates
and are not guarantees of timing, future results or performance. Therefore, you should not rely on any of these forward-looking statements as predictions of
future events. Actual results may differ materially from those contemplated in these statements due to a variety of risks and uncertainties and other factors,
including, among other things:
•
the effects of the COVID-19 pandemic and any resulting social, political, economic and financial complications;
•
our ability to attract and retain players;
•
expectations of growth in total consumer spending on social gaming, including social casino gaming;
•
our reliance on third-party platforms and our ability to track data on those platforms;
•
our ability to continue to launch and enhance games that attract and retain a significant number of paying players;
•
our ability to expand in international markets;
•
our reliance on a small percentage of our players for nearly all of our revenue;
•
our ability to adapt to, and offer games that keep pace with, changing technology and evolving industry standards;
•
competition;
•
our dependence on the optional purchases of virtual coins, chips and bingo cards (collectively referred to as “coins, chips and cards”) to
supplement the availability of periodically offered free coins, chips and cards;
•
our ability to access additional financing and restrictions and covenants in debt agreements, including those that could result in acceleration of the
maturity of our indebtedness;
•
the discontinuation or replacement of the London Interbank Offer Rate (“LIBOR”), which may adversely affect interest rates;
•
fluctuations in our results due to seasonality and other factors;
•
dependence on skilled employees with creative and technical backgrounds;
•
U.S. and international economic and industry conditions, including increases in benchmark interest rates and the effects of inflation;
•
public perception of our response to environmental, social and governance issues;
•
changes in, or the elimination of, our share repurchase program;
•
our ability to use the intellectual property rights of Light & Wonder, Inc. (“Light & Wonder”, “L&W” and “Parent”) and other third parties,
including the third-party intellectual property rights licensed to Light & Wonder, under our intellectual property license agreement (“IP License
Agreement”) with our Parent;
•
protection of our proprietary information and intellectual property, inability to license third-party intellectual property and the intellectual property
rights of others;
•
security and integrity of our games and systems;
•
security breaches, cyber-attacks or other privacy or data security incidents, challenges or disruptions;
•
reliance on or failures in information technology and other systems;
4

•
loss of revenue due to unauthorized methods of playing our games;
•
the impact of legal and regulatory restrictions on our business, including significant opposition in some jurisdictions to interactive social gaming,
including social casino gaming, and how such opposition could lead these jurisdictions to adopt legislation or impose a regulatory framework to
govern interactive social gaming or social casino gaming specifically, and how this could result in a prohibition on interactive social gaming or
social casino gaming altogether, restrict our ability to advertise our games, or substantially increase our costs to comply with these regulations;
•
laws and government regulations, both foreign and domestic, including those relating to our Parent and to data privacy and security, including with
respect to the collection, storage, use, transmission, sharing and protection of personal information and other consumer data, and those laws and
regulations that affect companies conducting business on the internet, including ours;
•
the continuing evolution of the scope of data privacy and security regulations, and our belief that the adoption of increasingly restrictive
regulations in this area is likely within the U.S. and other jurisdictions;
•
risks related to foreign operations, including the complexity of foreign laws, regulations and markets; the uncertainty of enforcement of remedies
in foreign jurisdictions; the effect of currency exchange rate fluctuations; the impact of foreign labor laws and disputes; the ability to attract and
retain key personnel in foreign jurisdictions; the economic, tax and regulatory policies of local governments; and compliance with applicable anti-
money laundering, anti-bribery and anti-corruption laws;
•
influence of certain stockholders, including decisions that may conflict with the interests of other stockholders;
•
our ability to achieve some or all of the anticipated benefits of being a standalone public company;
•
our dependence on distributions from SciPlay Parent Company, LLC (“SciPlay Parent LLC”) to pay our taxes and expenses, including substantial
payments we will be required to make under the Tax Receivable Agreement (the “TRA”);
•
failure to establish and maintain adequate internal control over financial reporting;
•
stock price volatility;
•
litigation and other liabilities relating to our business, including litigation and liabilities relating to consumer protection, gambling-related matters,
employee matters, alleged service and system malfunctions, alleged intellectual property infringement and claims relating to our contracts,
licenses and strategic investments;
•
our ability to complete acquisitions and integrate businesses successfully;
•
our ability to pursue and execute new business initiatives;
•
our expectations of future growth that will place significant demands on our management and operations;
•
natural events and health crises that disrupt our operations or those of our providers or suppliers;
•
changes in tax laws or tax rulings, or the examination of our tax positions;
•
levels of insurance coverage against claims; and
•
our dependence on certain key providers;
Additional information regarding risks and uncertainties and other factors that could cause actual results to differ materially from those
contemplated in forward-looking statements is included from time to time in our filings with the SEC, including under Part I, Item 1A “Risk Factors” in
this Annual Report on Form 10-K. Forward-looking statements speak only as of the date they are made and, except for our ongoing obligations under the
U.S. federal securities laws, we undertake no and expressly disclaim any obligation to publicly update any forward-looking statements whether as a result
of new information, future events or otherwise.
This Annual Report on Form 10-K may contain references to industry market data and certain industry forecasts. Industry market data and
industry forecasts are obtained from publicly available information and industry publications. Industry publications generally state that the information
contained therein has been obtained from sources believed to be
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reliable, but that the accuracy and completeness of that information is not guaranteed. Although we believe industry information to be accurate, it is not
independently verified by us and we do not make any representation as to the accuracy of that information. In general, we believe there is less publicly
available information concerning international social gaming industries than the same industries in the U.S. Some data is also based on our good faith
estimates, which are derived from our review of internal surveys or data, as well as the independent sources referenced above. Assumptions and estimates
of our and our industry's future performance are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those
described in "Risk Factors" in Part I, Item 1A of this Annual Report on Form 10-K. These and other factors could cause future performance to differ
materially from our assumptions and estimates.
Due to rounding, certain numbers presented herein may not precisely recalculate.
6

ITEM 1. BUSINESS
General
SciPlay Corporation was formed as a Nevada corporation on November 30, 2018 as a subsidiary of Scientific Games Corporation, now Light &
Wonder, Inc., 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 Company LLC (“SciPlay Parent LLC”) and its subsidiaries (collectively referred to as “SciPlay”, the “Company”, “we”, “us”, or
“our”). On May 7, 2019, we completed the IPO. 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 are a leading developer and publisher of digital games on mobile and web platforms. We operate primarily in the social gaming market, which
is characterized by gameplay online or on mobile devices, that is social, competitive, and self-directed in pace and session length. We also operate in the
hyper-casual space, which is characterized by simpler core loops and more repetitive gameplay than casual games. We generate a substantial portion of our
revenue from in-app purchases in the form of virtual coins, chips and cards, which players can use to play slot games, table games or bingo games. Players
who install our social games typically receive free coins, chips or cards upon the initial launch of the game and additional free coins, chips or cards at
specific time intervals. Players may exhaust the coins, chips or cards that they receive for free and may choose to purchase additional coins, chips or cards
in order to extend their time of game play. Once obtained, coins, chips and cards (either free or purchased) cannot be redeemed for cash nor exchanged for
anything other than game play within our apps. We generate additional revenue in the hyper-casual space from the receipt of advertising revenue. Players
who install our hyper-casual games receive free, unlimited gameplay that requires viewing of periodic in-game advertisements. We currently offer a variety
of social casino games, including Jackpot Party® Casino, Gold Fish® Casino, Quick Hit® Slots, 88 Fortunes® Slots, MONOPOLY® Slots, and Hot Shot
Casino®. We continue to pursue our strategy of expanding into the casual games market. Current casual game titles include Bingo Showdown®, Solitaire
Pets™ Adventure and Backgammon Live as well as other titles in the hyper-casual space through our acquisition of Alictus Yazilim Anonim Şirketi
(“Alictus”), a Turkey-based hyper-casual gaming studio, including games such as Candy Challenge 3D™, Boss Life™ and Deep Clean Inc. 3D™. During
the year ended December 31, 2022, we launched seven hyper-casual games, including the top hits Master Doctor 3D and Fade Master 3D, and we
continued development of SpellSpinner: Fantasy Quest, a casual game. Our social casino games typically include slots-style game play and occasionally
include table games-style game play, while our casual games blend solitaire-style or bingo game play with adventure game features, and our hyper-casual
games include many simple core loop mechanics. All of our games are offered and played across multiple platforms, including Apple, Google, Facebook,
Amazon and Microsoft. In addition to our internally created game content, our content library includes recognizable game content from Light & Wonder.
This content allows players who like playing land-based game content to enjoy some of those same titles in our free-to-play games. We have access to
Light & Wonder’s library of more than 1,500 iconic casino titles, including titles and content from third-party licensed brands such as MONOPOLY™ and
JAMES BOND™.  We believe our access to this content, coupled with our years of experience developing in-house content, uniquely positions us to create
compelling digital games.
Mission
Our mission is to become the #1 casual mobile gaming company in the world.
 The MONOPOLY name and logo, the distinctive design of the game board, the four corner squares, the MR. MONOPOLY name and character, as well as each of the distinctive elements of the
board, cards, and the playing pieces are trademarks of Hasbro for its property trading game and game equipment and are used with permission. © 1935, 2023 Hasbro. All Rights Reserved.
Licensed by Hasbro.
and James Bond indicia © 1962-2023 Danjaq, LLC and MGM. 
and all other James Bond related trademarks are trademarks of Danjaq, LLC. All Rights Reserved.
1
1
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Strategy
We strive to provide high quality games and entertainment to our customers. To this end, we are focused on the following strategies:
•
Invest in growth from existing games - We continue to invest in and grow our current games by adapting and developing our monetization and
marketing engines to improve player engagement, increase paying player conversion and drive per-player monetization. As we continue our data-
driven approach to develop our games, we believe we will be able to further monetize our existing user base and attract new players.
•
Develop new games - We intend to continue to capitalize on our ability to build successful games by introducing new titles that appeal to specific
player segments and offer differentiated experiences.
•
Continue international growth and expansion - We intend to further expand our global presence by incorporating our vast library of recognizable
and regionalized brands and content in our game design, customization and marketing for regional audiences. As the global social gaming market
expands, we believe there is an opportunity to continue to improve our reach across the rest of the world by offering more targeted content than we
currently offer and a better game play experience than is currently available to international players.
•
Expand into adjacent gaming markets - We intend to continue to address additional segments within the broader mobile gaming market by
expanding into adjacent areas and investing in new game markets. In March 2022, we acquired Alictus, which enabled us to further expand in the
casual gaming market. We believe our extensive experience in developing and operating social gaming titles strongly positions us to enter
untapped areas within the casual market, such as puzzle, card, match three and board games.
•
Leverage platform to scale through select acquisitions - We expect to continue to pursue select strategic acquisitions to fuel our top line growth
and build our portfolio. We believe we can maximize the value of an acquired asset through our scalable platform and our rigorous, data-driven
acquisition, engagement and monetization model.
Throughout 2022, we continued to execute on our strategy with an emphasis on our live operations and the development of new features leading to
record revenue for Jackpot Party® Casino and Quick Hit® Slots. In March 2022, we acquired Alictus, which enabled us to further expand in the casual
gaming market. We launched our own proprietary platform in the first quarter of 2023, which will improve our players’ experience and allow us to reduce
costs of revenue given the lower payment processing fees and other related expenses for in-app purchases made through our proprietary platform, as
compared to the platform fee charged by third-party platforms. In addition, we have plans to launch additional casual games and increase our investments
in the expansion of international markets.
Research and Development
We believe our ability to attract new players and retain existing players depends in part on our ability to evolve and expand our content library by
continually developing differentiated games, systems technology and functionality to enhance player entertainment and user profitability.
Our personnel are primarily located in Cedar Falls, Iowa; Austin, Texas; and Tel Aviv, Israel. We have additional personnel located in Ankara,
Turkey; Oulu, Finland; Brighton, United Kingdom; Chicago, Illinois and Des Moines, Iowa, along with services of a small number of consultants located
in Ukraine, Romania, and Mexico supplied to us through third-party contractors and services of personnel located in India supplied to us through our
intercompany services agreement with Light & Wonder.
Intellectual Property
We consider our intellectual property rights, including our trademarks, trade dress, copyrights and trade secrets, to be, in the aggregate, material to
our business. We seek to protect our investment in research and development by seeking intellectual property protection as appropriate for our technologies
and content. We also acquire and license intellectual property from Light & Wonder and third parties.
8

All of our games feature elements subject to copyright protection. In addition, we generally obtain trademark protection and often seek to register
trademarks for the names and designs under which we market and license our games.
  
We believe the value associated with both our brands and the third-party licensed brands, including those of Light & Wonder, under which we
market and license our games contribute to the appeal and success of our games, and our future ability to license, acquire or develop new brand names of
similar quality is important to our continued success. Therefore, we continue to invest in the recognition of our brands and brands we license. In addition to
our own brands and those we license from Light & Wonder, certain of our games are based on popular brands licensed from other third parties, such
as MONOPOLY™ and JAMES BOND™.
For a description of the IP License Agreement, see the risk factor captioned “We rely on the ability to use the intellectual property rights of Light
& Wonder and other third parties, including the third-party intellectual property rights licensed to Light & Wonder that we have enjoyed as an indirect
subsidiary of Light & Wonder, and we may lose the benefit of any intellectual property owned by or licensed to Light & Wonder if it ceases to hold certain
minimum percentages of the voting power in our company” under the heading “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K and
Note 10.
Competition
We face significant competition in all aspects of our business. Our primary social casino game competitors include Playtika, Playstudios, Product
Madness/Big Fish Games (subsidiaries of Aristocrat), DoubleU Games/Double Down Interactive, GSN Games/Bash Gaming (subsidiaries of Scopely),
AppLovin and Huuuge Games. Our competitors in the broader social game market include Activision Blizzard, Electronic Arts, Kabam, Take-Two
Interactive (acquirer of Zynga), Tencent Holdings and Rovio. We also compete with platforms that host real money gambling, including those provided by
Light & Wonder. On the broadest scale, we compete for the leisure time, attention and discretionary spending of our players versus other forms of online
entertainment, including social media and other video games, on the basis of a number of factors, including quality of player experience, brand awareness
and reputation and access to distribution channels.
We believe we compete favorably on these factors. Our industry and the markets for our games, however, are highly competitive, rapidly evolving,
fragmented and subject to changing technology, shifting needs and frequent introductions of new games, development platforms and services. Successful
execution of our strategy depends on our continuous ability to attract and retain both players and skilled employees, expand the market for our games,
maintain a technological edge and offer new capabilities to players. Our relationship with Light & Wonder imposes certain regulatory and operational
restrictions on us due to its business related to real money gaming. We compete with social gaming companies that do not have a similar connection to
regulated real money gaming, and many of those companies possess a base of existing players larger than ours. In some cases, we compete against gaming
operators who could expand their product lines to include social casino games and leverage their land-based gaming relationship with Light & Wonder to
license certain social casino game content that could compete with our content.
Many of our current and potential competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating
histories, greater financial, technical and other resources, and, in some cases, the ability to rapidly combine online platforms with full-time and temporary
employees. Internationally, local competitors may have greater brand recognition than us in their local country and a stronger understanding of local culture
and commerce. They also offer their products and services in local languages we may not offer.
Seasonality
Our results of operations can fluctuate due to seasonal trends and other factors. Player activity is generally slower in the second and third quarters
of the year, particularly during the summer months. See the risk factor captioned “Our results of operations fluctuate due to seasonality and other factors
and, therefore, our periodic operating results are not guarantees of future performance” under the heading “Risk Factors” in Part I, Item 1A of this Annual
Report on Form 10-K for additional information.
Human Capital
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We are a leading developer of technology-based products and services and associated content for the social gaming market. Our global reach is
made possible through the expertise, skills and dedicated efforts of our employees who serve our players across the globe.
As of December 31, 2022, we employed approximately 855 persons worldwide, which includes 371 domestic employees, 345 international
employees, and 139 full-time third-party consultants largely based in Bangalore, India; Kiev, Ukraine; and Botoșani and Bucharest in Romania. Our
operations within Ukraine are not material to our overall operations, and recent events have not had an impact on our ability achieve our game development
objectives.
In order to ensure that we are meeting our human capital objectives, we frequently utilize employee surveys to understand the effectiveness of our
employee and compensation programs and to determine where we can improve across the Company. Our latest survey, completed in 2022, indicated an
overall favorable rating of 77%, which is largely consistent with prior year results.
Safety: The health and safety of our employees is a top priority of our leaders. In light of the COVID-19 pandemic, we have implemented work
procedures that allow employees to work from home and collaborate remotely. We have also taken measures to keep our workforce safe by monitoring and
reducing the impact of the outbreak, including putting protocols in place for responding when employees are infected and enhanced cleaning procedures at
all sites.
Compensation and Benefits: We provide a competitive and comprehensive benefits program that is aligned with our business objectives and
attempts to inspire employees to drive innovation and improve Company performance. In addition to cash and equity compensation, we offer medical,
dental and vision plans; an employee stock purchase plan; paid time off and paid holidays; company-paid disability; life insurance; a 401(k) plan; flexible
spending accounts; employee assistance programs; and tuition reimbursement.
Government Regulation
We are subject to foreign and domestic laws and regulations that affect companies operating online, including over the internet and mobile
networks, many of which are still evolving and could be interpreted in ways that could negatively impact our business, revenue and results.
We are subject to federal, state and foreign laws related to the privacy and protection of player data. Such regulations, such as the General Data
Protections Regulation from the European Union and the California Consumer Privacy Act, which went into effect in California on January 1, 2020, and
the California Privacy Rights Act, or “CPRA”, are recent, untested laws and regulations that have and could further affect our operations and business. The
extent of the potential impact is unknown.
There is significant opposition in some jurisdictions to social gaming, including social casino gaming. Anti-gaming groups that specifically target
social casino games are located in several states and countries. Such opposition could lead these jurisdictions to adopt legislation or impose a regulatory
framework to govern social gaming or social casino gaming specifically. These opposition efforts could lead to a prohibition on social gaming or social
casino gaming altogether, restrict our ability to advertise our games or substantially increase our costs to comply with regulations, all of which could have
an adverse effect on our results of operations, cash flows and financial condition. We cannot predict the likelihood, timing, scope or terms of any such
legislation or regulation or the extent to which they may affect our business.
The United States Court of Appeals for the Ninth Circuit has previously held that a social casino game produced by one of our competitors should
be considered illegal gambling under Washington state law. Similar lawsuits have been filed against other defendants, including the Parent. For example, in
April 2018, a putative class action lawsuit, Fife v. Scientific Games Corp., was filed in federal district court alleging substantially the same causes of action
against our social casino games. On January 18, 2022, the parties entered into an agreement to settle the lawsuit for the amount of $24.5 million. On August
12, 2022, the district court held a hearing for final approval of the settlement, and gave its final approval to the settlement. On August 18, 2022, the court
entered judgment and dismissed the action with prejudice. See the risk factor captioned "Legal proceedings may materially adversely affect our business
and our results of operations, cash flows and financial condition" under the heading “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K
and Note 11.
In September 2018, sixteen international gambling regulators, including from Washington State, signed a declaration expressing concern over the
blurring of lines between gambling and video game products, including social casino gaming. The regulators analyzed the characteristics of video games
and social gaming and the U.K. Parliament published a report on
10

their findings in September 2019. The report addressed the regulators’ findings as to the potential psychosocial and financial harms of immersive
technology, the potential usefulness of pattern-of-play data in understanding healthy gameplay and supporting responsible game design. The report found
that any gambling-related harms of such games should be addressed through Internet safety legislation. As this report was published by U.K. authorities,
we cannot predict the likelihood, timing, scope or terms of any actions taken as a result of the report.
As we offer our games worldwide, foreign jurisdictions may claim we are required to comply with local laws, including in jurisdictions where we
have no local presence, offices or other equipment. For additional information about other existing or potential regulation that could affect our business, see
the risk factor captioned “Legal or regulatory restrictions could adversely impact our business and limit the growth of our operations” under the heading
“Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.
Executive Officers of the Company
Certain information regarding each of our executive officers is set forth below.
Name
Age
Position
Antonia Korsanos
53
Executive Chair of the Board of Directors
Joshua J. Wilson
47
Chief Executive Officer
Daniel O’Quinn
42
Interim Chief Financial Officer and Secretary
Antonia Korsanos has served as Chair of the Board of SciPlay Corporation since August 2022. She has also served as Executive Vice Chair of the
Board of Directors of Light & Wonder, Inc. since September 2020 and has served as a consultant to Light & Wonder with the title of Advisor to the CEO
since July 2019. Previously, Ms. Korsanos served as the Chief Financial Officer of Aristocrat Leisure Limited (“Aristocrat”) from 2009 to 2018 and
Company Secretary from 2011 to 2018. Prior to joining Aristocrat, Ms. Korsanos held senior leadership roles in the consumer goods industry, including at
Goodman Fielder and Kellogg’s. Ms. Korsanos has served as a director of Treasury Wine Estates Limited since April 2020. Ms. Korsanos previously
served as a director of Ardent Leisure Group Limited from September 2018 to June 2020, Crown Resorts Limited from May 2018 to October 2021 and
Webjet Limited from June 2018 to March 2021.
 
Joshua J. Wilson has served as Chief Executive Officer since April 2019. Mr. Wilson has also served as Chief Operating Officer and Senior Vice
President for our business since April 2016 to drive marketing, technology, production and product management for our business, after previously serving
as the Vice President of Product and Operations, Vice President of Product and Executive Director Social Gaming Products. From June 2012 to December
2013, Mr. Wilson was Senior Director of Social Products and Director of Social Gaming for WMS, which was acquired by Light & Wonder (then Scientific
Games) in 2013, overseeing web development, analytics and road mapping while creating a business intelligence system and launching our social casino
games Jackpot Party® Casino and Gold Fish® Casino. Mr. Wilson served with Phantom EFX, LLC from March 2001 to June 2012, when Phantom was
acquired by WMS, as the Director of Online Gaming and Engineering Supervisor.
Daniel O’Quinn has served as Interim Chief Financial Officer and Secretary at the Company since February 2023 and from August 2021 to
December 2022. Mr. O’Quinn previously served as Vice President, Finance from December 2022 to February 2023 and from March 2021 to August 2021.
Prior to March 2021, Mr. O’Quinn was the Senior Director of Finance and Accounting and the Director of Accounting at the Company. Prior to joining the
Company in August 2018, Mr. O’Quinn was the Controller of Extended Business Lines at Learfield, a collegiate sports media and technology company,
from September 2014 to August 2018. Mr. O’Quinn also has experience serving with Commercial Metals Company and KPMG. Mr. O’Quinn is a CPA and
holds a BBA in Accounting from Texas State University.
Access to Public Filings  
We file annual reports, quarterly reports, current reports, proxy statements and other documents with the Securities and Exchange Commission
(“SEC”) under the Exchange Act. The SEC maintains an Internet site that contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC at www.sec.gov.
We make the following information, among others, available free of charge through the Investors link on our website at
https://investors.sciplay.com/ and we use our website as a means of disclosing material information to the public in a broad, non-exclusionary manner for
purposes of the SEC's Regulation Fair Disclosure (Reg. FD):
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•
our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports as soon as
reasonably practicable after they are filed electronically with or furnished to the SEC;
•
Section 16 ownership reports filed by our executive officers, directors and 10% stockholders on Forms 3, 4 and 5 and amendments to those reports
as soon as reasonably practicable after they are filed electronically with the SEC; and
•
our Code of Business Conduct, which applies to all of our officers, directors and employees (which is also our required code of ethics applicable
to our Chief Executive Officer and Interim Chief Financial Officer in keeping with the Sarbanes-Oxley Act of 2002).
The above details about our website and its content are only for information. The contents of our website are not, nor shall they be deemed to be,
incorporated by reference in this Annual Report on Form 10-K.
ITEM 1A. RISK FACTORS
The risks described below are not the only risks facing us. Please be aware that additional risks and uncertainties not currently known to us or
that we currently deem to be immaterial could also materially and adversely affect our business operations. You should also refer to the other
information contained in our periodic reports, including the Forward-Looking Statements section, our consolidated financial statements and the
related notes and Management’s Discussion and Analysis of Financial Condition and Results of Operations for a further discussion of the risks,
uncertainties and assumptions relating to our business. Except where the context otherwise indicates, references below to the “Company,” “we,”
“our,” “ours” and “us” include all of our subsidiaries.
Risk Factors Summary
The following is a summary of some of the risks and uncertainties that could materially adversely affect our business, financial condition and
results of operations. You should read this summary together with the more detailed description of each risk factor contained below.
Risks Related to Our Business and Industry
•
The effects of the COVID-19 pandemic and similar health epidemics, contagious disease outbreaks and public perception thereof, continue to and,
in the future, could impact our operations and, should negative impacts such as significant negative player engagement develop, adversely affect
our operations, business, results of operations, cash flows or financial condition.
•
Our growth depends on our ability to attract and retain players, and the loss of our players, or failure to attract new players, could materially and
adversely affect our business.
•
We rely on third-party platforms to make our games available to players and to collect revenue.
•
A small number of games has generated a majority of our revenue, and we must continue to launch and enhance games that attract and retain a
significant number of paying players in order to grow our revenue and sustain our competitive position. We rely on a small percentage of our
players for nearly all of our revenue.
•
We operate in a highly competitive industry, and our success depends on our ability to effectively compete. Our success depends upon our ability
to adapt to, and offer games that keep pace with, changing technology and evolving industry standards.
•
Our Revolver, on which we have not drawn to date, imposes certain restrictions that may affect our ability to operate our business and make
payments on our indebtedness if we draw on it in the future.
•
We rely on skilled employees with creative and technical backgrounds.
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•
Unfavorable U.S. and international economic conditions, or decreased discretionary spending or travel due to other factors such as inflation, rising
benchmark interest rates, terrorist activity or threat thereof, civil unrest, health epidemics, contagious disease outbreaks, or public perception
thereof or other economic or political uncertainties, may adversely affect our business, results of operations, cash flows and financial condition.
•
Public perception of the Company’s response to environmental, social and governance issues could adversely affect our reputation, our customer
base and business and financial results.
Risks Related to Our Technology
•
We rely on the ability to use the intellectual property rights of Light & Wonder and other third parties, including the third-party intellectual
property rights licensed to Light & Wonder that we have enjoyed as an indirect subsidiary of Light & Wonder, and we may lose the benefit of any
intellectual property owned by or licensed to Light & Wonder if it ceases to hold certain minimum percentages of the voting power in our
company.
•
The intellectual property rights of others may prevent us from developing new games, entering new markets or may expose us to liability or costly
litigation.
•
Our success depends on the security and integrity of the games we offer, and security breaches or other disruptions could compromise our
information or the information of our players and expose us to liability, which would cause our business and reputation to suffer.
•
If we sustain cyber-attacks or other privacy or data security incidents that result in security breaches, we could suffer a loss of sales and increased
costs, exposure to significant liability, reputational harm, regulatory fines or punishment and other negative consequences.
Risks Related to Legal and Regulatory Factors
•
Legal or regulatory restrictions could adversely impact our business and limit the growth of our operations. We may share part of the regulatory
burdens of our parent, Light & Wonder.
•
Data privacy and security laws and regulations in the jurisdictions in which we do business could increase the cost of our operations and subject us
to possible sanctions and other penalties. Our business depends on the protection of our proprietary information and our owned and licensed
intellectual property.
Risks Related to Our Relationship with Light & Wonder
•
Light & Wonder controls the direction of our business, and the concentrated ownership of our common stock will prevent you and other
stockholders from influencing significant decisions. If Light & Wonder causes LNW Social Holding Company I, LLC (the “L&W Member”) to
sell a controlling interest in our company to a third party in a private transaction, holders of our Class A common stock may not realize any
change-of-control premium on shares of our Class A common stock, and we may become subject to the control of a presently unknown third
party.
•
Light & Wonder’s interests may conflict with our interests and the interests of our stockholders. Conflicts of interest between Light & Wonder and
us could be resolved in a manner unfavorable to us and our public stockholders.
•
Our articles of incorporation limit Light & Wonder’s and its directors’ and officers’ liability to us or our stockholders for breach of fiduciary duty
and could also prevent us from benefiting from corporate opportunities that might otherwise have been available to us.
•
Third parties may seek to hold us responsible for liabilities of Light & Wonder, which could result in a decrease in our income.
•
We are a “controlled company” within the meaning of the Nasdaq rules and, as a result, qualify for, and rely on, exemptions from certain corporate
governance requirements.
•
We rely on our access to Light & Wonder’s brands and reputation, some of Light & Wonder’s relationships, and the brands and reputations of
unaffiliated third parties. The services that we receive from Light & Wonder may not be
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sufficient for us to operate our business, and we would likely incur significant incremental costs if we lost access to Light & Wonder’s services.
Risks Related to Our Organizational Structure and the TRA
•
Our sole material asset is our interest in SciPlay Parent LLC, and, accordingly, we depend on distributions from SciPlay Parent LLC to pay our
taxes and expenses, including payments under the TRA. SciPlay Parent LLC’s ability to make such distributions have been and may be subject to
various limitations and restrictions.
•
The TRA with the L&W Member requires us to make cash payments to the L&W Member in respect of certain tax benefits to which we may
become entitled, and the payments we are required to make have been and will be substantial.
•
In certain cases, future payments under the TRA to the L&W Member may be accelerated or significantly exceed the actual benefits we realize in
respect of the tax attributes subject to the TRA.
•
We will not be reimbursed for any payments made to the L&W Member under the TRA in the event that any tax benefits are disallowed.
Risks Related to Ownership of Our Class A Common Stock
•
We are an “emerging growth company,” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies
will make our common stock less attractive to investors.
•
The dual class structure of our common stock may adversely affect the trading price or liquidity of our Class A common stock or may dilute our
stockholders’ economic interest in SciPlay.
•
The provisions of our articles of incorporation and bylaws requiring exclusive forum in the Eighth Judicial District Court of Clark County, Nevada
for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
You should carefully consider the following risks and other information in this Annual Report on Form 10-K in evaluating us and our Class A
common stock. The risk factors generally have been separated into seven groups: risks related to our business and industry, risks relating to our technology,
risks related to legal and regulatory factors, risks related to our relationship with Light & Wonder, risks related to our organizational structure and the TRA,
risks related to ownership of our Class A Common Stock and general risks.
Risks Related to Our Business and Industry
The effects of the COVID-19 pandemic or similar health epidemics, contagious disease outbreaks and public perception thereof continue to and, in the
future, could impact our operations and, should negative impacts such as significant negative player engagement develop, adversely affect our
operations, business, results of operations, cash flows or financial condition.

The outbreak of a novel strain of coronavirus, COVID-19, and public perception thereof, have contributed to consumer unease and may continue
to lead to decreased discretionary spending, which may have a negative effect on us. Other future health epidemics, contagious disease outbreaks or
variants of COVID-19, such as Delta and Omicron, could do the same. We can neither predict the effectiveness and distribution of vaccines nor the
government response to the COVID-19 pandemic and we cannot predict the ultimate effects that the outbreak of COVID-19, any resulting social, political
and economic conditions and decrease in discretionary spending may have on us, as they would be expected to impact our consumers and business partners
in varied ways in different communities. Our revenue is driven by players’ disposable incomes and level of social casino gaming activity. The outbreak of
COVID-19 has led to economic and financial uncertainty for many consumers and may continue to reduce or maintain at low amounts the disposable
incomes of social casino game players resulting in a lower number of players purchasing coins, chips or cards, or in players purchasing fewer coins, chips
or cards, which would negatively impact our results of operations, cash flows and financial condition. We experienced increased player engagement
resulting from the stay at home measures across the U.S. The extent to which we are able to sustain this increased player engagement is uncertain and
player engagement may recede. The recession of player engagement, as a result of the discontinuation of stay at home measures or otherwise, could
adversely affect our results of
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operations and financial condition. Furthermore, the pandemic and disruptions have caused, and may continue to cause us and certain of our business
partners, including Light & Wonder, who provides services to us under the Intercompany Service Agreement, to implement additional temporary
adjustment of work schemes allowing employees to work from home and collaborate remotely. We have maintained measures to monitor and reduce the
impact of the outbreak, including our global crisis monitoring team, protocols for responding when employees are infected and enhanced cleaning
procedures at all sites, but there can be no assurance these will be sufficient to mitigate the risks faced by our and our partners’ work forces. We may
experience lower work efficiency and productivity, which may adversely affect our service quality, and our business operations have been and could be
disrupted when and/or if our employees have been or are suspected of infection, since this has caused and may cause our employees to be quarantined
and/or our offices to continue operating remotely. In addition, as we have reopened our offices following appropriate precautions and guidelines, the risk of
spreading the virus could increase, and we may experience further disruptions to our business operations if our employees contract the virus from one
another. We will continue to incur costs for our operations, and our revenues during this period are difficult to predict. As a result of any of the above
developments, our business has been and our results of operations, cash flows or financial condition may be adversely affected by the COVID-19 outbreak.

Our growth depends on our ability to attract and retain players, and the loss of our players, or failure to attract new players, could materially and
adversely affect our business.
Our ability to achieve growth in revenue in the future will depend, in large part, upon our ability to attract new players to our games, and retain
existing players of our games. Achieving growth in our community of players may require us to increasingly engage in sophisticated and costly sales and
marketing efforts that may not result in additional players.
In addition, our ability to increase the number of players of our games will depend on continued player adoption of social casino gaming and other
forms of casual gaming. Growth in the social gaming industry and the level of demand for and market acceptance of our games are subject to a high degree
of uncertainty. We cannot assure that player adoption of social gaming and our games will continue or exceed current growth rates, or that the industry will
achieve more widespread acceptance. For information regarding how certain third-party platform policies affect our ability to attract and retain players, see
the risk factor captioned “We rely on third-party platforms to make our games available to players and to collect revenue.”
Additionally, as technological or regulatory standards change and we modify our technology platform to comply with those standards, we may
need players to take certain actions to continue playing, such as downloading a new game client, performing age gating checks or accepting new privacy
policies or terms and conditions. Players may stop using our games and related services at any time, including if the quality of the player experience on our
platform, including our support capabilities in the event of a problem, does not meet their expectations or keep pace with the quality of the player
experience generally offered by competitive games and services. In addition, expenditures by players tend to fluctuate seasonally, particularly during the
summer months, and may reflect overall economic conditions.
We face competition for leisure time, attention and discretionary spending of our players. Other forms of leisure time activities, such as offline,
traditional online, personal computer and console games, television, movies, sports and the internet, are much larger and more well-established options for
consumers. Consumer tastes and preferences for leisure time activities are also subject to sudden or unpredictable change on account of new innovations. If
consumers do not find our games to be compelling or if other existing or new leisure time activities are perceived by our players to offer greater variety,
affordability, interactivity and overall enjoyment, our business could be materially and adversely affected.
We rely on third-party platforms to make our games available to players and to collect revenue.
Our social gaming offerings operate through Apple, Google, Facebook and Amazon, which also serve as significant online distribution platforms
for our games, with some of our games available on Microsoft. Substantially all of our revenue was generated by players using those platforms.
Consequently, our expansion and prospects depend on our continued relationships with these providers, and any emerging platform providers that
are widely adopted by our target player base. We are subject to the standard terms and conditions that these platform providers have for application
developers, which govern the promotion, distribution and operation of games and other applications on their platforms, and which the platform providers
can change unilaterally on short or without notice. Version updates, such as Apple's iOS 14.5 update in April 2021, which included changes to its
AppTracking Transparency policy, now requires user permission before developers can track a user across apps and websites owned by other companies or
access a user’s device’s identifier for advertisers (“IDFA”), which has reduced the quantity and quality of data available to us. This change has particularly
impacted our strategy for the games produced by Alictus, with
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Alictus having begun preparing its games primarily for Google’s Android platform. Google’s planned Google advertising identification deprecation,
expected in 2023, may further impact our strategy. These changes could, among other things, have a detrimental impact on our ability to conduct targeted
advertising on platforms, increase the cost to obtain new users and impact the return on investment of advertising spend. The impact of these changes has
been a catalyst for SciPlay to explore, and continue to engage with, traditional media, expanded relationships with social media influencers and other
innovative marketing solutions. We will also be adversely impacted if we are unable to continue these relationships in the future or if the terms and
conditions offered by these providers are altered to our disadvantage. For instance, if any of these providers were to increase their fees, our results of
operations, cash flows and financial condition would suffer. Additionally, our business would be harmed if:

•
the platform providers discontinue or limit our access to their platforms;
•
governments or private parties, such as internet providers, impose bandwidth restrictions or increase charges or restrict or prohibit access to those
platforms;
•
the platforms decline in popularity;
•
the platforms modify their current discovery mechanisms, communication channels available to developers, respective terms of service or other
policies, including fees;
•
the platforms impose restrictions or make it more difficult for players to buy coins, chips or cards; or
•
the platforms change how the personal information of players is made available to developers or develop their own competitive offerings.
If alternative platforms increase in popularity, we could be adversely impacted if we fail to create compatible versions of our games in a timely
manner, or if we fail to establish a relationship with such alternative platforms. Likewise, if our platform providers alter their operating platforms, we could
be adversely impacted as our offerings may not be compatible with the altered platforms or may require significant and costly modifications in order to
become compatible. If our platform providers were to develop competitive offerings, either on their own or in cooperation with one or more competitors,
our growth prospects could be negatively impacted. If our platform providers do not perform their obligations in accordance with our platform agreements,
we could be adversely impacted.
In the past, some of these platform providers have been unavailable for short periods of time or experienced issues with their features that permit
our players to purchase coins, chips or cards. For example, in the second and third quarters of 2018, we were negatively impacted by data privacy
protection changes implemented by Facebook, which impaired our players’ ability to access their previously acquired coins, chips or cards and purchase
additional coins, chips or cards. If similar events recur on a prolonged basis or other similar issues arise that impact players’ ability to download our games,
access social features or purchase coins, chips or cards, it could have a material adverse effect on our revenue, operating results and brand.
A small number of games has generated a majority of our revenue, and we must continue to launch and enhance games that attract and retain a
significant number of paying players in order to grow our revenue and sustain our competitive position.
Historically, we have depended on a small number of games for a majority of our revenue, and we expect that this dependency will continue for
the foreseeable future. In particular, Jackpot Party® Casino has accounted for a substantial portion of our revenue since its launch in 2012, including 48%
of our revenue in 2020 and 52% of our revenue in both 2021 and 2022, and we expect it to continue to do so over the next several years. Our growth
depends on our ability to consistently launch new games that achieve significant popularity. Each of our games generally requires significant research and
development, engineering, marketing and other resources to develop, launch and sustain via regular upgrades and expansions, and such costs on average
have increased. In the future, we may be forced to reduce our research and development and marketing expenses in order to support other business
priorities, which would harm our ability to attract new players and expand our player base and game community. Our ability to successfully and timely
launch, sustain and expand games and attract and retain paying players largely depends on our ability to:

•
anticipate and effectively respond to changing game player interests and preferences;
•
anticipate or respond to changes in the competitive landscape;
16

•
develop, sustain and expand games that are fun, interesting and compelling to play and on which players want to spend money;
•
retain rights to the intellectual property rights of third parties, including Light & Wonder;
•
build and maintain our brand and reputation;
•
effectively market new games and enhancements to our existing players and new players;
•
minimize launch delays and cost overruns on new games and game expansions;
•
minimize downtime and other technical difficulties; and
•
acquire high-quality assets, personnel and companies.
It is difficult to consistently anticipate player demand on a large scale, particularly as we develop new games in new markets, including the
international markets and new mobile platforms. If we do not successfully launch games that attract and retain a significant number of paying players and
extend the life of our existing games, our market share, reputation and financial results could be harmed. In addition, if the popularity of Jackpot Party®
Casino or any of our other top games decreases significantly, that would have a material adverse effect on our results of operations, cash flows and
financial condition.
Moreover, it is difficult to predict the problems we may encounter in innovating and introducing new games, and we may need to devote
significant resources to the creation, support and maintenance of our games and services. Under the IP License Agreement, our right to use any intellectual
property created or acquired by LNW Gaming, Inc. (formerly known as SG Gaming, Inc. and Bally Gaming, Inc.) (“LNW Gaming”) or its affiliates, or
licensed by third parties to LNW Gaming, after the third anniversary of the date of the IP License Agreement, will be limited to use in our currently
available games. This limit will also extend to derivative works of, or improvements to, intellectual property licensed to us under the IP License Agreement
that are developed after the third anniversary of the date of the IP License Agreement (including by us), as such derivative works and improvements will be
assigned to LNW Gaming and licensed back to us pursuant to the terms of the IP License Agreement. We cannot assure that we will be able to obtain a
license for the use of any such intellectual property in our new games on commercially reasonable terms, if at all.
We cannot assure that our initiatives to improve our player experience will always be successful. We also cannot predict whether our new games
or service offerings will be well received by players, or whether improving our technology will be successful or sufficient to offset the costs incurred to
develop and market these games, services or technology.

We rely on a small percentage of our players for nearly all of our revenue.
A small percentage of our players account for nearly all of our revenue. For example, 7.13%, 8.50%, and 9.60% of our players made purchases in
our games, in 2020, 2021, and 2022, respectively. However, we lose paying players in the ordinary course of business, and they may stop making purchases
in our games or playing our games altogether at any time. In order to sustain or increase our revenue levels, we must attract new paying players or increase
the amount our players pay. To retain paying players, we must devote significant resources so that the games they play retain their interest and attract them
to our other games. Our new games may also attract players away from our existing games. If we fail to grow or sustain the number of our paying players,
or if the rate at which we add paying players declines or if the average amount our paying players pay declines, our results of operations, cash flows and
financial condition could be adversely impacted.

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

Our players depend on our support organization to resolve any issues relating to our games. Our ability to provide effective support is largely
dependent on our ability to attract, resource, and retain employees who are not only qualified to support players of our games, but are also well versed in
our games. Additionally, 2021 and 2022 were marked by a labor shortage that made and continues to make hiring and retaining skilled employees to
support our games highly competitive. Any failure to maintain high-quality support, or a market perception that we do not maintain high-quality support,
could harm our reputation, adversely affect our ability to sell coins, chips or cards within our games to existing and prospective players, and could
adversely impact our results of operations, cash flows and financial condition.

We operate in a highly competitive industry, and our success depends on our ability to effectively compete.
Social gaming, which includes social casino gaming and from which we derive substantially all of our revenue, is a rapidly evolving industry with
low barriers to entry. Businesses can easily launch online or on mobile platforms and applications at nominal cost by using commercially available software
or partnering with various established companies in these markets. The market for our games is also characterized by rapid technological developments,
frequent launches of new games and features, changes in player needs and behavior, disruption by innovative entrants and evolving business models and
industry standards. As a result, our industry is constantly changing games and business models in order to adopt and optimize new technologies, increase
cost efficiency and adapt to player preferences.
Successful execution of our strategy depends on our continuous ability to attract and retain players, adapt to the emergence of new mobile
hardware or operating systems, expand the market for our games, maintain a technological edge and offer new capabilities to players. We also compete
with social gaming companies, including those that offer social casino games such as Playtika, Zynga (acquired by Take Two), DoubleU and others, that
have no connection to regulated real money gaming, and many of those companies have a base of existing players that is larger than ours. In some cases,
we compete against real money gaming operators who have expanded their games to include social casino games and have in the past leveraged their land-
based gaming relationship with Light & Wonder to license social casino game content from Light & Wonder, although such rights are limited in scope by
the IP License Agreement. In those cases, customers of such real money gaming operators may choose to play our content as it is offered by the operator
and not as it is offered by our social casino games, detrimentally impacting our results.
Some of our current and potential competitors enjoy substantial competitive advantages, such as greater name recognition, longer operating
histories, local language capabilities, greater financial, technical, and other resources and, in some cases, the ability to rapidly combine online platforms
with traditional staffing and contingent worker solutions. These companies may use these advantages to develop different platforms and services to
compete with our games, spend more on advertising and brand marketing, invest more in research and development or respond more quickly and
effectively than we do to new or changing opportunities, technologies, standards, regulatory conditions or player preferences or requirements. As a result,
our players may decide to stop playing our games or switch to our competitors’ games.
Moreover, current and future competitors may also make strategic acquisitions or establish cooperative relationships among themselves or with
others, including our current or future third-party suppliers. By doing so, these competitors may increase their ability to meet the needs of existing or
prospective freelancers and players. These developments could limit our ability to obtain revenue from existing and new buyers. If we are unable to
compete effectively, successfully and at reasonable cost against our existing and future competitors, our results of operations, cash flows and financial
condition could be adversely impacted.
We offer players regular free play and frequent discounts for purchases of coins, chips or cards to extend play in connection with our business. We
cannot assure that competitive pressure will not cause us to increase the incentives that we offer to our players, which could adversely impact our results of
operations, cash flows and financial condition.
Our free-to-play business model depends on the optional purchases of coins, chips or cards to supplement the availability of periodically offered free
coins, chips or cards.
We derive a substantial amount of our revenue from the sale of coins, chips or cards used to play our games. Our games are available to players for
free, and we generally generate revenue from them only if they voluntarily purchase coins, chips or cards above and beyond the level of free coins, chips or
cards provided periodically as part of the game. If we fail to offer games that attract purchases of coins, chips or cards, or if we fail to properly manage the
economics of free versus paid coins, chips or cards, our business, financial condition and results of operations could be materially and adversely affected.
18

Our Revolver, on which we have not drawn to date, imposes certain restrictions that may affect our ability to operate our business and make payments
on our indebtedness if we draw on it in the future.
If we draw from our $150.0 million revolving credit agreement, dated as of May 7, 2019 (as amended, supplemented, amended and restated or
otherwise modified from time to time, including by that certain Amendment No. 1, dated as of May 27, 2021, and by that certain Amendment No. 2, dated
as of February 28, 2022, the “Revolver”), covenants therein will, 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. In
addition, we are required 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. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity, Capital Resources and
Working Capital-Revolving Credit Facility” in Part II, Item 7 of this Annual Report on Form 10-K for additional information. The Revolver limits our
ability to make certain payments, including dividends or distributions on SciPlay Parent LLC’s equity and other restricted payments, provided, however,
that payments in respect of certain tax distributions under the SciPlay Parent LLC Operating Agreement (the “Operating Agreement”) and certain payments
under the TRA are permitted, and payments to SciPlay Parent LLC’s direct or indirect parent made on or prior to the closing date of the Revolver in an
amount not to exceed the net cash proceeds of the IPO are permitted, among other customary exceptions.

Moreover, if we draw significant amounts under the Revolver, its terms would require us to dedicate a portion of our cash flow from operations to
interest payments, thereby reducing the availability of cash flow to fund working capital, capital expenditures and other general corporate purposes;
increasing our vulnerability to adverse general economic, industry or competitive developments or conditions; and limiting our flexibility in planning for,
or reacting to, changes in our business and the industry in which we operate or in pursuing our strategic objectives.
We may be exposed to the risk of increased interest rates.
The Revolver has variable rates of interest, some of which use the London Inter-Bank Offered Rate (“LIBOR”) as a benchmark. See
“Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity, Capital Resources and Working Capital-Revolving
Credit Facility” in Part II, Item 7 of this Annual Report on Form 10-K for additional information. The U.K. Financial Conduct Authority mostly phased out
LIBOR by the end of 2021, extending to the end of June 2023 for U.S. dollar LIBOR only. In addition, other regulators have suggested reforming or
replacing other benchmark rates. In March 2022, the U.S. adopted the Adjustable Interest Rate (LIBOR) Act establishing the Secured Overnight Financing
Rate (“SOFR”) as a commercially reasonable substitute for and commercially substantial equivalent to LIBOR. In December 2022, the Board of Governors
of the Federal Reserve System adopted a final rule implementing the act. The discontinuation of LIBOR or the discontinuation, reform, or replacement of
any other benchmark rates, such as SOFR, may have an unpredictable impact on contractual mechanics in the credit markets or cause disruption to the
broader financial markets. Uncertainty as to the nature of such potential discontinuation, reform or replacement may negatively impact the cost of our
variable rate debt, and our business, prospects, financial condition and results of operations could be materially and adversely affected. Interest rates have
increased significantly in the past year. If we draw significant amounts under our Revolver, its terms would require us to dedicate a portion of our cash flow
from operations to interest payments, such that if interest rates remain at high levels or continue to rise, we may suffer a reduced availability of cash flow to
fund capital, capital expenditures and other general corporate purposes. We may in the future pursue amendments to the credit agreement governing the
Revolver to provide for a transition mechanism or other reference rate in anticipation of LIBOR’s discontinuation, but we may not be able to reach
agreement with our lenders on any such amendments. As a result, additional financing to replace our LIBOR-based debt may be unavailable, more
expensive or restricted by the terms of our outstanding indebtedness.
We may require additional capital to meet our financial obligations and support business growth, and this capital may not be available on acceptable
terms or at all.
Based on our current plans and market conditions, we believe that cash flows generated from our operations and borrowing capacity under the
Revolver will be sufficient to satisfy our anticipated cash requirements in the ordinary course of business for the foreseeable future. However, we intend to
continue to make significant investments to support our business growth and may require additional funds to respond to business challenges, including the
need to develop new games and features or enhance our existing games, improve our operating infrastructure or acquire complementary businesses,
personnel and technologies. Accordingly, we may need to engage in equity or debt financings in addition to our Revolver to secure additional funds. If we
raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any
new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A common stock. Any debt financing
we secure in the future could
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include restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to
obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms
favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to
support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.
Our results of operations fluctuate due to seasonality and other factors and, therefore, our periodic operating results are not guarantees of future
performance.
Our results of operations can fluctuate due to seasonal trends and other factors. Player activity is generally slower in the second and third quarters
of the year, particularly during the summer months. Certain other seasonal trends and factors that may cause our results to fluctuate include:

•
the geographies where we operate;
•
holiday and vacation seasons;
•
climate and weather;
•
economic and political conditions, including conditions related to the impact of the COVID-19 pandemic and government measures to mitigate its
effects; and
•
timing of the release of new games.
In light of the foregoing, results for any quarter are not necessarily indicative of the results that may be achieved in another quarter or for the full
fiscal year. We cannot assure that the seasonal trends and other factors that have impacted our historical results will repeat in future periods as we cannot
influence or forecast many of these factors.

We rely on skilled employees with creative and technical backgrounds.
We rely on our highly skilled, technically trained and creative employees to develop new technologies and create innovative games. Such
employees, particularly game designers, engineers and project managers with desirable skill sets are in high demand, and we devote significant resources to
identifying, hiring, training, successfully integrating and retaining these employees. Additionally, 2021 and 2022 were marked by a labor shortage that
made, and continues to make, hiring and retaining skilled employees to support our games highly competitive. A lack of skilled technical workers could
delay or negatively impact our business plans, ability to compete, results of operations, cash flows and financial condition. We employ personnel
internationally, particularly in game development operations in Israel and Ukraine, and are subject to additional risks customarily associated with foreign
operations, such as labor and employment related risks, risks related to political or regional instability and national security risks. For example, on February
24, 2022, Russia invaded Ukraine, which has disrupted our ability to rely on our skilled technical consultants in Ukraine, and further disruptions may
continue. Such risks and disruptions may negatively impact our results of operations, cash flows and financial condition. See also “Our foreign operations
expose us to business and legal risks” in Part I, Item 1A.
Unfavorable U.S. and international economic conditions, or decreased discretionary spending due to other factors such as inflation, civil unrest, or
other economic or political uncertainties, have adversely affected and may continue to adversely affect our business, results of operations, cash flows
and financial condition.
Unfavorable economic conditions, including recession, inflation, economic slowdown, decreased liquidity in the financial markets, decreased
availability of credit, relatively high rates of unemployment and inflation, have had, and may continue to have, a negative effect on our business. Socio-
political factors such as terrorist activity or threat thereof, civil unrest or other economic or political uncertainties, or health epidemics, contagious disease
outbreaks, or public perception thereof that contribute to consumer unease may also result in decreased discretionary spending by consumers and have a
negative effect on our businesses. We cannot fully predict the effects that unfavorable social, political and economic conditions, economic uncertainties and
any resulting decrease in discretionary spending or travel would have on us, as they would be expected to impact our customers, suppliers and business
partners in varied ways. Adverse changes in discretionary consumer spending or consumer preferences, resulting in reduced play levels, could also be
driven by factors such as an unstable job market, outbreaks of contagious diseases or public perception thereof or fears of terrorism or other violence.
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Public perception of the Company’s response to environmental, social and governance issues could adversely affect our reputation, our customer base
and business and financial results.
Companies across all industries are facing increasing scrutiny from customers, clients, regulators, investors, and other stakeholders related to their
environmental, social and governance practices and disclosure. Unfavorable perception regarding our environmental policies, social initiatives, governance
practices, diversity initiatives, the perceived or actual impacts of our games on user well-being, the actions of companies that provide similar products to
ours, or other growing concerns of our stakeholders, could adversely affect our reputation. Any negative effect on our reputation could have an adverse
effect on the size, engagement and loyalty of our customer base, which could adversely affect our business and financial results.
Additionally, we are subject to changing rules and regulations promulgated by a number of governmental and self-regulatory organizations,
including the SEC, the Nasdaq Stock Market and the Financial Accounting Standards Board (“FASB”). These rules and regulations continue to evolve in
scope and complexity, making compliance difficult and uncertain. We may become subject to new laws enacted with regards to climate change and other
environmental issues. If new laws are enacted, or current laws are modified in countries in which we operate, we could face increased costs to comply with
these laws.
Changes in, or the elimination of, our share repurchase program could have an adverse effect on the price of our common stock.
As part of our capital allocation strategy, our Board of Directors has authorized a share repurchase program under which the Company is authorized to
repurchase, from time to time, through May 9, 2024, up to an aggregate amount of $60 million of our outstanding stock. Decisions regarding share
repurchases are within the discretion of the Board of Directors and can be influenced by a number of factors, including the price of our common stock,
general business and economic conditions and our financial condition and operating results and may be suspended or discontinued at any time. Even if
fully implemented, our share repurchase program may not enhance long-term stockholder value. Changes in, or the elimination of, our share repurchase
program could have an adverse effect on the price of our common stock. For more information on our share repurchase program, see Note 7.
Risks Related to Our Technology
We rely on the ability to use the intellectual property rights of Light & Wonder and other third parties, including the third-party intellectual property
rights licensed to Light & Wonder that we have enjoyed as an indirect subsidiary of Light & Wonder, and we may lose the benefit of any intellectual
property owned by or licensed to Light & Wonder if it ceases to hold certain minimum percentages of the voting power in our company.
Substantially all of our games rely on products, technologies and other intellectual property that are licensed from Light & Wonder and other third
parties. Since September 2016, we have been party to an intercompany license agreement with Light & Wonder pursuant to which we receive the right to
use certain patents, brands, trademarks and other intellectual property owned by or licensed to Light & Wonder. In addition, as an indirect subsidiary of
Light & Wonder, we benefit from intellectual property licensed to Light & Wonder for the benefit of it and its subsidiaries. Under the IP License
Agreement and as a subsidiary of Light & Wonder, we expect, but cannot guarantee, that we will be able to continue to receive those rights on favorable or
reasonable terms, and licensors may have approval rights over any future sublicenses by Light & Wonder. The IP License Agreement has a change of
control provision that requires LNW Gaming’s consent, not to be unreasonably withheld, in the event of changes of control of our company that are not
initiated by Light & Wonder. LNW Gaming could reasonably withhold its consent, and therefore have the right to terminate the IP License Agreement, if,
for example, a competitor of Light & Wonder were to acquire more than 50% of the voting power in our company. If LNW Gaming were to exercise this
termination right, we would lose the benefit of any intellectual property licensed to us under the IP License Agreement, which is essential to our business,
including any intellectual property that we develop, to the extent it is an improvement, enhancement, modification, or derivative work of any intellectual
property licensed to us under the IP License Agreement.

Any transaction that results in Light & Wonder ceasing to hold at least 50% of the voting power in our company will be considered a change of
control transaction requiring LNW Gaming’s consent, except for: (i) transactions initiated by Light & Wonder, or (ii) decreases in voting power resulting
from (a) Light & Wonder selling any ownership interests in our company, either privately or through additional public offerings, or (b) any future issuance
of additional shares of our capital
21

stock. In addition, our rights to any third-party intellectual property licensed to LNW Gaming or its affiliates and sublicensed to us under the IP License
Agreement are subject to any change of control provisions in the applicable third-party license.

Further, even absent termination of the IP License Agreement, if Light & Wonder ceases to hold at least 50% of the voting power in our company,
or such other percentage as may be required by a specific third-party license between the applicable third party and Light & Wonder, we may also lose the
benefit of any intellectual property licensed to Light & Wonder for the benefit of it or its subsidiaries. We have little control over future amendments or
renewals of third-party licenses to which we are not a party, and such amendments and renewals may affect the ability of Light & Wonder to sublicense
such third-party intellectual property rights to us, or our ability to benefit directly from such intellectual property without a sublicense as a subsidiary of
Light & Wonder.
The future success of our business will depend, in part, on our ability to obtain, retain or expand licenses for technologies and services in a
competitive market. We cannot assure that these third-party licenses, including the IP License Agreement, or support for such licensed technologies and
services, will continue to be available to us on commercially reasonable terms, if at all. In the event that we lose the benefit of, or cannot renew and/or
expand existing licenses, we may be required to discontinue or limit our use of the technologies and services that include or incorporate the licensed
intellectual property. In addition, while we are controlled by Light & Wonder, we may not have the leverage to negotiate amendments to the IP License
Agreement, if required, on terms as favorable to us as those we would negotiate with an unaffiliated third party.
Some of our license agreements contain minimum guaranteed royalty payments to the third party, and other agreements are sublicenses where
such payment obligations are passed on to us by the sublicensor, including under the IP License Agreement. If we are unable to generate sufficient revenue
to offset the minimum guaranteed royalty payments, it could have a material adverse effect on our results of operations, cash flows and financial condition.
Our license agreements, including both direct licenses and sublicensing arrangements, typically contain customary restrictions on our ability to use or
transfer the licensed rights, including in connection with certain strategic transactions, such as a change of control of the licensee. Although we believe that
we are complying with our obligations under these license agreements and do not believe them to be in jeopardy of being terminated, we cannot assure that
any or all of these license agreements in fact will remain in effect. Under certain of these agreements, the licensor has the right to audit our use of their
intellectual property. Disputes with licensors over uses or terms could result in the payment of additional royalties or penalties by us, cancellation or non-
renewal of the underlying license or litigation.
Our business depends on the protection of our proprietary information and our owned and licensed intellectual property.
We believe that our success depends, in part, on protecting our owned and licensed intellectual property in the U.S. and in foreign countries. Our
intellectual property includes certain trademarks and copyrights relating to our games, and proprietary or confidential information that is not subject to
formal intellectual property protection. Intellectual property that is significant to our business is owned by Light & Wonder and other third parties. Our
success may depend, in part, on our and our licensors’ ability to protect the trademarks, trade dress, names, logos or symbols under which we market our
games and to obtain and maintain patent, copyright and other intellectual property protection for the technologies, designs, software and innovations used
in our games and our business. We cannot assure that we will be able to build and maintain consumer value in our trademarks, copyrights or other
intellectual property protection in our technologies, designs, software and innovations or that any patent, trademark, copyright or other intellectual property
right will provide us with competitive advantages.
We also rely on trade secrets and proprietary knowledge. We enter into confidentiality agreements with our employees and independent
contractors regarding our trade secrets and proprietary information, but we cannot assure that the obligation to maintain the confidentiality of our trade
secrets and proprietary information will be honored.

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

•
cause us to incur greater costs and expenses in the protection of our intellectual property;
•
potentially negatively impact our intellectual property rights, for example, by causing one or more of our intellectual property rights to be ruled or
rendered unenforceable or invalid; or
•
divert management’s attention and our resources.
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The intellectual property rights of others may prevent us from developing new games, entering new markets or may expose us to liability or costly
litigation.
Our success depends in part on our ability to continually adapt our games to incorporate new technologies and to expand into markets that may be
created by new technologies. If technologies are protected by the intellectual property rights of our competitors or other third parties, we may be prevented
from introducing games based on these technologies or expanding into markets created by these technologies.
We cannot assure that our business activities and games will not infringe upon the proprietary rights of others, or that other parties will not assert
infringement claims against us. A successful claim of infringement by a third party against us, our games or one of our licensees in connection with the use
of our technologies, or an unsuccessful claim of infringement made by us against a third party or its products or games, could adversely affect our business
or cause us financial harm. Any such claim and any resulting litigation, should it occur, could:
•
be expensive and time-consuming to defend or require us to pay significant amounts in damages;
•
result in invalidation of our proprietary rights or render our proprietary rights unenforceable;
•
cause us to cease making, licensing or using games that incorporate the intellectual property;
•
require us to redesign, reengineer or rebrand our games or limit our ability to bring new games to the market in the future;
•
require us to enter into costly or burdensome royalty, licensing or settlement agreements in order to obtain the right to use a product or process;
•
impact the commercial viability of the games that are the subject of the claim during the pendency of such claim; or
•
require us to stop selling the infringing games.
Our success depends on the security and integrity of the games we offer, and security breaches, including cybersecurity breaches, or other disruptions
could compromise our information or the information of our players and expose us to liability, which would cause our business and reputation to
suffer.
We believe that our success depends, in large part, on providing secure games to our players. Our business sometimes involves the storage,
processing and transmission of players’ proprietary, confidential and personal information. We also maintain certain other proprietary and confidential
information relating to our business and personal information of our personnel. Our games and systems are designed with security features to prevent
fraudulent activity. However, we cannot guarantee that these security features will effectively stop all fraudulent activity. Despite our security measures, our
games are vulnerable to attacks by hackers, players, vendors or employees or breached due to malfeasance or other disruptions. Any security breach or
incident that we experience could result in unauthorized access to, misuse of, or unauthorized acquisition of our or our players’ data, the loss, corruption or
alteration of this data, interruptions in our operations, or damage to our computers or systems or those of our players or third-party platforms. Any of these
could expose us to claims, litigation, fines and potential liability.
An increasing number of online services have disclosed security breaches, some of which have involved sophisticated and highly targeted attacks
on portions of their services. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently
and often are not foreseeable or recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate
preventative measures. If an actual or perceived breach of our security occurs, public perception of the effectiveness of our security measures and brand
could be harmed, and we could lose players. Data security breaches and other data security incidents may also result from non-technical means, for
example, actions by employees or contractors. Any compromise of our security could result in a violation of applicable privacy and other laws, regulatory
or other governmental investigations, enforcement actions, and legal and financial exposure, including potential contractual liability that is not always
limited to the amounts covered by our insurance. Any such compromise could also result in damage to our reputation and a loss of confidence in our
security measures. Any of these effects could have a material adverse impact on our results of operations, cash flows and financial condition. Our ability to
prevent anomalies and monitor and ensure the quality and integrity of our games and software is periodically reviewed and enhanced, but may not be
sufficient to prevent future attacks, breaches or disruptions. Similarly, we regularly assess the adequacy of our security systems, including the security of
our games and software to protect against
23

any material loss to any of our players and the integrity of our games to players. However, we cannot assure that our business will not be affected by a
security breach.
If we sustain cyber-attacks or other privacy or data security incidents that result in security breaches, we could suffer a loss of sales and increased
costs, exposure to significant liability, reputational harm, regulatory fines or punishment and other negative consequences.
Our information technology systems and infrastructure are subject to cyber-attacks, viruses, malicious software, break-ins, theft, computer
hacking, employee error or malfeasance or other security breaches. Hackers and data thieves are increasingly sophisticated and operate large-scale and
complex automated attacks. Threats to our information technology systems and infrastructure include:
•
experienced computer programmers and hackers who are able to penetrate our security controls and misappropriate or compromise sensitive
personal, proprietary or confidential information, create system disruptions or cause shutdowns or who are able to develop and deploy malicious
software programs that attack our systems or otherwise exploit any security vulnerabilities;
•
security incidents, acts of vandalism or theft, coordinated attacks by activist entities, misplaced or lost data, human errors or other similar events
that could negatively affect our systems and the data stored on those systems, and the data of our business partners; and
•
third parties, such as hosted solution providers, that provide services to us are also a source of security risk in the event of a failure of their own
security systems and infrastructure.
The costs to eliminate or address the foregoing security threats and vulnerabilities before or after a cyber incident could be significant. Our
remediation efforts may not be successful and could result in interruptions, delays or cessation of service, and loss of existing or potential suppliers or
players. In addition, breaches of our security measures and the unauthorized dissemination of sensitive personal, proprietary or confidential information
about us, our business partners or other third parties could expose us to significant potential liability and reputational harm. As threats related to cyber-
attacks develop and grow, we may also find it necessary to make further investments to protect our data and infrastructure, which may impact our results of
operations. Although we have insurance coverage for protecting against damages resulting from cyber-attacks, it may not be sufficient to cover all possible
claims, and we may suffer losses that could have a material adverse effect on our business. We could also be negatively impacted by existing and proposed
U.S. and non-U.S. laws and regulations, and government policies and practices related to cybersecurity, data privacy, data localization and data protection.
In addition, the platforms on which we distribute games may encourage, or require, compliance with certain security standards, such as the
voluntary cybersecurity framework released by the National Institute of Standards and Technology (or “NIST”), which consists of controls designed to
identify and manage cyber-security risks, and we could be negatively impacted to the extent we are unable to comply with such standards.
We rely on information technology and other systems, and any failures in our systems or errors, defects or disruptions in our games could diminish our
brand and reputation, subject us to liability and could disrupt our business and adversely impact our results.
We rely on information technology systems that are important to the operation of our business, some of which are managed by third parties. These
third parties are typically under no obligation to renew agreements and there is no guarantee that we will be able to renew these agreements on
commercially reasonable terms, or at all. These systems are used to process, transmit and store electronic information, to manage and support our business
operations and to maintain internal control over our financial reporting. In addition, we collect and store certain data, including proprietary business
information, and may have access to confidential or personal information in certain of our businesses that is subject to privacy and security laws, and
regulations. We could encounter difficulties in developing new systems, maintaining and upgrading current systems and preventing security breaches.
Among other things, our systems are susceptible to damage, outages, disruptions or shutdowns due to fire, floods, power loss, break-ins, cyber-attacks,
network penetration, denial of service attacks and similar events. While we have and will continue to implement network security measures and data
protection safeguards, our servers and other computer systems are vulnerable to any number of threats, including viruses, malicious software, hacking,
break‑ins or theft, data privacy or security breaches, third‑party security breaches, employee error or malfeasance and similar events. Failures in our
systems or unauthorized access to or tampering with our systems and databases could have a material adverse effect on our business, reputation, results of
operations, cash flows and financial condition. Any failures in our
24

computer systems or telecommunications services could affect our ability to operate our games or otherwise conduct business.

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

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

Substantially all of our games rely on data transferred over the internet. Access to the internet in a timely fashion is necessary to provide a
satisfactory player experience to the players of our games. Third parties, such as telecommunications companies, could prevent access to the internet or
limit the speed of our data transmissions, with or without reason, causing an adverse impact on our player experience that may materially and adversely
affect our reputation, competitive position, results of operations, cash flows and financial condition. In addition, telecommunications companies may
implement certain measures, such as increased cost or restrictions based on the type or amount of data transmitted, that would impact consumers’ ability to
access our games, which could materially and adversely affect our reputation, competitive position, results of operations, cash flows and financial
condition. Furthermore, internet penetration may be adversely affected by difficult global economic conditions or the cancellation of government programs
to expand broadband access.
Our games and other software applications and systems, and the third-party platforms upon which they are made available could contain undetected
errors.
Our games and other software applications and systems, as well as the third-party platforms upon which they are made available, could contain
undetected errors that could adversely affect the performance of our games. For example, these errors could prevent the player from making in-app
purchases of coins, chips or cards, which could harm our operating results. They could also harm the overall game-playing experience for our players,
which could cause players to reduce their playing time or in-game purchases, discontinue playing our games altogether, or not recommend our games to
other players. Such errors could also result in our games being non-compliant with applicable laws or create legal liability for us.
Resolving such errors could disrupt our operations, cause us to divert resources from other projects, or harm our operating results.
Some of our players may obtain coins, chips or cards used in, or otherwise alter the intended game play of, our games through hacking or other
unauthorized methods, resulting in a negative impact to our revenue.
Unauthorized operators may develop “hacks” that enable players to alter the intended game play or obtain unfair advantages in our games. For
example, although we do not permit the exchange of coins, chips or cards between accounts or with third parties, it is possible that unauthorized operators
could offer “hacks” that allow players to obtain coins, chips or cards through unauthorized methods, potentially having a negative impact on the amount of
revenue we collect from players. We could change our business model and allow authorized trading in the future, which could result in additional
opportunities for players to obtain coins, chips or cards for use in our games through unauthorized methods.
25

Additionally, unrelated third parties may attempt to scam our players with fake offers for coins, chips or cards or other game benefits. These scams
may harm the experience of our players, disrupt the virtual economies of our games and reduce the demand for coins, chips or cards, which may result in
increased costs to combat such programs and scams, a loss of revenue from the sale of coins, chips or cards and a loss of players.
Risks Related to Legal and Regulatory Factors
Legal or regulatory restrictions could adversely impact our business and limit the growth of our operations.
There is significant opposition in some jurisdictions to interactive social gaming, including social casino gaming. Some states or countries have
anti-gaming groups that specifically target social casino games. Such opposition could lead these jurisdictions to adopt legislation or impose a regulatory
framework to govern interactive social gaming or social casino gaming specifically. These could result in a prohibition on interactive social gaming or
social casino gaming altogether, restrict our ability to advertise our games, or substantially increase our costs to comply with these regulations, all of which
could have an adverse effect on our results of operations, cash flows and financial condition. We cannot predict the likelihood, timing, scope or terms of
any such legislation or regulation or the extent to which they may affect our business.
In 2018, the United States Court of Appeals for the Ninth Circuit decided that a social casino game produced by one of our competitors should be
considered illegal gambling under Washington state law. Similar lawsuits have been filed against other defendants, including Light & Wonder. For
example, in April 2018, a putative class action lawsuit was filed in federal district court alleging substantially the same causes of action against our social
casino games. In December 2018, the federal district court assigned to the litigation denied Light & Wonder’s motion to dismiss the plaintiff’s complaint
and, in January 2019, Light & Wonder filed its answer and affirmative defenses to the putative class action complaint. In November 2021, Light & Wonder
entered into an agreement in principle to settle the lawsuit for the amount of $24.5 million, which we fully paid in the third quarter of 2022. See “Legal
proceedings may materially adversely affect our business and our results of operations, cash flows and financial condition” and Note 11.
In September 2018, sixteen international gambling regulators, including from Washington State, signed a declaration expressing concern over the
blurring of lines between gambling and video game products, including social casino gaming. The regulators analyzed the characteristics of video games
and social gaming and the U.K. Parliament published a report on their findings in September 2019. The report addressed the regulators’ findings as to the
potential psychosocial and financial harms of immersive technology, the potential usefulness of pattern-of-play data in understanding healthy gameplay and
supporting responsible game design. The report found that any gambling-related harms of such games should be addressed through Internet safety
legislation. In December 2020, the U.K. Government Department for Digital, Culture, Media and Sports announced a review of the U.K. Gambling Act. As
this report and review are from U.K. authorities, we cannot predict the likelihood, timing, scope or terms of any actions taken as a result.
In May 2019, the World Health Organization adopted a new edition of its International Classification of Diseases, which lists gaming addiction as
a disorder. The American Psychiatric Association (“APA”) and U.S. regulators have yet to decide whether gaming addiction should be considered a
behavioral disorder, but the APA has noted that research and the debate on its classification are ongoing. Certain countries, including China and South
Korea, have enacted regulations, such as imposing both gaming curfews and spending limits for minors, and established treatment programs aimed at
addressing gaming addiction. We cannot predict the likelihood, timing, scope or terms of any similar regulations in the markets in which we operate, or the
extent to which implementation of such regulations may adversely affect our reputation and business.
Consumer protection and health concerns regarding games such as ours have been raised in the past and may again be raised in the future. Such
concerns could lead to increased scrutiny over the manner in which our games are designed, developed, distributed and presented. We cannot predict the
likelihood, timing or scope of any concern reaching a level that will impact our business, or whether we would suffer any adverse impacts to our results of
operations, cash flows and financial condition.

We may share part of the regulatory burdens of our parent, Light & Wonder.

The majority of our voting power is held by wholly owned subsidiaries of Light & Wonder, and we entered into the Intercompany Services
Agreement, the Registration Rights Agreement and the TRA with one or more of Light & Wonder and its affiliates. Light & Wonder and its affiliates hold
many privileged licenses in jurisdictions around the world, allowing them to operate as gambling equipment and service suppliers. Regulators that issue
such licenses have broad investigative powers and could ask for information from our majority stockholder, the entities from which we license intellectual
property and their affiliates. Light & Wonder and its affiliates, including SciPlay Parent LLC and its subsidiaries, will be obligated to
26

cooperate with the investigations of such regulators. Such licenses may limit the operations and activities of subsidiaries and affiliates of Light & Wonder,
including SciPlay Parent LLC and its subsidiaries.
Data privacy and security laws and regulations in the jurisdictions in which we do business could increase the cost of our operations and subject us to
possible sanctions and other penalties.
We collect, process, store, use and share data, some of which contains personal information. Our business is therefore subject to a number of
federal, state, local and foreign laws and regulations governing data privacy and security, including with respect to the collection, storage, use,
transmission, sharing and protection of personal information and other consumer and employee data. Such laws and regulations may be inconsistent among
states, countries or between states and countries or conflict with other rules. In particular, the European Union, or EU, has adopted strict data privacy and
security regulations. Following certain developments in the EU, including the EU’s General Data Protection Regulation (“GDPR”) and proposed
Regulation on Priacy and Electronic Communications (the “ePrivacy Regulation”), data privacy and security compliance in the EU are increasingly
complex and challenging. The GDPR created new compliance obligations applicable to our business and some of our players and imposed increased
financial penalties for noncompliance (including possible fines of up to four percent of global annual revenue for the preceding financial year or €20
million (whichever is higher) for the most serious violations). Compliance with the GDPR and similar regulations increases our operational costs and can
impact operational efficiencies.

The scope of data privacy and security regulations worldwide continues to evolve, and we believe that the adoption of increasingly restrictive
regulations in this area is likely within the U.S. and other jurisdictions. For example, the California Consumer Privacy Act (“CCPA”) went into effect on
January 1, 2020. This law, among other things, requires new disclosures to California consumers, imposes new rules for collecting or using information
about minors, and affords consumers new abilities to opt out of certain disclosures of personal information. It remains unclear how courts will interpret the
CCPA. The U.S. Congress may also pass a law to preempt all or part of the CCPA. Further, California subsequently passed the California Privacy Rights
Act, or “CPRA”, which became effective January 1, 2023. The CPRA amends the CCPA to provide more comprehensive privacy protections to consumers
and established the California Privacy Protection Agency as the primary body responsible for safeguarding digital privacy. The effects of the CCPA and
CPRA may be significant and the CCPA required us to update our policies to include CCPA specific clauses and procedures. Similarly, in March 2021,
Virginia enacted the Virginia Consumer Data Protection Act, which provides Virginia residents with certain rights regarding their data and obligates data
controllers to implement regular assessments evaluating the risks of processing personal and sensitive data and became effective in January 2023. A
number of other proposals related to data privacy or security are pending before federal, state, and foreign legislative and regulatory bodies. For example,
the European Union began final negotiations with the European Commission and European Parliament in 2022 regarding the adoption of the ePrivacy
Regulation that would govern data privacy and the protection of personal data in electronic communications, in particular for direct marketing purposes.
Efforts to comply with these and other data privacy and security restrictions that may be enacted has required us to modify our data processing practices
and policies, could cause us to further modify our practices and policies in the future and may increase the cost of our operations. Failure to comply with
such restrictions could subject us to criminal and civil sanctions and other penalties. In part due to the uncertainty of the legal climate, complying with
regulations, and any applicable rules or guidance from self-regulatory organizations relating to privacy, data protection, information security and consumer
protection, may result in substantial costs and may necessitate changes to our business practices, which may compromise our growth strategy, adversely
affect our ability to attract or retain players, and otherwise adversely affect our business, financial condition and operating results.

Any failure or perceived failure by us to comply with our posted privacy policies, our privacy-related obligations to players or other third parties,
or any other legal obligations or regulatory requirements relating to privacy, data protection, or information security may result in governmental
investigations or enforcement actions, litigation, claims, or public statements against us by consumer advocacy groups or others and could result in
significant liability, cause our players to lose trust in us, and otherwise materially and adversely affect our reputation and business. Furthermore, the costs
of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to us may limit the adoption and use of, and
reduce the overall demand for, our games. Additionally, if third parties we work with violate applicable laws, regulations, or agreements, such violations
may put our players’ data at risk, could result in governmental investigations or enforcement actions, fines, litigation, claims or public statements against us
by consumer advocacy groups or others and could result in significant liability, cause our players to lose trust in us and otherwise materially and adversely
affect our reputation and business. Further, public scrutiny of, or complaints about, technology companies or their data handling or data protection
practices, even if unrelated to our business, industry or operations, may lead to increased scrutiny of technology companies, including us, and may cause
government agencies to enact additional regulatory requirements, or to modify their enforcement or investigation activities, which may increase our costs
and risks.
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Our foreign operations expose us to business and legal risks.
We generate a portion of our revenue from operations outside of the U.S. For the years ended December 31, 2022, 2021 and 2020, we derived
approximately 14%, 15% and 15%, respectively, of our revenue from sales to players outside of the U.S. We also have significant operations, including
game development operations, in Israel.
Our operations in foreign jurisdictions may subject us to additional risks customarily associated with such operations, including: the complexity of
foreign laws, regulations and markets; the uncertainty of enforcement of remedies in foreign jurisdictions; the effect of currency exchange rate fluctuations;
the impact of foreign labor laws and disputes; the ability to attract and retain key personnel in foreign jurisdictions; the economic, tax and regulatory
policies of local governments; compliance with applicable anti-money laundering, anti-bribery and anti-corruption laws, including the Foreign Corrupt
Practices Act and other anti-corruption laws that generally prohibit U.S. persons and companies and their agents from offering, promising, authorizing or
making improper payments to foreign government officials for the purpose of obtaining or retaining business; and compliance with applicable sanctions
regimes regarding dealings with certain persons or countries. Certain of these laws also contain provisions that require accurate record keeping and further
require companies to devise and maintain an adequate system of internal accounting controls.
Although we have policies and controls in place that are designed to ensure compliance with these laws, if those controls are ineffective or an
employee or intermediary fails to comply with the applicable regulations, we may be subject to criminal and civil sanctions and other penalties. Any such
violation could disrupt our business and adversely affect our reputation, results of operations, cash flows and financial condition. In addition, our
international business operations could be interrupted and negatively affected by terrorist activity, political unrest or other economic or political
uncertainties. Moreover, U.S. and foreign jurisdictions could impose tariffs, quotas, trade barriers and other similar restrictions on our international sales.
Further, our ability to expand successfully in foreign jurisdictions involves other risks, including difficulties in integrating foreign operations, risks
associated with entering jurisdictions in which we may have little experience and the day-to-day management of a growing and increasingly geographically
diverse company. We may not realize the operating efficiencies, competitive advantages or financial results that we anticipate from our investments in
foreign jurisdictions, and our failure to effectively manage the risks associated with our operations in foreign jurisdictions could have a material adverse
effect on our business prospects, results of operations, cash flows and financial condition.

Risks Related to Our Relationship with Light & Wonder
Light & Wonder controls the direction of our business, and the concentrated ownership of our common stock will prevent you and other stockholders
from influencing significant decisions.
Light & Wonder, through its indirect wholly owned subsidiary, the L&W Member, controls shares representing a majority of our combined voting
power. The L&W Member owns all of our outstanding Class B common stock, which represents 82.4% of our total outstanding shares of common stock
and 97.9% of the combined voting power of both classes of our outstanding common stock. On all matters submitted to a vote of our stockholders, our
Class B common stock entitles its owners to ten votes per share (for so long as the number of shares of our common stock beneficially owned by the L&W
Member and its affiliates represents at least 10% of our outstanding shares of common stock and, thereafter, one vote per share), and our Class A common
stock entitles its owners to one vote per share. As long as Light & Wonder continues to control shares representing a majority of our combined voting
power, it will generally be able to determine the outcome of all corporate actions requiring stockholder approval, including the election of directors (unless
supermajority approval of such matter is required by applicable law). Even if Light & Wonder were to control less than a majority of our combined voting
power, it may be able to influence the outcome of corporate actions so long as it owns a significant portion of our combined voting power. If Light &
Wonder does not cause the L&W Member to dispose of its shares of our common stock, Light & Wonder could retain control over us for an extended
period of time or indefinitely.
Investors will not be able to affect the outcome of any stockholder vote while Light & Wonder controls the majority of our combined voting power
(or, in the case of removal of directors, two-thirds of our combined voting power). Due to its ownership and rights under our articles of incorporation and
our bylaws, Light & Wonder is able to control, indirectly through the L&W Member and subject to applicable law, the composition of our board of
directors, which in turn is able to control all matters affecting us, including, among other things:
•
any determination with respect to our business direction and policies, including the appointment and removal of officers and, in the event of a
vacancy on our board of directors, additional or replacement directors;
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•
any determinations with respect to mergers, business combinations or disposition of assets;
•
determination of our management policies;
•
determination of the composition of the committees on our board of directors;
•
our financing policy;
•
our compensation and benefit programs and other human resources policy decisions;
•
termination of, changes to or determinations under our agreements with Light & Wonder;
•
changes to any other agreements that may adversely affect us;
•
the payment of dividends on our Class A common stock; and
•
determinations with respect to our tax returns.
Because Light & Wonder’s interests may differ from ours or from those of our other stockholders, actions that Light & Wonder takes with respect
to us, as our controlling stockholder, may not be favorable to us or our other stockholders.
If Light & Wonder causes the L&W Member to sell a controlling interest in our company to a third party in a private transaction, holders of our Class
A common stock may not realize any change-of-control premium on shares of our Class A common stock, and we may become subject to the control of
a presently unknown third party.
Light & Wonder, through its indirect wholly owned subsidiary, the L&W Member, holds approximately 97.9% of our combined voting power.
Light & Wonder has the ability, should it choose to do so, to cause the L&W Member to sell some or all of its shares of our common stock and the LLC
Interests the L&W Member holds in a privately negotiated transaction, which, if sufficient in size, could result in a change of control of our company. See
Note 1 for additional information.
The ability of Light & Wonder to cause the L&W Member to privately sell their shares of our common stock and the LLC Interests the L&W
Member holds, with no requirement for a concurrent offer to be made to acquire all of our shares that will be publicly traded hereafter, could prevent our
stockholders from realizing any change-of-control premium on our stockholders’ shares of our common stock that may otherwise accrue to Light &
Wonder on its private sale of our common stock and the LLC Interests it holds. Additionally, if Light & Wonder causes the L&W Member to privately sell
shares representing a significant portion of our common stock, we may become subject to the control of a presently unknown third party. Such third party
may have conflicts of interest with those of other stockholders. In addition, if Light & Wonder causes the L&W Member to sell a controlling interest in our
company to a third party, any debt financing (including the Revolver) we secure in the future may be subject to acceleration, Light & Wonder may
terminate the Intercompany Services Agreement and other arrangements, and our other relationships and agreements, including our license agreements,
could be impacted, all of which may adversely affect our ability to run our business as described herein and may have a material adverse effect on our
results of operations, cash flows and financial condition.
Light & Wonder’s interests may conflict with our interests and the interests of our stockholders. Conflicts of interest between Light & Wonder and us
could be resolved in a manner unfavorable to us and our public stockholders.
Various conflicts of interest between us and Light & Wonder exist and could arise. See Note 10 for additional information. Ownership interests of
directors or officers of Light & Wonder in our common stock and ownership interests of our directors and officers in the stock of Light & Wonder, or a
person’s service either as a director or officer of both companies, could create or appear to create conflicts of interest when those directors and officers are
faced with decisions relating to our company. These decisions could include:

•
corporate opportunities;
•
the impact that operating decisions for our business may have on Light & Wonder’s consolidated financial statements;
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•
differences in tax positions between Light & Wonder and us, especially in light of the TRA (see “Risks Related to Our Organizational Structure
and the TRA”);
•
the impact that operating or capital decisions (including the incurrence of indebtedness) for our business may have on Light & Wonder’s current or
future indebtedness or the covenants under that indebtedness;
•
future, potential commercial arrangements between Light & Wonder and us or between Light & Wonder and third parties;
•
business combinations involving us;
•
our dividend policy;
•
management stock ownership; and
•
the intercompany agreements between Light & Wonder and us.
Furthermore, disputes may arise between Light & Wonder and us relating to our past and ongoing relationship and these conflicts of interest may
make it more difficult for us to favorably resolve such disputes, including those related to:

•
tax, employee benefits, indemnification and other matters arising from the IPO;
•
the nature, quality and pricing of services Light & Wonder agrees to provide to us;
•
sales or other disposals by the L&W Member of all or a portion of its ownership interests in SciPlay Parent LLC or us; and
•
business combinations involving us.
We may not be able to resolve any conflicts, and even if we do, the resolution may be less favorable to us than if we were dealing with an
unaffiliated party. While we are controlled by Light & Wonder, we may not have the leverage to negotiate amendments to our agreements with Light &
Wonder, if required, on terms as favorable to us as those we would negotiate with an unaffiliated third party.
Certain of our directors and executive officers may have actual or potential conflicts of interest because of their positions with Light & Wonder.
Antonia Korsanos is the Chair of our board of directors and also serves as Executive Vice Chair of the board of Light & Wonder. Constance James
is a director on our board of directors and also serves as the Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary of Light
& Wonder. Their positions at Light & Wonder and the ownership of any Light & Wonder equity or equity awards creates, or may create the appearance of,
conflicts of interest when they are faced with decisions that could have different implications for Light & Wonder than the decisions have for us.
Our articles of incorporation limit Light & Wonder’s and its directors’ and officers’ liability to us or our stockholders for breach of fiduciary duty and
could also prevent us from benefiting from corporate opportunities that might otherwise have been available to us.
Our articles of incorporation provide that, subject to any contractual provision to the contrary, Light & Wonder has no obligation to refrain from:

•
engaging in the same or similar business activities or lines of business as we do;
•
doing business with any of our clients, consumers, vendors or lessors;
•
employing or otherwise engaging any of our officers or employees; or
•
making investments in any property in which we may make investments.
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Under our articles of incorporation, neither Light & Wonder nor any officer or director of Light & Wonder, except as provided in our articles of
incorporation, is liable to us or to our stockholders for breach of any fiduciary duty by reason of any of these activities.
Additionally, our articles of incorporation include a “corporate opportunity” provision in which we renounce any interests or expectancy in
corporate opportunities which become known to (i) any of our directors or officers who are also directors, officers, employees or other affiliates of Light &
Wonder or its affiliates (except that we and our subsidiaries shall not be deemed affiliates of Light & Wonder or its affiliates for the purposes of the
provision), or dual persons, or (ii) Light & Wonder itself, and which relate to the business of Light & Wonder or may constitute a corporate opportunity for
both Light & Wonder and us. Generally, neither Light & Wonder nor our directors or officers who are also dual persons is liable to us or our stockholders
for breach of any fiduciary duty by reason of the fact that any such person pursues or acquires any corporate opportunity for the account of Light & Wonder
or its affiliates, directs, recommends, sells, assigns or otherwise transfers such corporate opportunity to Light & Wonder or its affiliates, or does not
communicate information regarding such corporate opportunity to us. The corporate opportunity provision may exacerbate conflicts of interest between
Light & Wonder and us because the provision effectively permits one of our directors or officers who also serves as a director, officer, employee or other
affiliate of Light & Wonder to choose to direct a corporate opportunity to Light & Wonder instead of us.
Light & Wonder is not restricted from competing with us in the social gaming business, including as a result of acquiring a company that operates
a social gaming business. Due to the significant resources of Light & Wonder, including its intellectual property (all of which Light & Wonder will retain
and certain of which it licenses to us under the IP License Agreement), financial resources, name recognition and know-how resulting from the previous
management of our business, Light & Wonder could have a significant competitive advantage over us should it decide to utilize these resources to engage
in the type of business we conduct, which may cause our operating results and financial condition to be materially adversely affected.

Third parties may seek to hold us responsible for liabilities of Light & Wonder, and we may share responsibility for liabilities for which third parties
hold Light & Wonder responsible, both of which could result in a decrease in our income.
Third parties may seek to hold us responsible for Light & Wonder’s liabilities, and we may share responsibility for liabilities attributed to Light &
Wonder. If those liabilities are significant and we are ultimately held liable for them, we cannot assure that we will be able to recover the full amount of our
losses from Light & Wonder. In November 2021, Light & Wonder entered into an agreement in principle to settle a previously disclosed lawsuit from 2018
brought in Washington State related to Light & Wonder’s online social casino games. Given that the matter related to our games as a legacy business within
Light & Wonder, we paid the settlement amount of $24.5 million in the third quarter of 2022. Similar situations may occur in the future.
We are a “controlled company” within the meaning of the Nasdaq rules and, as a result, qualify for, and rely on, exemptions from certain corporate
governance requirements.
Light & Wonder controls a majority of our combined voting power. As a result, we are a “controlled company” within the meaning of the
corporate governance standards of the Nasdaq rules. Under these rules, a listed company of which more than 50% of the voting power is held by an
individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including:

•
the requirement that a majority of its board of directors consist of independent directors;
•
the requirement that its director nominations be made, or recommended to the full board of directors, by its independent directors or by a
nominations committee that is comprised entirely of independent directors and that it adopt a written charter or board resolution addressing the
nominations process; and
•
the requirement that it have a compensation committee that is composed entirely of independent directors with a written charter addressing the
committee’s purpose and responsibilities.
As a “controlled company”, our stockholders do not have the same protections afforded to stockholders of companies that are subject to all of the
corporate governance requirements of the Nasdaq rules. We may choose to rely on additional exemptions in the future so long as we qualify as a
“controlled company”.

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

•
allowing investors to evaluate the distinct merits, performance and future prospects of our business, independent of Light & Wonder’s other
businesses;
•
improving our strategic and operational flexibility and increasing management focus as we continue to implement our strategic plan and allowing
us to respond more effectively to different player needs and the competitive environment for our business;
•
allowing us to adopt a capital structure better suited to our financial profile and business needs, without competing for capital with Light &
Wonder’s other businesses;
•
creating an independent equity structure that will facilitate our ability to effect future acquisitions utilizing our capital stock; and
•
facilitating incentive compensation arrangements for employees more directly tied to the performance of our business, and enhancing employee
hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth
objectives of our business.
We may not achieve the anticipated benefits of being a standalone public company for a variety of reasons, and it could adversely affect our
operating results and financial condition.
We rely on our access to Light & Wonder’s brands and reputation, some of Light & Wonder’s relationships, and the brands and reputations of
unaffiliated third parties.
We believe the association with Light & Wonder has contributed to our building relationships with our players due to its recognized brands and
products, as well as resources such as Light & Wonder’s intellectual property and access to third parties’ intellectual property. Any perceived or actual loss
of Light & Wonder’s scale, capital base and financial strength may prompt business partners to reprice, modify or terminate their relationships with us.
For more detail regarding our reliance on access to intellectual property owned by Light & Wonder, see “We rely on the ability to use the
intellectual property rights of Light & Wonder and other third parties, including the third-party intellectual property rights licensed to Light & Wonder that
we have enjoyed as an indirect subsidiary of Light & Wonder, and we may lose the benefit of any intellectual property owned by or licensed to Light &
Wonder if it ceases to hold certain minimum percentages of the voting power in our company.”

In addition, we believe that the success of certain of our games depends on the popularity of intellectual property or brands of third parties that are
incorporated into their player experience. For example, the success of our MONOPOLY® Slots game is based in part on the strength of the MONOPOLY™
brand, which is owned and managed by unaffiliated third parties. We cannot assure the continued popularity of any of the intellectual property or brands
that are incorporated into our games, and a loss of such popularity may result in decreased interest in our games.
The services that we receive from Light & Wonder may not be sufficient for us to operate our business, and we would likely incur significant
incremental costs if we lost access to Light & Wonder’s services.
We have obtained, and will need to continue to obtain, services from Light & Wonder relating to many important corporate functions under an
intercompany services agreement. Our financial statements reflect charges for these services based on the intercompany services agreement we entered into
in September 2016. Many of these services are governed by the intercompany services agreement entered into in connection with the IPO (“Intercompany
Services Agreement”) with Light & Wonder. Under the Intercompany Services Agreement, we are able to continue to use these Light & Wonder services
for a fixed term established on a service-by-service basis. We generally have the right to terminate a service before its stated termination date if we give
notice to Light & Wonder. Partial reduction in the provision of any service will require Light & Wonder’s consent. In addition, either party is able to
terminate the Intercompany Services Agreement due to a material
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breach of the other party, upon prior written notice, subject to limited cure periods. We pay Light & Wonder mutually agreed-upon fees for these services,
which is based on Light & Wonder’s costs of providing the services.
If we lost access to the services provided to us by Light & Wonder under the Intercompany Services Agreement, we would need to replicate or
replace certain functions, systems and infrastructure. We may also need to make investments or hire additional employees to operate without the same
access to Light & Wonder’s existing operational and administrative infrastructure. These initiatives may be costly to implement. Due to the scope and
complexity of the underlying projects relative to these efforts, the amount of total costs could be materially higher than our estimate, and the timing of the
incurrence of these costs could be subject to change.
We may not be able to replace these services or enter into appropriate third-party agreements on terms and conditions, including cost, comparable
to those that we have received in the past and will continue to receive from Light & Wonder under the Intercompany Services Agreement.
Additionally, if the Intercompany Services Agreement is terminated, we may be unable to sustain the services at the same levels or obtain the
same benefits as when we were receiving such services and benefits from Light & Wonder. If we have to operate these functions separately, if we do not
have our own adequate systems and business functions in place or if we are unable to obtain them from other providers, we may not be able to operate our
business effectively or at comparable costs, and our profitability may decline. In addition, we have historically received informal support from Light &
Wonder, which may not be addressed in our Intercompany Services Agreement. The level of this informal support could diminish or be eliminated.
While we are controlled by Light & Wonder, we may not have the leverage to negotiate amendments to our agreements with Light & Wonder, if
required, on terms as favorable to us as those we would negotiate with an unaffiliated third party.
Risks Related to Our Organizational Structure and the TRA
Our sole material asset is our interest in SciPlay Parent LLC, and, accordingly, we depend on distributions from SciPlay Parent LLC to pay our taxes
and expenses, including payments under the TRA. SciPlay Parent LLC’s ability to make such distributions have been and may be subject to various
limitations and restrictions.
We are a holding company and have no material assets other than our ownership of LLC Interests of SciPlay Parent LLC. As such, we have no
independent means of generating revenue or cash flow, and our ability to pay our taxes and operating expenses or declare and pay dividends in the future, if
any, is dependent upon the financial results and cash flows of SciPlay Parent LLC and its subsidiaries and distributions we receive from SciPlay Parent
LLC. We cannot assure that our subsidiaries will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual
restrictions will permit such distributions.
SciPlay Parent LLC is treated as a partnership for U.S. federal income tax purposes and, as such, generally is not subject to any entity-level U.S.
federal income tax. Instead, taxable income is allocated to holders of LLC Interests, including us. Accordingly, we will incur income taxes on our allocable
share of any net taxable income of SciPlay Parent LLC. Under the terms of the Operating Agreement, SciPlay Parent LLC is obligated to make tax
distributions to holders of LLC Interests, including us. In addition to tax expenses, we also incur expenses related to our operations, including payments
under the TRA, which we expect to be substantial. We intend, as its sole manager, to cause SciPlay Parent LLC to make cash distributions to the owners of
LLC Interests in an amount sufficient to (i) fund all or part of such members’ tax obligations in respect of taxable income allocated to such members and
(ii) cover our operating expenses, including ordinary course payments under the TRA. However, SciPlay Parent LLC’s ability to make such distributions
may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which
SciPlay Parent LLC is then a party, or any applicable law, or that would have the effect of rendering SciPlay Parent LLC insolvent. Moreover, the terms
governing the Revolver generally do not permit SciPlay Parent LLC, as a guarantor of the Revolver, to make distributions sufficient to allow us to make
early termination payments under the TRA. If we do not have sufficient funds to pay tax or other liabilities or to fund our operations, we may have to
borrow funds, which could materially adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such
lenders. To the extent that we are unable to make payments under the TRA for any reason, the unpaid amounts will accrue interest until paid. Our failure to
make any payment required under the TRA (including any accrued and unpaid interest) within 30 calendar days of the date on which the payment is
required to be made will constitute a material breach of a material obligation under the TRA, which will terminate the TRA and accelerate future payments
thereunder, unless the applicable payment is not made because (i) we are prohibited from making such payment under the terms of the TRA or the terms
33

governing certain of our secured indebtedness or (ii) we do not have, and cannot use commercially reasonable efforts to obtain, sufficient funds to make
such payment. Any late payments will continue to accrue interest at one-month LIBOR plus 500 basis points until such payments are made. It will also
constitute a material breach of a material obligation under the TRA if we make a distribution of cash or other property (other than shares of our Class A
common stock) to our stockholders or use cash or other property to repurchase any of our capital stock (including our Class A common stock), in each case
while any outstanding payments under the TRA are unpaid. In addition, if SciPlay Parent LLC does not have sufficient funds to make distributions, our
ability to declare and pay cash dividends will also be restricted or impaired.
The TRA with the L&W Member requires us to make cash payments to the L&W Member in respect of certain tax benefits to which we may become
entitled, and the payments we are required to make have been and will be substantial.
We are a party to the TRA with the L&W Member and SciPlay Parent LLC. Under the TRA, we are required to make cash payments to the L&W
Member equal to 85% of the tax benefits, if any, that we actually realize, or in certain circumstances are deemed to realize, as a result of (1) the increases in
the tax basis of assets of SciPlay Parent LLC (a) in connection with the IPO, including as a result of the Upfront License Payment, (b) resulting from any
redemptions or exchanges of LLC Interests by the L&W Member pursuant to the Operating Agreement or (c) resulting from certain distributions (or
deemed distributions) by SciPlay Parent LLC and (2) certain other tax benefits related to our making of payments under the TRA. We expect that the
amount of the cash payments that we will be required to make under the TRA will be substantial. Any payments made by us to the L&W Member under
the TRA will generally reduce the amount of cash that might have otherwise been available to us. In addition, we are obligated to use commercially
reasonable efforts to avoid entering into any agreements that could be reasonably anticipated to materially delay the timing of the making of any payments
under the TRA, which could limit our ability to pursue strategic transactions. Furthermore, our future obligations to make payments under the TRA could
make us a less attractive target for an acquisition, particularly in the case of an acquirer that cannot use some or all of the tax benefits that are the subject of
the TRA.
The actual amount and timing of any payments under the TRA will vary depending upon a number of factors, including the timing of redemptions
or exchanges by the L&W Member, the amount of gain recognized by the L&W Member, the amount and timing of the taxable income we generate, and
the applicable tax rates and laws. Such aggregate cash payments made to the L&W Member during the years ended December 31, 2022 and 2021 were
$3.8 million and $3.8 million, respectively.
In certain cases, future payments under the TRA to the L&W Member may be accelerated or significantly exceed the actual benefits we realize in
respect of the tax attributes subject to the TRA.
The TRA provides that if (i) we materially breach any of our material obligations under the TRA, including if we make any distribution of cash or
property (other than shares of our Class A common stock) to our stockholders or any repurchase of our capital stock (including our Class A common stock)
before all our payment obligations under the TRA have been satisfied for all prior taxable years, (ii) certain mergers, asset sales, other forms of business
combination or other changes of control (including under certain material indebtedness of SciPlay Parent LLC or its subsidiary) were to occur, or (iii) we
elect an early termination of the TRA, then our future obligations, or our successor’s future obligations, under the TRA to make payments thereunder
would accelerate and become due and payable, based on certain assumptions, including an assumption that we would have sufficient taxable income to
fully utilize all potential future tax benefits that are subject to the TRA, and an assumption that, as of the effective date of the acceleration, any L&W
Member that has LLC Interests not yet exchanged shall be deemed to have exchanged such LLC Interests on such date, even if we do not receive the
corresponding tax benefits until a later date when the LLC Interests are actually exchanged.
As a result of the foregoing, we would be required to make an immediate cash payment equal to the estimated present value of the anticipated
future tax benefits that are the subject of the TRA, which payment may be made significantly in advance of the actual realization, if any, of those future tax
benefits and, therefore, we could be required to make payments under the TRA that are greater than the specified percentage of the actual tax benefits we
ultimately realize. In addition, to the extent that we are unable to make payments under the TRA for any reason, the unpaid amounts will accrue interest
until paid. Our failure to make any payment required under the TRA (including any accrued and unpaid interest) within 30 calendar days of the date on
which the payment is required to be made will constitute a material breach of a material obligation under the TRA, which will terminate the TRA and
accelerate future payments thereunder, unless the applicable payment is not made because (i) we are prohibited from making such payment under the terms
of the TRA or the terms governing certain of our secured indebtedness or (ii) we do not have, and cannot use commercially reasonable efforts to obtain,
sufficient funds to make such payment. In these situations, our obligations under the TRA could have a substantial negative impact on our liquidity and
could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business
34

combinations or other changes of control. We cannot assure that we will be able to fund or finance our obligations under the TRA.

We will not be reimbursed for any payments made to the L&W Member under the TRA in the event that any tax benefits are disallowed.
Payments under the TRA are based on the tax reporting positions that we determine, and the IRS or another tax authority may challenge all or part
of the tax basis increases, as well as other related tax positions we take, and a court could sustain any such challenge. Our ability to settle or to forgo
contesting such challenges may be restricted by the rights of the L&W Member pursuant to the TRA, and such restrictions apply for as long as the TRA
remains in effect. In addition, we will not be reimbursed for any cash payments previously made to the L&W Member under the TRA in the event that any
tax benefits initially claimed by us and for which payment has been made to the L&W Member are subsequently challenged by a taxing authority and are
ultimately disallowed. Instead, any excess cash payments made by us to the L&W Member will be netted against any future cash payments that we might
otherwise be required to make to the L&W Member under the terms of the TRA. However, we might not determine that we have effectively made an
excess cash payment to the L&W Member for a number of years following the initial time of such payment. As a result, payments could be made under the
TRA in excess of the tax savings that we realize in respect of the tax attributes with respect to the L&W Member that are the subject of the TRA.
If we were deemed to be an investment company under the Investment Company Act of 1940 as a result of our ownership of SciPlay Parent LLC,
applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our
business.
Under Sections 3(a)(1)(A) and (C) of the Investment Company Act of 1940, as amended (the “1940 Act”), a company generally will be deemed to
be an “investment company” for purposes of the 1940 Act if (1) it is, or holds itself out as being, engaged primarily, or proposes to engage primarily, in the
business of investing, reinvesting or trading in securities or (2) it engages, or proposes to engage, in the business of investing, reinvesting, owning, holding
or trading in securities and it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of
U.S. government securities and cash items) on an unconsolidated basis. We do not believe that we are an “investment company,” as such term is defined in
either of those sections of the 1940 Act.
As the sole manager of SciPlay Parent LLC, we control SciPlay Parent LLC. On that basis, we believe that our interest in SciPlay Parent LLC is
not an “investment security” as that term is used in the 1940 Act. However, if we were to cease participation in the management of SciPlay Parent LLC, our
interest in SciPlay Parent LLC could be deemed an “investment security” for purposes of the 1940 Act.
We and SciPlay Parent LLC intend to conduct our operations so that we are not be deemed an investment company. However, if we were to be
deemed an investment company, restrictions imposed by the 1940 Act, including limitations on our capital structure and our ability to transact with
affiliates, could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

Risks Related to Ownership of Our Class A Common Stock
We are an “emerging growth company,” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will
make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act, and we could be an emerging growth company for up to five years following
the completion of the IPO. For as long as we continue to be an emerging growth company, we may choose to take advantage of certain exemptions from
various reporting requirements that are applicable to other public companies, including, but not limited to: (i) not being required to comply with the auditor
attestation requirements of Section 404, (ii) reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements
and (iii) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden
parachute payments not previously approved. In addition, as an emerging growth company, we are only required to provide two years of audited financial
statements and two years of selected financial data in our prospectus dated May 2, 2019, filed with the SEC on May 6, 2019 pursuant to Rule 424(b) of the
Securities Act of 1933, as amended (referred to herein as the “Prospectus”). We currently intend to take advantage of each of the reduced reporting
requirements and exemptions described above. We cannot predict if investors will find our shares less attractive as a result of our taking advantage of these
exemptions. If some investors find our shares less attractive as a result, there may be a less active trading market for our shares and our stock price may be
more volatile.
35

Our status as an emerging growth company will end as soon as any of the following takes place:

•
the last day of the fiscal year in which we have more than $1.235 billion in annual revenue;
•
the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates;
•
the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or
•
the last day of the fiscal year (2024) ending after the fifth anniversary of the completion of the IPO.
The dual class structure of our common stock may adversely affect the trading price or liquidity of our Class A common stock.
On matters submitted to a vote of our stockholders, our Class B common stock has ten votes per share (for so long as the number of shares of our
common stock beneficially owned by the L&W Member and its affiliates represents at least 10% of our outstanding shares of common stock and,
thereafter, one vote per share) and our Class A common stock has one vote per share. These differences in voting rights may adversely affect the market
price of our Class A common stock to the extent that any current or future investor in our common stock ascribes value to the voting rights associated with
the Class B common stock. The existence of dual classes of our common stock could result in less liquidity for any such class than if there were only one
class of our capital stock.
In addition, S&P Dow Jones and FTSE Russell announced changes to their eligibility criteria for inclusion of shares of public companies on
certain indices that will exclude companies with multiple classes of shares of common stock from being added to such indices. In addition, several
shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class structure of our common stock
may prevent the inclusion of our Class A common stock in such indices and may cause shareholder advisory firms to publish negative commentary about
our corporate governance practices or otherwise seek to cause us to change our capital structure. Any such exclusion from indices could result in a less
active trading market for our Class A common stock. Any actions or publications by shareholder advisory firms critical of our corporate governance
practices or capital structure could also adversely affect the value of our Class A common stock.
The requirements of being a public company, particularly after we lose our status as an “emerging growth company”, require significant resources and
management attention and affect our ability to attract and retain executive management and qualified board members.
As a public company, we incur legal, accounting and other expenses and may incur further expenses after we are no longer an “emerging growth
company.”
Pursuant to Section 404, once we are no longer an emerging growth company, we may be required to furnish an attestation report on internal
control over financial reporting issued by our independent registered public accounting firm. When our independent registered public accounting firm is
required to undertake an assessment of our internal control over financial reporting, the cost of complying with Section 404 will significantly increase, and
management’s attention may be diverted from other business concerns, which could adversely affect our business and results of operations. We may need to
hire more employees in the future or engage outside consultants to comply with the requirements of Section 404, which will further increase our cost and
expense. In addition, enhanced legal and regulatory regimes and heightened standards relating to corporate governance and disclosure for public companies
result in increased legal and financial compliance costs and make some activities more time-consuming.
If we fail to maintain effective internal control over financial reporting and disclosure controls and procedures, we may suffer harm to our reputation
and investor confidence level.
If we fail to implement the requirements of Section 404(b) in the required timeframe once we are no longer an emerging growth company, we may
be subject to sanctions or investigations by regulatory authorities, including the SEC and the Nasdaq. Furthermore, if we are unable to continue to conclude
that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy and completeness of our financial reports,
the market price of shares of our Class A common stock could decline, and we could be subject to sanctions or investigations by regulatory
36

authorities. Failure to maintain effective internal control over financial reporting and disclosure controls and procedures required of public companies or
when necessary implement new or improved controls that provide reasonable assurance of the reliability of the financial reporting and preparation of our
financial statements for external use could also restrict our future access to the capital markets. As of December 31, 2022, we have concluded that our
internal control over financial reporting was effective based on criteria outlined in Part II, Item 9A “Controls and Procedures” of this Annual Report on
Form 10-K, however, we cannot assure that material weaknesses will not be identified in the future.
The L&W Member has the right to have its LLC Interests redeemed or exchanged into shares of Class A common stock, which, if exercised, will dilute
our stockholders’ economic interest in SciPlay.
As of December 31, 2022, we have an aggregate of 600,119,662 shares of Class A common stock authorized but unissued, including 103,547,021
shares of Class A common stock issuable upon redemption or exchange of LLC Interests that are held by the L&W Member. SciPlay Parent LLC entered
into the Operating Agreement and, subject to certain restrictions set forth therein, the L&W Member is entitled to have its LLC Interests redeemed or
exchanged for shares of our Class A common stock or, at our option, cash.
Shares of our Class B common stock will be canceled on a one-for-one basis whenever the L&W Member’s LLC Interests are so redeemed or
exchanged. While any redemption or exchange of LLC Interests and corresponding cancellation of our Class B common stock will reduce the L&W
Member’s economic interest in SciPlay Parent LLC and its voting interest in us, the related issuance of our Class A common stock will dilute our
stockholders’ economic interest in SciPlay. We cannot predict the timing or size of any future issuances of our Class A common stock resulting from the
redemption or exchange of LLC Interests.
Future issuances or resales of Class A common stock by the L&W Member or others, or the perception that such issuances or resales may occur, could
cause the market price of our Class A common shares to decline.
We entered into the Registration Rights Agreement with the L&W Member, pursuant to which the shares of Class A common stock issued to the
L&W Member upon redemption or exchange of LLC Interests will be eligible for resale, subject to certain limitations set forth therein. Any shares issued
under our equity incentive plans pursuant to one or more effective registration statements will be eligible for sale in the public market, except to the extent
that they are restricted by lock-up agreements and subject to compliance with Rule 144 in the case of our affiliates.
We cannot predict the size of future issuances of our Class A common stock or the effect, if any, that future issuances and sales of shares of our
Class A common stock, including upon the redemption or exchange of LLC Interests, may have on the market price of our Class A common stock. Sales or
distributions of substantial amounts of our Class A common stock, including shares issued in connection with an acquisition, or the perception that such
sales or distributions could occur, may cause the market price of our Class A common stock to decline.
We do not currently intend to pay dividends on our Class A common stock.
We have never paid any cash dividends on our common stock and do not presently intend to pay cash dividends on our common stock. However,
we reconsider our dividend policy on a regular basis and may determine in the future to declare or pay cash dividends on our common stock. Therefore, our
stockholders may not receive any dividends on their Class A common stock for the foreseeable future, and the success of an investment in our Class A
common stock will depend upon any future appreciation in its value. Moreover, any ability to pay dividends will be restricted by the terms of the Revolver,
and may also be restricted by the terms of any future credit agreement or any future debt or preferred equity securities of us or our subsidiaries.
Consequently, investors may need to sell all or part of their holdings of our Class A common stock after price appreciation, which may never occur, as the
only way to realize any future gains on their investment.
Provisions in our articles of incorporation, bylaws and Nevada law may prevent or delay an acquisition of us, which could decrease the trading price of
our Class A common stock.
Our articles of incorporation and bylaws contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids and
to encourage prospective acquirers to negotiate with our board of directors rather than to attempt an unsolicited bid to acquire our company. These
provisions include:

•
rules regarding how our stockholders may present proposals or nominate directors for election at stockholder meetings;
37

•
empowering only the board of directors to fill any vacancy on our board of directors, whether such vacancy occurs as a result of an increase in the
number of directors or otherwise;
•
the absence of cumulative voting rights in the election of directors;
•
limiting the ability of stockholders to act by written consent or to call special meetings after Light & Wonder ceases to beneficially own, directly
or indirectly, more than 50% of our combined voting power; and
•
the right of our board of directors to issue preferred stock without stockholder approval.
These provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many
stockholders. Nevada law could also prevent attempts by our stockholders to replace or remove our current management and incumbent directors. As a
result, stockholders may be limited in their ability to obtain a premium for their shares or control our management or board.
We may issue shares of preferred stock in the future, which could make it difficult for another company to acquire us or could otherwise adversely
affect holders of our Class A common stock, which could depress the price of our Class A common stock.
Our articles of incorporation authorize us to issue one or more series of preferred stock. Our board of directors will have the authority to determine
the preferences, limitations and relative rights of the shares of preferred stock and to fix the number of shares constituting any series and the designation of
such series, without any further vote or action by our stockholders. Our preferred stock could be issued with voting, liquidation, dividend and other rights
superior to the rights of our Class A common stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discourage
bids for our Class A common stock at a premium to the market price, and materially and adversely affect the market price and the voting and other rights of
the holders of our Class A common stock.
The provisions of our articles of incorporation and bylaws requiring exclusive forum in the Eighth Judicial District Court of Clark County, Nevada for
certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
Our articles of incorporation and bylaws provide that, to the fullest extent permitted by law, and unless we consent in writing to the selection of an
alternative forum, the Eighth Judicial District Court of Clark County, Nevada, will be the sole and exclusive forum for any actions, suits or proceedings,
whether civil, administrative or investigative (i) brought in our name or right or on our behalf, (ii) asserting a claim for breach of any fiduciary duty owed
by any of our directors, officers, employees or agents to us or our stockholders, (iii) arising or asserting a claim arising pursuant to any provision of Nevada
Revised Statutes, Chapters 78 or 92A or any provision of our articles of incorporation or our bylaws, (iv) to interpret, apply, enforce or determine the
validity of our articles of incorporation and bylaws or (v) asserting a claim governed by the internal affairs doctrine; provided that the exclusive forum
provisions will not apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act, or to any claim for which the
federal courts have exclusive jurisdiction. Our articles of incorporation and bylaws further provide that, in the event that the Eighth Judicial District Court
of Clark County, Nevada does not have jurisdiction over any such action, suit or proceeding, then any other state district court located in the State of
Nevada will be the sole and exclusive forum therefor and in the event that no state district court in the State of Nevada has jurisdiction over any such
action, suit or proceeding, then a federal court located within the State of Nevada will be the sole and exclusive forum therefor. Although we believe these
provisions benefit us by providing increased consistency in the application of Nevada law in the types of lawsuits to which they apply, these provisions
may have the effect of increasing the costs to bring a claim and limiting a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for
disputes with us or our directors and officers, which may discourage lawsuits against us or our directors and officers. The enforceability of similar choice of
forum provisions in other companies’ articles of incorporation and bylaws has been challenged in legal proceedings, and it is possible that, in connection
with any applicable action brought against us, a court could find the choice of forum provisions contained in our articles of incorporation and bylaws to be
inapplicable or unenforceable in such action. If a court were to find the choice of forum provisions contained in our articles of incorporation and bylaws to
be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could
adversely affect our business, financial condition or results of operations.
General Risk Factors
We are and may be in the future subject to securities class action, which may harm our business and operating results.
38

Companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We are and may
be the target of this type of litigation in the future. Securities litigation against us may result in substantial costs and damages, and divert management’s
attention from other business concerns, which may seriously harm our business, results of operations, financial condition or cash flows. For example, 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”). On November 24, 2021, the New York court entered
an order fully and finally approving the settlement agreement and dismissing the complaint in the consolidated action in its entirety. As another example,
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, L&W, and SciPlay’s underwriters with respect to the SciPlay IPO. On December 3, 2021, the Nevada court ordered the dismissal of the
Nevada lawsuit with prejudice. Plaintiffs may bring similar securities litigation against us in the future. For additional information regarding our litigation,
see Note 11.
We may also be called on to defend ourselves against lawsuits relating to our business operations. Some of these claims may seek significant
damage amounts due to the nature of our business. Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any
such proceedings. A future unfavorable outcome in a legal proceeding could have an adverse impact on our business, financial condition and results of
operations. In addition, current and future litigation, regardless of its merits, could result in substantial legal fees, settlement or judgment costs and a
diversion of management’s attention and resources that are needed to successfully run our business. For additional information regarding our litigation, see
Note 11.
Our inability to complete acquisitions and integrate those businesses successfully could limit our growth or disrupt our plans and operations.
From time to time, we pursue strategic acquisitions, such as our acquisition of Koukoi Games Oy (“Koukoi”) in July 2021 and Alictus in March
2022. Our ability to succeed in implementing our strategy will depend to some degree upon our ability to identify and complete commercially viable
acquisitions. We cannot assure that acquisition opportunities will be available on acceptable terms or at all, or that we will be able to obtain necessary
financing or regulatory approvals to complete potential acquisitions.
We may not be able to successfully integrate any businesses that we acquire or do so within the intended timeframes. We could face significant
challenges in managing and integrating our acquisitions and our combined operations, including acquired assets, operations and personnel. Our recent
acquisition of Alictus has required us to take certain actions to appropriately integrate its advertisement revenue model into our operations. In addition, the
expected cost synergies or any other anticipated benefits associated with such acquisitions may not be fully realized in the anticipated amounts or within
the contemplated timeframes or cost expectations, which could result in increased costs and have an adverse effect on our prospects, results of operations,
cash flows and financial condition. We would expect to incur incremental costs and capital expenditures related to integration activities.
Acquisition transactions may disrupt our ongoing business. The integration of acquisitions requires significant time and focus from management
and might divert attention from the day-to-day operations of the combined business or delay the achievement of our strategic objectives.

Failure in pursuing or executing new business initiatives could have a material adverse impact on our business and future growth.
Our growth strategy includes evaluating, considering and effectively executing new business initiatives including mergers and acquisitions
(“M&A”), which can be difficult. Management may not properly ascertain or assess the risks of new initiatives or M&A integration, and subsequent events
may alter the risks that were evaluated at the time we decided to execute any new initiative. In particular, initiatives may be subject to intense competition
due to low barriers to entry and the difficulty of differentiating games or M&A might not yield expected benefits and synergies. Entering into any new
initiative can also divert our management’s attention from other business issues and opportunities. Failure to effectively identify, pursue and execute new
business initiatives and fully realize expected M&A benefits, may adversely affect our reputation, business, financial condition and results of operations.

Our business may suffer if we do not successfully manage our current and potential future growth.
We have grown significantly in recent years and we intend to continue to expand the scope and geographic reach of the games we provide. Our
total revenue increased to $671.0 million in 2022, from $606.1 million in 2021, and $582.2 million in 2020. Our anticipated future growth will likely place
significant demands on our management and operations. Our
39

success in managing our growth will depend, to a significant degree, on the ability of our executive officers and other members of senior management to
operate effectively, and on our ability to improve and develop our financial and management information systems, controls and procedures. In addition, we
will likely have to successfully adapt our existing systems and introduce new systems, expand, train and manage our employees and improve and expand
our sales and marketing capabilities.
If we are unable to properly and prudently manage our operations as they continue to grow, or if the quality of our games deteriorates due to
mismanagement, our brand name and reputation could be severely harmed, and our business, prospects, financial condition and results of operations could
be adversely affected.
We are subject to risks related to corporate and social responsibility and reputation.
Many factors influence our reputation, including the perception held by our customers, business partners and other key stakeholders. Our business
faces increasing scrutiny related to environmental, social and governance activities. We risk damage to our reputation if we fail to act responsibly in a
number of areas, such as diversity and inclusion, sustainability and social responsibility. Any harm to our reputation could impact employee engagement
and retention, our corporate culture and the willingness of customers and our partners to do business with us, which could have a material adverse effect on
our business, results of operations and cash flows.

Our results of operations, cash flows and financial condition could be affected by natural events in the locations in which we or our key providers or
suppliers operate.
We may be impacted by severe weather and other geological events, including hurricanes, earthquakes, floods or tsunamis, that could disrupt our
operations or the operations of our key providers or suppliers. Natural disasters or other disruptions at any of our facilities or our key providers’ or
suppliers’ facilities, such as AWS, Apple, Google, Facebook, Amazon and Microsoft, may impair or delay the operation, development or provision of our
games. While we insure against certain business interruption risks, we cannot assure that such insurance will compensate us for any losses incurred as a
result of natural or other disasters. Any serious disruption to our operations, or those of our key providers or suppliers could have a material adverse effect
on our results of operations, cash flows and financial condition.
Changes in tax laws or tax rulings, or the examination of our tax positions, could materially affect our financial condition and results of operations.
Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. Our existing
corporate structure and intercompany arrangements have been implemented in a manner we believe is in compliance with current prevailing tax laws.
However, the tax benefits that we intend to eventually derive could be undermined due to future changes in tax laws. In addition, the taxing
authorities in the U.S. and other jurisdictions where we do business regularly examine income and other tax returns and we expect that they may examine
our income and other tax returns. The ultimate outcome of these examinations cannot be predicted with certainty.
On August 16, 2022, the United States enacted the Inflation Reduction Act of 2022 (“IR Act”), which, among other things, introduces a 15%
minimum tax based on adjusted financial statement income of certain large corporations with a three-year average adjusted financial statement income in
excess of $1 billion and a 1% excise tax on corporate stock buybacks. Interim guidance on the application of the minimum tax and excise tax was issued on
December 27, 2022, but several aspects of the Inflation Reduction Act remain uncertain and the Treasury regulations implementing its provisions are
forthcoming. We are continuing to evaluate the IR Act and its potential impact on future periods.

Legal proceedings may materially adversely affect our business and our results of operations, cash flows and financial condition.
We have been party to, are currently party to, and in the future may become subject to additional, legal proceedings in the operation of our
business, including, but not limited to, with respect to consumer protection, gambling-related matters, employee matters, alleged service and system
malfunctions, alleged intellectual property infringement, claims relating to our contracts, licenses and strategic investments, alleged breaches of fiduciary
duties, alleged breaches of other certain governance documents and alleged violations of the securities laws in connection with the IPO. See Note 11 for
additional information.
40

For example, in 2018, the United States Court of Appeals for the Ninth Circuit decided that a social casino game produced by one of our
competitors should be considered illegal gambling under Washington state law. In April 2018, a putative class action lawsuit, Sheryl Fife v. Light &
Wonder Corp., was filed against our parent, Light & Wonder, in federal district court that is directed against certain of our social casino games, including
Jackpot Party® Casino. The plaintiff alleges substantially the same causes of action against our social casino games that are alleged with respect to Big
Fish Casino, including the allegation that our social casino games violate Washington State gambling laws. In November 2021, Light & Wonder entered
into an agreement in principle to settle the lawsuit for the amount of $24.5 million. Although the case was brought against Light & Wonder, pursuant to the
Intercompany Services Agreement, we fully paid the settlement amount during the third quarter of 2022 due to the matter arising as a result of our business.
See Note 11 for further discussion.
Additional legal proceedings targeting our social casino games and claiming violations of state or federal laws also could occur, based on the
unique and particular laws of each jurisdiction. We cannot predict the likelihood, timing or scope of the consequences of such an outcome, or the outcome
of any other legal proceedings to which we may be a party, any of which could have a material adverse effect on our results of operations, cash flows or
financial condition.
Our insurance may not provide adequate levels of coverage against claims.
We believe that we maintain insurance customary for businesses of our size and type. However, there are types of losses we may incur that cannot
be insured against or that we believe are not economically reasonable to insure. Moreover, any loss incurred could exceed policy limits and policy
payments made to us may not be made on a timely basis. Such losses could adversely affect our business prospects, results of operations, cash flows and
financial condition.

ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
We occupy approximately 60,000 square feet of space in the U.S. and approximately 44,000 square feet of space internationally. We believe that
these facilities are adequate for our business as presently conducted. Set forth below is an overview of the principal leased real estate properties:
Location
Sq. Ft
Tenancy
Austin, Texas
25,087
Lease
Cedar Falls, Iowa
35,332
Lease
Tel Aviv, Israel
32,292
Lease
ITEM 3. LEGAL PROCEEDINGS
For a description of our legal proceedings, see Note 11, which is incorporated by reference into this Item 3 of this Annual Report on Form 10-K.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
Market for Our Common Stock
Our outstanding common stock is listed for trading on the Nasdaq Global Select Market under the symbol “SCPL”. On February 24, 2023, the
closing sale price for our common stock on the Nasdaq Global Select Market was $16.36 per share. There was one holder of record of our Class A common
stock and two holders of record of our Class B common stock
41

as of February 24, 2023. This does not include the number of stockholders who hold shares of our common stock through banks, brokers or other financial
institutions.
Dividend Policy
We have never paid any cash dividends on our common stock and do not presently intend to pay cash dividends on our common stock in the
foreseeable future. Further, under the terms of certain of our debt agreements, we are limited in our ability to pay cash dividends or make certain other
restricted payments (other than stock dividends) on our common stock. For further discussion related to dividend restrictions, see Note 1.
Issuer Purchases of Equity Securities
We repurchased 1.3 million shares under the share repurchase program during the three months ended December 31, 2022.
(in millions, except for price per share)
ISSUER PURCHASES OF EQUITY SECURITIES
Period
Total Number of Shares Purchased as
Part of Publicly Announced Program
Average Price Paid
per Share
Total Cost of
Repurchase
Approximate Dollar Value of Shares
that May Yet Be Purchased Under the
Program
10/1/2022 - 10/31/2022
0.7 
$
12.82 
$
8.5 
$
33.3 
11/1/2022 - 11/30/2022
0.4 
$
14.67 
$
5.1 
$
28.2 
12/1/2022 - 12/31/2022
0.2 
$
15.80 
$
5.3 
$
22.9 
Total
1.3 
$
14.04 
$
18.9 
Stockholder Return Performance Graph
The following graph compares the cumulative total stockholder return over the fifteen quarters ended December 31, 2022 of our then outstanding
common stock, the Nasdaq Composite Index and indices of our peer group companies that operate in industries or lines of business similar to ours.
The Peer Group consists of Take-Two Interactive Software, Inc. (Nasdaq: TTWO) which acquired Zynga Inc. (Nasdaq: ZNGA) in May 2022,
Tencent Holdings Ltd. (OTC Market: TCTZF), Rovio Entertainment Oyj (OTC Market: ROVVF), Electronic Arts Inc. (Nasdaq: EA), Doubleu Games Co
Ltd (Korea Exchange: 192080), Playtika Ltd. (Nasdaq: PLTK), Playstudios (Nasdaq: MYPS), AppLovin (Nasdaq: APP) and Activision Blizzard Inc
(Nasdaq: ATVI).
The companies in our peer groups have been weighted based on their relative market capitalization each quarter. The graph assumes that $100 was
invested in our then outstanding common stock, the Nasdaq Composite Index and the peer group indices at the beginning of the eleven-quarter period and
that all dividends were reinvested. The comparisons are not intended to be indicative of future performance of our common stock.
42

5/7/2019
12/31/2019
12/31/2020
12/31/2021
12/31/2022
SciPlay Corp.
$
100.00 
$
81.88 
$
92.27 
$
91.81 
$
107.13 
Nasdaq Composite
$
100.00 
$
111.69 
$
161.86 
$
197.76 
$
133.42 
Peer Group
$
100.00 
$
75.73 
$
100.07 
$
91.42 
$
73.00 
ITEM 6. [RESERVED]
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is intended to enhance the reader’s understanding of our operations and current business environment and should be read
in conjunction with the description of our business (see Part I, Item 1 of this Annual Report on Form 10-K) and our Consolidated Financial Statements and
Notes (see Part IV, Item 15 of this Annual Report on Form 10-K).
This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 and should be read in conjunction with the disclosures and information contained and
referenced under “Forward-Looking Statements” and “Risk Factors” included in this Annual Report on Form 10-K.
BUSINESS OVERVIEW
43

We are a leading developer and publisher of digital games on mobile and web platforms. We operate primarily in the social gaming market, which
is characterized by gameplay online or on mobile devices, that is social, competitive, and self-directed in pace and session length. We also operate in the
hyper-casual market, which is characterized by simpler core loops and more repetitive gameplay than casual games. We generate a substantial portion of
our revenue from in-app purchases in the form of virtual coins, chips and cards, which players can use to play slot games, table games or bingo games.
Players who install our social games typically receive free coins, chips or cards upon the initial launch of the game and additional free coins, chips or cards
at specific time intervals. Players may exhaust the coins, chips or cards that they receive for free and may choose to purchase additional coins, chips or
cards in order to extend their time of game play. Once obtained, coins, chips and cards (either free or purchased) cannot be redeemed for cash nor
exchanged for anything other than game play within our apps. We generate additional revenue in the hyper-casual market from the receipt of advertising
revenue. Players who install our hyper-casual games receive free, unlimited gameplay that requires viewing of periodic in-game advertisements.
We currently offer a variety of social casino games, including Jackpot Party® Casino, Gold Fish® Casino, Quick Hit® Slots, 88 Fortunes® Slots,
MONOPOLY® Slots and Hot Shot Casino®. We continue to pursue our strategy of expanding into the casual games market. Current casual game titles
include Bingo Showdown®, Solitaire Pets™ Adventure and Backgammon Live as well as other titles in the hyper-casual market through our acquisition of
Alictus, including games such as Candy Challenge 3D™, Boss Life™ and Deep Clean Inc. 3D™. During the year ended December 31, 2022, we launched
seven hyper-casual games, including the top hits Master Doctor 3D and Fade Master 3D, and we continued development of SpellSpinner: Fantasy Quest, a
casual game. Our social casino games typically include slots-style game play and occasionally include table games-style game play, while our casual games
blend solitaire-style or bingo game play with adventure game features and our hyper-casual games include many simple core loop mechanics. All of our
games are offered and played across multiple platforms, including Apple, Google, Facebook, Amazon and Microsoft. In addition to our internally created
game content, our content library includes recognizable game content from Light & Wonder. This content allows players who like playing land-based game
content to enjoy some of those same titles in our free-to-play games. We have access to Light & Wonder’s library of more than 1,500 iconic casino titles,
including titles and content from third-party licensed brands such as MONOPOLY™ and JAMES BOND™. We believe our access to this content, coupled
with our years of experience developing in-house content, uniquely positions us to create compelling digital games.
Trends and Recent Updates
Throughout 2022, we deployed significant updates across a number of our portfolio games, and we expect to deploy further updates to games in
future years.
In March of 2022, we acquired privately held Alictus, a Turkey-based hyper-casual gaming studio, which has expanded our casual games portfolio
and allowed us to increase our advertising revenue.
On May 9, 2022, our Board of Directors approved a share repurchase program under which the Company is authorized to repurchase, from time to
time through May 9, 2024, up to an aggregate amount of $60.0 million of our outstanding Class A common stock. Repurchases may be made at the
discretion of the Board of Directors through one or more open market transactions, privately negotiated transactions, including block trades, accelerated
share repurchases, issuer tender offers or other derivative contracts or instruments, “10b5-1” plan, or other financial arrangements or other arrangements.
Since the initiation of the program and through February 24, 2023, we returned $41.7 million of capital to shareholders through the repurchase of
3.0 million shares of common stock.
2022 was another record year for total revenue, and we continue to see higher player engagement compared with the pre-COVID-19 time period.
Our year-over-year total revenue growth was 10.7%. This result is primarily attributable to the revenue generated by Jackpot Party® Casino and Quick
Hit® Slots, coupled with the additional revenue generated following our acquisition of Alictus, and partially offset by a decline in revenue generated by
Bingo Showdown®. We believe that there is an opportunity for continued improvement of operating results in 2023 and beyond, as we continue to execute
on our strategic game updates, enhanced analytics, international expansion, and an upcoming new game release.
44

KEY PERFORMANCE INDICATORS AND NON-GAAP MEASURES
We manage our business by tracking several key performance indicators, each of which is tracked by our internal analytics systems and more fully
described below and referred to in our discussion of operating results. Our key performance indicators are impacted by several factors that could cause
them to fluctuate on a quarterly basis, such as platform providers' policies, restrictions, seasonality, user connectivity and addition of new content to certain
portfolios of games. Future growth in players and engagement will depend on our ability to retain current players, attract new players, launch new games
and features and expand into new markets and distribution platforms.
For additional information on our strategy and key initiatives to date, see also “Strategy” in Part I, Item 1.
The KPIs discussed below include only in-app purchases, as advertising revenue is not material for the periods presented.
Mobile Penetration
Mobile penetration is defined as the percentage of total revenue generated from mobile platforms. We believe this indicator provides useful
information in understanding revenue generated from mobile platforms such as smartphones and tablets.
Average Monthly Active Users (MAU)
MAU is defined as the number of individual users who played a game during a particular month. An individual who plays multiple games or from
multiple devices may, in certain circumstances, be counted more than once. However, we use third-party data to limit the occurrence of multiple counting.
Average MAU for a period is the average of MAUs for each month for the period presented. We believe this indicator provides useful information in
understanding the number of users reached across our portfolio of games on a monthly basis.
Average Daily Active Users (DAU)
DAU is defined as the number of individual users who played a game on a particular day. An individual who plays multiple games or from
multiple devices may, in certain circumstances, be counted more than once. However, we use third-party data to limit the occurrence of multiple counting.
Average DAU for a period is the average of the monthly average DAUs for the period presented. We believe this indicator provides useful information in
understanding the number of users reached across our portfolio of games on a daily basis.
Average Revenue Per Daily Active User (ARPDAU)
ARPDAU is calculated by dividing revenue for the period by the average DAU for the period and then dividing by the number of days in the
period. We believe this indicator provides useful information reflecting game monetization.
Average Monthly Paying Users (MPU)
MPU is defined as the number of individual users who made an in-game purchase during a particular month. An individual who made purchases
in multiple games or from multiple devices may, in certain circumstances, be counted more than once. However, we use third-party data to limit the
occurrence of multiple counting. Average MPU for a period is the average of MPUs for each month for the period presented. We believe this indicator
provides useful information in understanding the number of users reached across our portfolio of games making in-game purchases on a monthly basis.
Average Monthly Revenue Per Paying User (AMRPPU)
AMRPPU is calculated by dividing average monthly revenue by average MPUs for the applicable time period. We
45

believe this indicator provides useful information reflecting game monetization.
Payer Conversion Rate
Payer conversion rate is calculated by dividing average MPU for the period by the average MAU for the same period. We believe this indicator
provides useful information reflecting game monetization.
Non-GAAP Financial Measures
Adjusted EBITDA, or AEBITDA, as used herein, is a non-GAAP financial measure that is presented as supplemental disclosure and is reconciled
to net income attributable to SciPlay as the most directly comparable GAAP measure as set forth in the below table. We define AEBITDA to include net
income attributable to SciPlay before: (1) net income attributable to noncontrolling interest; (2) interest expense; (3) income tax expense; (4) depreciation
and amortization; (5) restructuring and other, which includes charges or expenses attributable to: (a) employee severance; (b) management changes;
(c) restructuring and integration; (d) M&A and other, which includes: (i) M&A transaction costs; (ii) purchase accounting adjustments (including
contingent acquisition consideration); (iii) unusual items (including legal settlements related to major litigation); and (iv) other non-cash items; and
(e) cost-savings initiatives; (6) stock-based compensation; (7) loss (gain) on debt financing transactions; and (8) other (income) expense including foreign
currency (gains) and losses. We also use AEBITDA margin, a non-GAAP measure, which we calculate as AEBITDA as a percentage of revenue.
Our management uses AEBITDA and AEBITDA margin to, among other things: (i) monitor and evaluate the performance of our business
operations; (ii) facilitate our management’s internal comparisons of our historical operating performance and (iii) analyze and evaluate financial and
strategic planning decisions regarding future operating investments and operating budgets. In addition, our management uses AEBITDA and AEBITDA
margin to facilitate management’s external comparisons of our results to the historical operating performance of other companies that may have different
capital structures and debt levels.
Our management believes that AEBITDA and AEBITDA margin are useful as they provide investors with information regarding our financial
condition and operating performance that is an integral part of our management’s reporting and planning processes. In particular, our management believes
that AEBITDA is helpful because this non-GAAP financial measure eliminates the effects of restructuring, transaction, integration or other items that
management believes have less bearing on our ongoing underlying operating performance. Management believes AEBITDA margin is useful as it provides
investors with information regarding the underlying operating performance and margin generated by our business operations.
COMPONENTS OF RESULTS OF OPERATIONS
Revenue
We generate our revenue primarily from the sale of coins, chips and cards, which players of our games can use to play slot games, table games and
bingo games. Revenue from the sale of coins, chips and cards is generated on mobile and web platforms. Other revenue primarily represents advertising
revenue, which is generated from providing advertising platforms with access to our game software platform, which facilitates the placement of advertising
inventory. Advertising revenue was less than 4% of our total revenue for the year ended December 31, 2022. We expect our overall revenue to continue to
grow as we continue to increase our market share and execute our strategy. As player platform preferences change and continue to migrate to mobile, we
expect revenue generated on web platforms to continue to decline.
Operating Expenses
Operating expenses consist primarily of cost of revenue, sales and marketing expenses, general and administrative expenses, research and
development (“R&D”), depreciation and amortization (“D&A”), and restructuring and other expenses, each more fully described below. D&A expense is
excluded from cost of revenue and other operating expenses, and is separately presented on the consolidated statements of income.
46

Cost of Revenue
Cost of revenue consists primarily of fees paid to platform providers such as Facebook, Google, Apple, Amazon and Microsoft, which generally
represent approximately 30% of our revenue; usage based royalties (not subject to minimum guarantees), which include intellectual property royalties paid
to both affiliated and unaffiliated third parties; hosting fees; and other direct expenses incurred to generate revenue. We expect the aggregate amount of cost
of revenue to increase for the foreseeable future as we grow our revenue and expand our business.
Sales and Marketing
Sales and marketing expenses consist primarily of advertising costs related to marketing and player acquisition and retention, salaries and benefits
for our sales and marketing employees and fees paid to consultants. We intend to continue to invest in sales and marketing to grow our player base both for
our existing games and future games we may deploy. As a result, we expect the aggregate amount of sales and marketing expenses to increase for the
foreseeable future as we grow our revenues and business and deploy new games. As deployed games mature, we generally expect sales and marketing
expenses as a percentage of revenue attributable to such games to decrease.
General and Administrative
General and administrative expenses consist primarily of salaries, benefits, and stock-based compensation for our executives, finance, information
technology, human resources and other administrative employees, and includes administrative parent services (see Note 10). In addition, general and
administrative expenses include outside consulting, legal and accounting services, facilities and other supporting overhead costs not allocated to other
departments. We expect that our aggregate amount of general and administrative expenses will increase for the foreseeable future as we continue to grow
our business.
Research and Development
Research and Development expenses consist primarily of costs associated with game development, such as associated salaries, benefits, and other
supporting overhead costs associated with game development. Continued investment in enhancing existing games and developing new games is important
to attaining our strategic objectives. As a result, we expect the aggregate amount of R&D expenses to increase for the foreseeable future as we grow our
business, focus on retention of our development team and grow our facilities.
Restructuring and Other
Our restructuring and other expenses include charges or expenses attributable to: (a) employee severance; (b) management changes;
(c) restructuring and integration; (d) M&A and other, which includes (i) M&A transaction costs; (ii) purchase accounting adjustments (including contingent
acquisition consideration); (iii) unusual items (including legal settlements related to major litigation); and (iv) other non-cash items; and (e) cost-savings
initiatives. Restructuring and other expenses will increase or decrease based on management actions and/or occurrence of charges described herein.
47

RESULTS OF OPERATIONS
Summary of Results of Operations
Years ended December 31,
Variance
($ in millions, except percentages)
2022
2021
2022 vs. 2021
Revenue
$
671.0 
$
606.1 
$
64.9 
11 %
Operating expenses
522.5 
474.4 
48.1 
10 %
Operating income
148.5 
131.7 
16.8 
13 %
Net income
150.8 
125.0 
25.8 
21 %
Net income attributable to SciPlay
22.4 
19.3 
3.1 
16 %
AEBITDA
$
186.8 
$
185.9 
$
0.9 
— %
Net income margin
22.5 %
20.6 %
1.9 pp
nm
AEBITDA margin
27.8 %
30.7 %
(2.9)pp
nm
pp = percentage points.
nm = not meaningful.
The following table reconciles Net income attributable to SciPlay to AEBITDA and AEBITDA margin:
Years ended December 31,
($ in millions, except percentages)
2022
2021
Net income attributable to SciPlay
$
22.4 
$
19.3 
Net income attributable to noncontrolling interest
128.4 
105.7 
Net income
150.8 
125.0 
Restructuring and other
5.1 
31.5 
Depreciation and amortization
21.4 
15.5 
Income tax expense
0.7 
5.7 
Stock-based compensation
11.8 
7.2 
Other (income) expense, net
(3.0)
1.0 
AEBITDA
$
186.8 
$
185.9 
Revenue
$
671.0 
$
606.1 
Net income margin (Net income/Revenue)
22.5 %
20.6 %
AEBITDA margin (AEBITDA/Revenue)
27.8 %
30.7 %
 Includes $24.5 million legal settlement charge for the year ended December 31, 2021 (see Note 11).
 Refer to “Key Performance Indicators and Non-GAAP Measures” section above for the definitions of AEBITDA and AEBITDA margin presented in this table.
Revenue, Key Performance Indicators and Other Metrics
Years ended December 31,
Variance
($ in millions)
2022
2021
2022 vs. 2021
Mobile in-app purchases
$
584.1 
$
537.3 
$
46.8 
9 %
Web in-app purchases and other
86.9 
68.8 
18.1 
26 %
Total revenue
$
671.0 
$
606.1 
$
64.9 
11 %
 Other primarily represents advertising revenue, which was $21.7 million for the year ended December 31, 2022.
(1)
(2)
(2)
(1)
(2)
(1)
(1)
48

Revenue information by geography is summarized as follows:
Years ended December 31,
Variance
($ in millions)
2022
2021
2022 vs. 2021
North America
$
615.5 
$
555.5 
$
60.0 
11 %
International
55.5 
50.6 
4.9 
10 %
Total revenue
$
671.0 
$
606.1 
$
64.9 
11 %
 North America revenue includes revenue derived from the U.S., Canada and Mexico.
    
The following reflects our Key Performance Indicators and Other Metrics:
(in millions, except ARPDAU, AMRPPU, and percentages)
Years ended December 31,
Variance
2022
2021
2022 vs. 2021
In-App Purchases :
Mobile Penetration
90 %
89 %
1.0  pp
nm
Average MAU
6.0 
6.2 
(0.2)
(3.2)%
Average DAU
2.3 
2.3 
— 
— %
ARPDAU
$
0.78 
$
0.71 
$
0.07 
9.9 %
Average MPUs
0.6 
0.5 
0.1 
7.9 %
AMRPPU
$
94.58 
$
95.26 
$
(0.68)
(0.7)%
Payer Conversion Rate
9.6 %
8.5 %
1.1  pp
nm
 The above KPIs include only in-app purchases, as advertising revenue is not material for the periods presented.
pp = percentage points.
nm = not meaningful.
The increase in mobile penetration percentage primarily reflects a continued trend of players migrating from web to mobile platforms to play our
games.
Average MAU decreased due to the turnover in users, and average DAU remained relatively flat due to higher player engagement.
ARPDAU increased, while average DAU remained flat. AMRPPU decreased while average MPU increased due to introduction of new content
and features resulting in increased paying player interaction.
All-time high payer conversion rate was due to the growing popularity of our games as we focused on live operations to enhance game play and
engagement.
(1)
(1)
(1)
(1)
49

Operating Expenses
Years ended December 31,
Variance
Percentage of Revenue
($ in millions)
2022
2021
2022 vs. 2021
2022
2021
2022 vs. 2021
Change
Operating expenses:
Cost of revenue
$
204.0 
$
190.0 
$
14.0 
7.4 %
30.4 %
31.3 %
(0.9)pp
Sales and marketing
177.6 
135.3 
42.3 
31.3 %
26.5 %
22.3 %
4.2 pp
General and administrative
67.6 
62.4 
5.2 
8.3 %
10.1 %
10.3 %
(0.2)pp
Research and development
46.8 
39.7 
7.1 
17.9 %
7.0 %
6.6 %
0.4 pp
Depreciation and amortization
21.4 
15.5 
5.9 
38.1 %
3.2 %
2.6 %
0.6 pp
Restructuring and other
5.1 
31.5 
(26.4)
nm
nm
nm
Total operating expenses
$
522.5 
$
474.4 
$
48.1 
10.1 %
(1) Excludes depreciation and amortization.

nm = not meaningful.

pp = percentage points.
Cost of Revenue
Cost of revenue increased due to higher platform fees in line with revenue growth and a $2.3 million increase in hosting fees, which was partially
offset by a $0.9 million decrease in royalties for third-party IP.
Sales and Marketing
Sales and marketing expenses increased primarily due to higher marketing spend of $37.1 million coupled with higher salaries and benefits of $3.6
million primarily related to an average increased headcount of 44%. Sales and marketing expense as a percentage of revenue increased primarily due to
higher marketing spend.
General and Administrative
General and administrative expenses increased primarily due to a $6.8 million increase in salaries and benefits related to an average increase in
headcount of 35%, coupled with a $4.6 million increase in stock-based compensation, which was partially offset by a $5.4 million decrease in legal
expenses.
Research and Development
Research and development expenses increased primarily as a result of $4.7 million in higher salary and benefits costs primarily due to an average
increase in headcount of 14%, coupled with higher software costs and professional service fees.
Depreciation and Amortization
Depreciation and amortization expenses increased primarily due to additional amortization associated with intangible assets acquired in
conjunction with the Alictus and Koukoi acquisitions.
Restructuring and Other
Restructuring and other expense decreased primarily as a result of the prior year’s $24.5 million charge related to our settlement of the Washington
State Matter (see our 2021 Annual Report on Form 10-K).
Net Income
Net income primarily increased as a result of the prior year’s Washington State settlement charge of $24.5 million, coupled with continued growth
in revenue as average monthly paying users and payer conversion rates continued to increase
(1)
(1)
(1)
(1)
50

throughout 2022 (as described above). Net income in 2022 also benefited by $7.0 million related to a change in the forecasted tax rate applicable to certain
foreign deferred tax items.
Net income margin increased by 1.9 percentage points as a result of the above stated drivers.
Noncontrolling Interest
Net income attributable to noncontrolling interest increased due to the increase in Net income as described above.
AEBITDA
AEBITDA increased primarily due to the increase in revenue, largely offset by the increase in operating costs resulting from higher marketing
spend and salaries and benefits costs (as described above). Higher operating costs impacted AEBITDA margin, which decreased by 2.9 percentage points
given the increase in revenue of 10.7% and the increase in AEBITDA of 0.5%.
For 2021 and 2020 consolidated results comparison, see Part II, Item 7 of our 2021 Annual Report on Form 10-K.
RECENTLY ISSUED ACCOUNTING GUIDANCE
For a description of recently issued accounting pronouncements, see Note 1.
CRITICAL ACCOUNTING ESTIMATES
Information regarding significant accounting policies is included in the Notes to the audited consolidated financial statements. As stated in Note 1,
the preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. Management bases its estimates on historical
experience and on various assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
We believe that the estimates, assumptions, and judgments involved in the following accounting policies have the greatest potential impact on our
consolidated financial statements:
•
Revenue recognition;
•
Business acquisitions;
•
Income taxes;
•
Variable interest entities (VIE); and
•
Legal contingencies.
Revenue Recognition
Our revenue recognition policy described fully in Note 1 requires us to make significant judgments and estimates. The guidance in ASC 606
requires that we apply judgments or estimates to determine the performance obligations, the standalone selling prices of our performance obligations to
customers and the timing of transfer of control of the respective performance obligations. The evaluation of each of these criteria in light of contract
specific facts and circumstances is inherently judgmental, but certain judgments could significantly affect the timing or amount of revenue recognized if we
were to reach a different conclusion than we have. The critical judgments we are required to make in our assessment of contracts with customers that could
significantly affect the timing or amount of revenue recognized are:
•
Satisfaction of our performance obligation for in-app purchase revenue — We estimate the amount of outstanding purchased coins, chips or cards
at period end based on customer behavior, because we are unable to distinguish between the consumption of purchased or free coins, chips or
cards. Based on an analysis of the customers' historical play behavior, the timing difference between when virtual currencies are purchased by a
customer and when those
51

virtual currencies are consumed in game play is relatively short. Future usage patterns may differ from historical usage patterns, and therefore the
estimated average playing periods may change in the future, and such changes could be material.
•
Principal-agent considerations for in-app purchase revenue — We recognize in-app purchase revenues on a gross basis because we have control
over the content and functionality of games before players access our games on our platform providers platforms. We evaluated our current
agreements with our platform providers and end-user agreements and based on the preceding, we determined that we are the principal in such
arrangements. Any future changes in these arrangements or to our games and related method of distribution may result in a different conclusion,
and such change would have a material impact on our gross revenues.
Business Acquisitions
We account for business acquisitions in accordance with ASC 805.
In business combinations, the acquiring entity is required to recognize all (and only) acquired assets and liabilities assumed in the transaction and
establish the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed, with certain exceptions for contract
assets and contract liabilities in accordance with ASC 606.
If the Company determines the assets acquired do not meet the definition of a business under the acquisition method of accounting, the transaction
is accounted for as an acquisition of assets rather than a business combination. In an asset acquisition, the acquiring entity is required to allocate the cost of
the group of assets acquired to the individual assets acquired or liabilities assumed based on the relative fair values of net identifiable assets acquired other
than non-qualifying assets (for example cash) and does not give rise to goodwill.
Determining the fair value of assets acquired and liabilities assumed requires management judgment and often involves the use of significant
estimates and assumptions with respect to the timing and amounts of future cash inflows and outflows, discount rates, market prices and asset lives, among
other items. Any changes in the underlying assumptions can impact the estimates of fair value by material amounts, which can in turn materially impact our
results of operations. If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions
and projections used to develop these fair values, we could record impairment charges. In addition, we have estimated the useful lives of certain acquired
assets, and these lives are used to calculate Depreciation and amortization expense. If our estimates of the useful lives change, Depreciation & amortization
expense could be accelerated or slowed. For example, for the acquisition completed during 2022, if the intangible assets useful lives were extended by two
years, the total annual depreciation and amortization would decrease by approximately $1.5 million, and if the useful lives were shortened by two years, the
total annual depreciation and amortization would increase by approximately $3.1 million. The carrying amount of intangible assets, net associated with the
acquisitions completed during 2022 was $29.4 million as of December 31, 2022.
Income Taxes
We are subject to the income tax laws of the U.S. federal, state and foreign jurisdictions in which we operate. These tax laws are complex, and the
manner in which they apply to our facts is sometimes open to interpretation. In establishing the provision for income taxes, we must make judgments about
the application of these inherently complex tax laws.
Our income tax positions and analysis are based on currently enacted tax law. Future changes in tax law could significantly impact the provision
for income taxes, the amount of taxes payable and the deferred tax asset and liability balances in future periods. Deferred tax assets generally represent the
excess of tax basis in our investment and tax benefits for tax deductions available in future tax returns. Certain estimates and assumptions are required to
determine whether it is more likely than not that all or some portion of the benefit of a deferred tax asset will not be realized. In making this assessment,
management analyzes and estimates the impact of future taxable income, available carry-backs and carry-forwards, reversing temporary differences and
available prudent and feasible tax planning strategies. Should a change in facts or circumstances lead to a change in judgment about the ultimate
realizability of a deferred tax asset, we record or adjust the related valuation allowance in the annual period that the change in facts and circumstances
occurs, along with a corresponding increase or decrease in the provision for income taxes. For discussion of our income taxes, see Note 9.
Variable Interest Entities (VIE)
52

As described in Note 1, SciPlay's sole material asset is its member's interest in SciPlay Parent LLC. Due to SciPlay's power to control combined
with its significant economic interest in SciPlay Parent LLC, we concluded that SciPlay is the primary beneficiary of the VIE, and therefore it will
consolidate the financial results of SciPlay Parent LLC and its subsidiaries. Any future changes to the economic interest and/or the SciPlay Parent LLC
Agreement, among other factors, may result in a different conclusion, and such change would have a material impact on SciPlay financial statements, as
SciPlay Parent LLC and its subsidiaries would not be consolidated but rather accounted for under the equity method of accounting.
Legal Contingencies
We are subject to certain legal proceedings, demands, claims and threatened litigation that arise in the normal course of our business. We review
the status of each significant matter quarterly and assess our potential financial exposure. If the potential loss from any claim or legal proceeding is
considered probable and the amount can be reasonably estimated, we record a liability and an expense for the estimated loss. If we determine that a loss is
reasonably possible and the range of the loss can be reasonably estimated, then we disclose the range of the possible loss. Significant judgment is required
in the determination of whether a potential loss is probable, reasonably possible, or remote and in the determination of whether a potential exposure is
reasonably estimable. Our accruals are based on the best information available at the time. As additional information becomes available, we reassess the
liabilities and disclosures related to our pending claims and litigation and may revise our estimates. Potential legal liabilities and the revision of estimates
of legal liabilities could have a material impact on our results of operations, cash flows, and financial position. For discussion of our legal proceedings, see
Note 11, which is incorporated by reference into Item 3 of this Annual Report on Form 10-K.
LIQUIDITY, CAPITAL RESOURCES AND WORKING CAPITAL
SciPlay is a holding company, with no material assets other than its ownership of SciPlay Parent LLC interests, no operating activities on its own
and no independent means of generating revenue or cash flow. Operations are carried out by SciPlay Parent LLC and its subsidiaries, and we depend on
distributions from SciPlay Parent LLC to pay our taxes and expenses. SciPlay Parent LLC’s ability to make distributions to us is restricted by the terms of
the Revolver, and may be restricted by any future credit agreement we or our subsidiaries enter into, any future debt or preferred equity securities we or our
subsidiaries issue, other contractual restrictions or applicable Nevada law.
We have funded our operations primarily through cash flows from operating activities. Based on our current plans and market conditions, we
believe that cash flows generated from our operations and borrowing capacity under the Revolver will be sufficient to satisfy our anticipated cash
requirements for the foreseeable future. However, we intend to continue to make significant investments to support our business growth and may require
additional funds to respond to business challenges, including the need to develop new games and features or enhance our existing games, improve our
operating infrastructure or acquire complementary businesses, personnel and technologies. Accordingly, we may need to engage in equity or debt
financings to secure additional funds. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain
adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to
business challenges could be significantly impaired, and our business may be harmed.
Our total cash on hand was $330.1 million and $364.4 million at years ended December 31, 2022 and 2021, respectively.
Our capital requirements as of December 31, 2022 principally include obligations associated with our future minimum operating lease obligations,
license minimum guarantees, obligations under the TRA and obligations related to contingent acquisition consideration and redeemable noncontrolling
interest for Alictus. These commitment amounts are associated with contracts that are enforceable and legally binding and that specify all significant terms,
including fixed or minimum services to be used, fixed, minimum or variable price provisions and the approximate timing of the actions under the contracts.
We also have certain agreements in place whereby we are obligated to pay royalties based on future events that are uncertain.
The TRA we entered into with the L&W Member in connection with the IPO provides for the payment by us to the L&W Member 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
53

distributions (or deemed distributions) by SciPlay Parent LLC and (ii) certain other tax benefits related to our making of payments under the TRA. The
annual tax benefits are computed by comparing the income taxes due including such tax benefits and the income taxes due without such benefits.
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.
Revolving Credit Facility
We have a $150.0 million Revolver by and among SciPlay Games, LLC (formerly known as SciPlay Holding Company, LLC) (“SciPlay Games”),
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. 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 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 up to 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. The commitment fee varies based on the total net leverage ratio and is subject to a floor of 0.375%.As of December 31, 2022, 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%.
On February 28, 2022, we entered into Amendment No. 2 to the Revolver, by and among SciPlay Games, SciPlay Parent LLC, the several banks
and other financial institutions or entities from time to time party thereto and Bank of America, N.A., as administrative agent, collateral agent and issuing
lender (such amendment, “Amendment No. 2”). Amendment No. 2, among other things, (i) amended certain interest rate provisions related to Sterling-
denominated revolving loans, (ii) increased SciPlay Games’ and its subsidiaries’ capacity to acquire non-loan parties and (iii) allowed for the acquisition of
Alictus.
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, 2022, 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 Games, 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 Games and each subsidiary guarantor party thereto, in each case, subject to
customary exceptions.
54

Changes in Cash Flows
The following table presents a summary of our cash flows for the periods indicated:
Years Ended December 31,
($ in millions)
2022
2021
Net cash provided by operating activities
$
150.4 
$
163.8 
Net cash used in investing activities
(113.7)
(14.8)
Net cash used in financing activities
(70.3)
(53.6)
Effect of exchange rate changes on cash and cash equivalents and restricted cash
(0.7)
0.1 
(Decrease) increase in cash and cash equivalents and restricted cash
$
(34.3)
$
95.5 
Net cash provided by operating activities decreased primarily due to the payment of the $24.5 million Washington State matter previously accrued,
which was partially offset by higher earnings.
Net cash used in investing activities increased primarily due to a $102.2 million increase in cash paid for business acquisition as a result of the
Alictus acquisiton, coupled with a $2.5 million increase in capital expenditures primarily related to increased internal development costs, partially offset by
$6.0 million in proceeds from maturities of time deposits.
Net cash used in financing activities increased primarily due to a $37.1 million increase in the repurchase of Class A common stock shares,
partially offset by a $12.7 million net decrease in taxes paid related to net share settlement of equity awards and employee stock purchase plan settlements,
coupled with a $6.9 million decrease in distributions to Light & Wonder driven by lower SciPlay Corporation tax payments.
Credit Agreement and Other Debt
For additional information regarding our credit agreement and other debt and interest rate risk, see the “Revolving Credit Facility” section in this
Item 7 above and Note 1.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As of December 31, 2022, we had no material exposure to market risks.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and other information required by this item are included in Part IV, Item 15 of this Annual Report on Form 10-K and are
presented beginning on page 58.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
An evaluation was performed under the supervision and with the participation of management, including the Chief Executive Officer (“CEO”) and
Interim Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as that term is defined in Rule
13a-15(e) under the Exchange Act, as of the end of the period covered by this annual report. Based on that evaluation, the CEO and Interim Chief Financial
Officer concluded that our disclosure controls and procedures are effective as of the end of the period covered by this annual report.
Management’s Report on Internal Control Over Financial Reporting
55

The management of SciPlay is responsible for establishing and maintaining adequate internal control over financial reporting as such term is
defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of SciPlay; (ii) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures are being made only in accordance with authorizations of management and directors; and (iii) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of our internal control over financial reporting as of
December 31, 2022. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO) in Internal Control-Integrated Framework (2013). Based on our assessment we concluded that, as of December 31, 2022, our internal control over
financial reporting was effective based on those criteria.
An attestation of the Company’s internal control over financial reporting by our independent registered public accounting firm is not included as
we are an Emerging Growth Company and are exempt from the auditor attestation requirement of Section 404(b) of the Sarbanes-Oxley Act of 2002.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2022 that have materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
We have adopted a Code of Business Conduct that applies to all of our officers, directors and employees (including our CEO and Interim Chief
Financial Officer) and have posted the Code of Business Conduct on our website at https://investors.sciplay.com/static-files/0926b359-398b-447c-b58f-
070446de7973. In the event that we have any amendments to or waivers from any provision of the Code of Business Conduct applicable to our CEO or
Interim Chief Financial Officer, we intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K by posting such information on our website
at https://investors.sciplay.com/financials-and-filings/sec-filings.
Information relating to our executive officers is included in Part I, Item 1 of this Annual Report on Form 10-K. The other information called for by
this item is incorporated by reference to our definitive proxy statement relating to our 2023 annual meeting of stockholders, which will be filed with the
SEC. If such proxy statement is not filed on or before April 30, 2023, the information called for by this item will be filed as part of an amendment to this
Annual Report on Form 10-K on or before such date.
ITEM 11. EXECUTIVE COMPENSATION
The information called for by this item is incorporated herein by reference to our definitive proxy statement relating to our 2023 annual meeting of
stockholders, which will be filed with the SEC. If such proxy statement is not filed on or
56

before April 30, 2023, the information called for by this item will be filed as part of an amendment to this Annual Report on Form 10-K on or before such
date.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
The information called for by this item is incorporated herein by reference to our definitive proxy statement relating to our 2023 annual meeting of
stockholders, which will be filed with the SEC. If such proxy statement is not filed on or before April 30, 2023, the information called for by this item will
be filed as part of an amendment to this Annual Report on Form 10-K on or before such date.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information called for by this item is incorporated herein by reference to our definitive proxy statement relating to our 2023 annual meeting of
stockholders, which will be filed with the SEC. If such proxy statement is not filed on or before April 30, 2023, the information called for by this item will
be filed as part of an amendment to this Annual Report on Form 10-K on or before such date.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information called for by this item is incorporated herein by reference to our definitive proxy statement relating to our 2023 annual meeting of
stockholders, which will be filed with the SEC. If such proxy statement is not filed on or before April 30, 2023, the information called for by this item will
be filed as part of an amendment to this Annual Report on Form 10-K on or before such date.
57

PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Form 10-K Page
1. Financial Statements:
Report of Independent Registered Public Accounting Firm (PCAOB ID: 34)
59
Consolidated Statements of Income for the years ended December 31, 2022, 2021, and 2020
60
Consolidated Statements of Comprehensive Income for the years ended December 31, 2022, 2021, and 2020
61
Consolidated Balance Sheets as of December 31, 2022 and 2021
62
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2022, 2021, and 2020
63
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021 and 2020
64
Notes to Consolidated Financial Statements
65
2. Financial Statement Schedule:
Schedule II - Valuation and Qualifying Accounts
86
3. Exhibits
87
58

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of SciPlay Corporation:
Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of SciPlay Corporation and subsidiaries (the "Company") as of December 31, 2022 and
2021, the related consolidated statements of income, comprehensive income, changes in stockholders' equity, and cash flows, for each of the three years in
the period ended December  31, 2022, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022
and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with
accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of
internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over
financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
Las Vegas, Nevada
March 1, 2023
We have served as the Company's auditor since 2016.
59

SCIPLAY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)
Years Ended December 31,
2022
2021
2020
Revenue
$
671.0 
$
606.1 
$
582.2 
Operating expenses:
  Cost of revenue
204.0 
190.0 
185.3 
  Sales and marketing
177.6 
135.3 
130.7 
  General and administrative
67.6 
62.4 
66.2 
  Research and development
46.8 
39.7 
33.3 
  Depreciation and amortization
21.4 
15.5 
9.7 
  Restructuring and other
5.1 
31.5 
2.0 
       Operating income
148.5 
131.7 
155.0 
Other income (expense):
  Other income (expense), net
3.0 
(1.0)
(0.6)
     Total other income (expense), net
3.0 
(1.0)
(0.6)
     Net income before income taxes
151.5 
130.7 
154.4 
Income tax expense
(0.7)
(5.7)
(8.4)
       Net income
150.8 
125.0 
146.0 
Less: Net income attributable to the noncontrolling interest
128.4 
105.7 
125.1 
       Net income attributable to SciPlay
$
22.4 
$
19.3 
$
20.9 
Basic and diluted net income attributable to SciPlay per share:
  Basic
$
0.94 
$
0.80 
$
0.92 
  Diluted
$
0.91 
$
0.77 
$
0.86 
Weighted average number of shares of Class A common stock used in per share calculation:
  Basic shares
23.9 
24.2 
22.8 
  Diluted shares
24.5 
25.0 
24.4 
 Excludes depreciation and amortization.
See accompanying notes to consolidated financial statements.
(1)
(1)
(1)
(1)
(1)
60

SCIPLAY CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in millions)
Years Ended December 31,
2022
2021
2020
Net income
$
150.8 
$
125.0 
$
146.0 
Other comprehensive (loss) income:
Foreign currency translation (loss) gain, net of tax
(7.7)
1.2 
3.1 
Total comprehensive income
143.1 
126.2 
149.1 
Less: Comprehensive income attributable to the noncontrolling interest
122.2 
106.7 
127.6 
Comprehensive income attributable to SciPlay
$
20.9 
$
19.5 
$
21.5 
See accompanying notes to consolidated financial statements.
61

SCIPLAY CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except par value)
As of December 31,
2022
2021
ASSETS
Current assets:
Cash and cash equivalents
$
330.1 
$
364.4 
Accounts receivable, net (allowance for doubtful accounts of $—)
51.0 
39.6 
Prepaid expenses and other current assets
8.0 
6.4 
Total current assets
389.1 
410.4 
Property and equipment, net
3.0 
3.5 
Operating lease right-of-use assets
4.8 
6.8 
Goodwill
217.6 
131.1 
Intangible assets and software, net
74.8 
49.6 
Deferred income taxes
74.5 
78.5 
Other assets
1.9 
1.7 
Total assets
$
765.7 
$
681.6 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
18.4 
$
20.0 
Accrued liabilities
35.2 
50.2 
Due to affiliate
3.8 
1.6 
Total current liabilities
57.4 
71.8 
Operating lease liabilities
3.1 
5.4 
Liabilities under the TRA
60.2 
64.7 
Other long‑term liabilities
29.4 
14.7 
Total liabilities
150.1 
156.6 
Commitments and contingencies (see Note 11)
Stockholders’ equity:
Class A common stock, par value $0.001 per share, 625.0 shares authorized, 24.9 and 24.5 shares
issued, 22.1 and 24.5 shares outstanding as of December 31, 2022 and 2021, respectively
— 
— 
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, 2022 and 2021, respectively
0.1 
0.1 
Additional paid-in capital
72.0 
45.2 
Retained earnings
74.6 
52.2 
Treasury stock, at cost, 2.7 shares and — shares, respectively
(37.1)
— 
Accumulated other comprehensive (loss) income
(0.4)
1.1 
Total SciPlay stockholders’ equity
109.2 
98.6 
Noncontrolling interest
506.4 
426.4 
Total stockholders’ equity
615.6 
525.0 
Total liabilities and stockholders’ equity
$
765.7 
$
681.6 
See accompanying notes to consolidated financial statements.
62

SCIPLAY CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(in millions)
Class A common stock
Class B common stock
Additional
paid-in
capital
Retained
earnings
Treasury
stock
Accumulated
other
comprehensive
income (loss)
Noncontrolling
interest
Total
Shares
Amount
Shares
Amount
December 31, 2019
22.7 
$
— 
103.5 
$
0.1 
$
41.7 
$
12.0 
$
— 
$
0.3 
$
223.4 
$ 277.5 
Net income
— 
— 
— 
— 
— 
20.9 
— 
— 
125.1 
146.0 
Stock-based compensation
— 
— 
— 
— 
4.5 
— 
— 
— 
17.5 
22.0 
Net issuance (redemption) of
common stock in connection
with RSUs
0.1 
— 
— 
— 
(0.1)
— 
— 
— 
(0.2)
(0.3)
Distributions to Parent and
affiliates, net
— 
— 
— 
— 
— 
— 
— 
— 
(12.8)
(12.8)
Currency translation
— 
— 
— 
— 
— 
— 
— 
0.6 
2.5 
3.1 
December 31, 2020
22.8 
$
— 
103.5 
$
0.1 
$
46.1 
$
32.9 
$
— 
$
0.9 
$
355.5 
$ 435.5 
Net income
— 
— 
— 
— 
— 
19.3 
— 
— 
105.7 
125.0 
Stock-based compensation
— 
— 
— 
— 
1.5 
— 
— 
— 
4.8 
6.3 
Net issuance (redemption) of
common stock in connection
with RSUs and other
1.7 
— 
— 
— 
(2.4)
— 
— 
— 
(10.6)
(13.0)
Distributions to Parent and
affiliates, net
— 
— 
— 
— 
— 
— 
— 
— 
(30.0)
(30.0)
Currency translation
— 
— 
— 
— 
— 
— 
— 
0.2 
1.0 
1.2 
December 31, 2021
24.5 
$
— 
103.5 
$
0.1 
$
45.2 
$
52.2 
$
— 
$
1.1 
$
426.4 
$ 525.0 
Net income
— 
— 
— 
— 
— 
22.4 
— 
— 
128.4 
150.8 
Stock-based compensation
— 
— 
— 
— 
1.7 
— 
— 
— 
6.5 
8.2 
Vesting of RSUs, net of tax
withholdings and other
0.3 
— 
— 
— 
(0.1)
— 
— 
— 
(0.4)
(0.5)
Distributions to Parent and
affiliates, net
— 
— 
— 
— 
— 
— 
— 
— 
(23.1)
(23.1)
Repurchases of stock
(2.7)
— 
— 
— 
30.3 
— 
(37.1)
— 
(30.3)
(37.1)
Economic rebalancing
— 
— 
— 
— 
(5.1)
— 
— 
— 
5.1 
— 
Currency translation
— 
— 
— 
— 
— 
— 
— 
(1.5)
(6.2)
(7.7)
December 31, 2022
22.1 
$
— 
103.5 
$
0.1 
$
72.0 
$
74.6 
$
(37.1)
$
(0.4)
$
506.4 
$ 615.6 
SciPlay Parent LLC equity attributable to SciPlay Corporation and the noncontrolling interest holders is rebalanced, as needed, to reflect changes in LLC Unit ownership.
See accompanying notes to consolidated financial statements.
(1)
(1) 
63

SCIPLAY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Years Ended December 31,
2022
2021
2020
Cash flow from operating activities:
Net income
$
150.8 
$
125.0 
$
146.0 
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization
21.4 
15.5 
9.7 
Contingent acquisition consideration fair value adjustment
— 
(1.5)
— 
Legal reserve (see Note 11)
(24.5)
24.5 
— 
Deferred income taxes
(6.1)
3.6 
4.3 
Stock-based compensation
11.8 
7.2 
22.0 
Payments of contingent acquisition consideration
— 
— 
(4.0)
Changes in assets and liabilities, net of effects of acquisitions:
Accounts receivable
(6.4)
(2.9)
(3.9)
Prepaid expenses, other current assets and other assets
2.8 
— 
(0.8)
Accrued liabilities, accounts payable and other liabilities
(1.3)
(4.7)
17.2 
Due to affiliate and other, net
1.9 
(2.9)
2.9 
Net cash provided by operating activities
150.4 
163.8 
193.4 
Cash flows from investing activities:
Capital expenditures
(11.5)
(9.1)
(7.1)
Business acquisitions, net of cash acquired
(107.9)
(5.7)
(12.6)
Proceeds from maturities of time deposits and other, net
5.7 
— 
— 
Net cash used in investing activities
(113.7)
(14.8)
(19.7)
Cash flows from financing activities:
Distributions to Light & Wonder and affiliates, net
(23.1)
(30.0)
(12.4)
Payments of contingent acquisition consideration
(1.0)
(1.0)
(0.5)
Payments under tax receivable agreement
(3.8)
(3.8)
(2.5)
Payments on license obligations
(4.5)
(5.5)
(0.3)
Taxes paid related to net share settlement of equity awards and other
(0.8)
(13.3)
(0.3)
Purchases of treasury stock
(37.1)
— 
— 
Net cash used in financing activities
(70.3)
(53.6)
(16.0)
Effect of exchange rate changes on cash, cash equivalents and restricted cash
(0.7)
0.1 
0.6 
(Decrease) increase in cash, cash equivalents and restricted cash
(34.3)
95.5 
158.3 
Cash, cash equivalents and restricted cash, beginning of period
364.4 
268.9 
110.6 
Cash, cash equivalents and restricted cash, end of period
$
330.1 
$
364.4 
$
268.9 
Supplemental cash flow information:
Cash paid for income taxes
$
4.6 
$
4.8 
$
2.0 
Non-cash investing and financing transactions:
Non-cash additions to intangible assets related to license agreements
$
1.0 
$
14.1 
$
1.8 
See accompanying notes to consolidated financial statements.
64

SCIPLAY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(amounts in USD, table amounts in millions, except per share amounts)
(1) 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, now Light &
Wonder, Inc. (“Light & Wonder”, “L&W” or “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 Company, LLC (“SciPlay Parent LLC”) and its subsidiaries (collectively referred to
as “SciPlay”, the “Company”, “we”, “us”, or “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 completed our initial public offering of Class A common stock in May 2019. In connection with the IPO, we also issued shares of Class B
common stock to the L&W Member and SG Social Holding Company, LLC on a one-to-one basis with the number of LLC Interests owned by the then
L&W members following the IPO. We are a holding company, and our sole material assets are LLC Interests that we purchased from SciPlay Parent LLC
and LNW Social Holding Company I, LLC (“LNW Holding I”) representing an aggregate 17.6% economic interest in SciPlay Parent LLC. The remaining
82.4% economic interest in SciPlay Parent LLC is owned indirectly by Light & Wonder, through the ownership of LLC Interests by the indirect wholly
owned subsidiary of Light & Wonder, the L&W Member. Our corporate structure is commonly referred to as an “Up-C” structure, which allows the L&W
Member to continue to realize certain tax benefits associated with owning interests in an entity that is treated as a partnership, or “passthrough” entity, for
U.S. income tax purposes.
We develop, market and operate a portfolio of 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, 88 Fortunes® Slots, Solitaire Pets™ Adventure, and Backgammon
Live as well as other games in the hyper-casual space through our acquisition of Alictus Yazilim Anonim Şirketi (“Alictus”), such as Candy Challenge
3D™, Boss Life™, and Deep Clean Inc.™. Our games are available in various formats. We have one operating segment with one business activity,
developing and monetizing games.
Variable Interest Entities (“VIE”) and Consolidation
Our sole material asset is our member’s interest in SciPlay Parent LLC. In accordance with the Operating Agreement of SciPlay Parent LLC (the
“Operating Agreement”), 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 does not hold majority voting rights but holds 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, 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”). 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
65

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 $25.9 million and $7.3 million held by our foreign subsidiaries as of December 31, 2022 and 2021,
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, 2022 and 2021 and had no significant write-offs or recoveries during the last three
years.
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).
Any 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 we offer are internally branded
franchises, original content and/or third-party branded games. With the acquisition of Alictus, we also generate revenue from providing advertising
platforms with access to our game software platform, which facilitates the placement of advertising inventory.
Disaggregation of Revenue
We believe disaggregation of our revenue on the basis of platform type and the geographical locations of our players is appropriate because the
nature of revenue 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 platform type:
Years Ended December 31,
2022
2021
2020
Mobile in-app purchases
$
584.1 
$
537.3 
$
505.9 
Web in-app purchases and other
86.9 
68.8 
76.3 
Total revenue
$
671.0 
$
606.1 
$
582.2 
 Other primarily represents advertising revenue, which was $21.7 million for the year ended December 31, 2022.
The following table presents our revenue disaggregated based on the geographical location of our players:
(1)
(1)
66

Years Ended December 31,
2022
2021
2020
North America 
$
615.5 
$
555.5 
$
533.3 
International
55.5 
50.6 
48.9 
Total revenue
$
671.0 
$
606.1 
$
582.2 
 North America revenue includes revenue derived from the U.S., Canada, and Mexico. For the years ended December 31, 2022, 2021, and 2020, U.S. revenue was $578.4 million, $515.8
million, and $496.0 million, respectively.
In-App Purchase Revenue (Mobile and Web)
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.
We continuously gather and analyze detailed customer play behavior and assess this data in relation to our judgments used for revenue
recognition.
Our games with in-app purchases 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.
Advertising Revenue
We have contractual relationships with various advertising service providers for advertisements within certain games. Advertisements can be in
the form of impressions, click-throughs or banner ads. Revenue from advertisements is recognized at a point in time when the advertisements are displayed.
The price can be determined by the applicable evidence of the arrangement, which may include a master contract or a third-party statement of activity, and
the transaction price is generally based on the revenue share percentages stated in the contract. The number of advertising units delivered is determined at
the end of each month. Advertising revenue was less than 4% of total revenue for the period ended December 31, 2022, and below 1% for the periods
ended December 31, 2021 and 2020.
(1)
(1)
67

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
Contract
Liabilities
Balance as of January 1, 2022
$
39.6 
$
0.2 
$
0.5 
Balance as of December 31, 2022
51.0 
0.1 
3.0 
 Contract assets are included within Prepaid expenses and other current assets in our consolidated balance sheets.
 Contract liabilities are included within Accrued liabilities in our consolidated balance sheets.
During the years ended December 31, 2022 and 2021, we recognized $0.4 million and $0.6 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.
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,
2022
2021
2020
2022
2021
Apple
47.5 %
47.1 %
46.3 %
48.3 %
49.8 %
Google
34.1 %
36.7 %
37.1 %
30.5 %
33.9 %
Facebook
12.0 %
12.4 %
13.1 %
10.7 %
12.1 %
Cost of Revenue
Amounts recorded as cost of revenue relate to direct expenses incurred in order to generate in-app purchase 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 $161.0 million, $123.1 million and $123.0 million for the years ended December 31,
2022, 2021 and 2020, 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.
(1)
(2)
(1)
(2)
68

Restructuring and Other
Restructuring and other includes charges or expenses attributable to: (a) employee severance; (b) management changes; (c) restructuring and
integration; (d) M&A and other, which includes (i) M&A transaction costs; (ii) purchase accounting adjustments (including contingent acquisition
consideration); (iii) unusual items (including legal settlements related to major litigation); and (iv) other non-cash items; and (e) cost-savings initiatives.
Restructuring and other expense for the years ended December 31, 2022, 2021 and 2020 primarily related to items (a), (b), (c), and (d) set forth
above, which included a $24.5 million legal settlement charge for the year ended December 31, 2021 (see Note 11).
Acquisitions
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, with certain exceptions for contract assets and contract liabilities in
accordance with ASC 606. 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. If the Company determines the assets acquired do not meet the definition of a business
under the acquisition method of accounting, the transaction is accounted for as an acquisition of assets rather than a business combination. In an asset
acquisition, the acquiring entity is required to allocate the cost of the group of assets acquired to the individual assets acquired or liabilities assumed based
on the relative fair values of net identifiable assets acquired other than non-qualifying assets (for example cash) and does not record goodwill.
Alictus Acquisition
In March 2022, we acquired 80% of all issued and outstanding share capital of privately-held Alictus, a Turkey-based hyper-casual gaming studio.
The remaining 20% will be acquired ratably for potential additional consideration payable annually based upon the achievement of specified revenue and
earnings targets by Alictus during each of the calendar years 2022-2026 (the “Remaining Closings”) subject to and on the terms of the purchase agreement
for Alictus, including, in relation to the Remaining Closing, the satisfaction or waiver of customary closing conditions. The equity rights and privileges of
the remaining Alictus shareholders lack the traditional rights and privileges associated with equity ownership and accordingly, we accounted for the
transaction as if we acquired 100% of Alictus on the acquisition date. Any future payments associated with the acquisition of the remaining 20% represent
a redeemable noncontrolling interest, with a payout ranging from a minimum of $— to a maximum payout of $200.0 million. The Alictus acquisition has
enabled our expansion into the casual gaming market, growing our game pipeline and diversifying our revenue streams as we advance our strategy to be a
diversified global game developer.
The total purchase consideration was $133.6 million, which included $97.6 million in cash, $15.0 million of cash that was deposited into an
escrow account, and redeemable noncontrolling interest valued at $21.0 million at the acquisition date. We accounted for this acquisition using the
acquisition method of accounting, whereby the total purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on
respective estimated fair values.
We incurred acquisition-related costs, which were recorded in Restructuring and other, of $1.2 million for the year ended December 31, 2022.
69

The following table summarizes the allocation of the Alictus purchase price:
March 1, 2022
Cash and cash equivalents
$
4.7 
Accounts receivable
5.4 
Prepaid expenses and other current assets
7.1 
Intangible assets:
“Alictus” trade name, useful life of 5 years
4.4 
Intellectual property (game content and related technology), useful life of 6 years
29.8 
Goodwill
92.8 
Total assets
144.2 
Accounts payable and other current liabilities
3.6 
Deferred tax liabilities
7.0 
Total liabilities
10.6 
Total consideration transferred
$
133.6 
 Other current assets included $6.1 million in Turkish lira-denominated time deposits, which matured during the third quarter of 2022. These time deposits were measured at fair value under
ASC 820 as Level 2 investments.
Cash, cash equivalents, accounts receivable and other current assets (other than the time deposits) and most liabilities (other than as primarily
related to deferred income taxes) were valued at the existing carrying values which approximated the estimated fair values. The estimated fair value of
deferred income taxes was determined by applying the applicable enacted statutory tax rate to the temporary differences that arose on the differences
between the financial reporting value and tax basis of the acquired assets and assumed liabilities.
The fair value of intangible assets that have been identified was determined using the relief from royalty method using Level 3 inputs in the
hierarchy as established by ASC 820. The discount rate used in the valuation analysis was 18%, and the royalty rate used was 1% for the valuation of the
“Alictus” trade name and 21% for the valuation of the acquired game content and related technology.
The fair value of the redeemable noncontrolling interest was determined using a Monte Carlo simulation model, based on inputs that are classified
as Level 3 under the ASC 820 fair value hierarchy using a discount rate ranging between 2% and 3%, and is primarily based on reaching certain revenue
and earnings-based metrics, with a maximum payout of up to $200.0 million. We measured the fair value of redeemable noncontrolling interest as of the
acquisition date, and recorded such redeemable noncontrolling interest as a liability on the Company’s consolidated balance sheet on the acquisition date.
The fair value of the liability is remeasured when the contingency is resolved based on actual performance or settlement.
The factors contributing to the recognition of goodwill are based on enhanced financial and operational scale, games diversification, expected
synergies, assembled workforce, and other strategic benefits. None of the resultant goodwill is expected to be deductible for income tax purposes.
Koukoi Acquisition
In July 2021, we acquired privately held Koukoi Games Oy, a Finnish-based developer and operator of casual mobile games, for $5.4 million cash
consideration, net of cash acquired, that allowed us to expand our casual games portfolio. The transaction was accounted for as an asset acquisition, with
substantially all of the cash consideration transferred allocated to intellectual property, which was assigned a 5-year useful life.
Come2Play Acquisition
In June 2020, we completed the acquisition of all of the issued and outstanding capital stock of privately held mobile and social game company
Come2Play, which expanded our existing portfolio of social games. The total purchase consideration was $17.8 million including $3.7 million in
contingent acquisition consideration. Our allocation of the purchase price resulted in $12.7 million allocated to acquired intangible assets, which included
$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,
(1)
(1)
70

respectively, an immaterial amount of net working capital and $6.9 million in excess purchase price allocated to goodwill. 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 the above acquisitions 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.
Contingent Acquisition Consideration and Redeemable Noncontrolling Interest
Our contingent consideration and redeemable noncontrolling interest liabilities are recorded at fair value on the acquisition date as part of the
consideration transferred. Contingent consideration is remeasured each reporting period, and the redeemable noncontrolling interest is measured based on
its redemption value. Any changes in contingent acquisition consideration fair value as a result of remeasurement are included in Restructuring and other
expenses. The inputs used to measure the fair value of the liabilities 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).
The following table summarizes our contingent acquisition consideration and redeemable noncontrolling interest liabilities:
Total
Included in Accrued
Liabilities
Included in Other Long-Term
Liabilities
Balance as of December 31, 2020
$
3.4  $
1.0  $
2.4 
Payments
(0.9)
(0.9)
Fair value adjustments
(1.5)
(1.5)
Balance as of December 31, 2021
$
1.0  $
1.0  $
— 
Additions
21.0 
2.9 
18.1 
Payments
(1.0)
(1.0)
Balance as of December 31, 2022
$
21.0  $
2.9  $
18.1 
 These additions represent redeemable noncontrolling interest generated by the Alictus acquisition.
The maximum remaining payout for contingent acquisition consideration and redeemable noncontrolling interest was $200.0 million, as of
December 31, 2022.
Foreign Currency Translation
We have operations in Israel and Finland 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. Gains or losses resulting from foreign currency transactions are included in Other income (expense), net.
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. Additionally, the
inputs used to measure
(1)
(1)
71

the fair value of contingent consideration liability are categorized as Level 3 in the fair value hierarchy. Refer to Contingent Acquisition Consideration and
Redeemable Noncontrolling Interest section above for additional disclosures.
As of December 31, 2022 and 2021, we did not have other material assets and liabilities recorded at fair value on a recurring or nonrecurring basis
other than those described above.
Minimum Guarantees Under Licensing Agreements
We enter into long-term license agreements with third parties in which we are obligated to pay a minimum guaranteed amount of royalties,
typically periodically over the life of the contract. These license agreements provide us with access to a portfolio of major brands to be used across our
games. We account for the minimum guaranteed obligations within Current liabilities and Other long-term liabilities at the onset of the license arrangement
and record a corresponding licensed asset within Intangible assets and software, net. The licensed intangible assets related to the minimum guaranteed
obligations are amortized over the term of the license agreement with the amortization expense recorded in Depreciation and amortization. The long-term
liability related to the minimum guaranteed obligations is reduced as payments are made as required under the license agreement. We assess the
recoverability of license agreements whenever events arise or circumstances change that indicate the carrying value of the licensed asset may not be
recoverable. Recoverability of the licensed asset and the amount of impairment, if any, are determined using our policy for intangible assets with finite
useful lives.
The following reflects amortization expense related to these licenses and recorded in Depreciation and amortization:
Years Ended December 31,
2022
2021
2020
Amortization expense
$
5.0 
$
4.6 
$
1.2 
The following are our total minimum guaranteed obligations for the periods presented:
As of December 31,
2022
2021
Current liabilities
$
3.3 
$
3.7 
Other long-term liabilities
8.9 
11.2 
Total minimum guarantee obligations
$
12.2 
$
14.9 
Weighted average remaining term (in years)
2.8
3.9
Revolving Credit Facility
SciPlay Games, LLC (formerly known as SciPlay Holding Company, LLC) (“SciPlay Games”), 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 “Revolver”). 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, the fee for
which varies based on the total net leverage ratio and is subject to a floor of 0.375%. As of December 31, 2022, 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%.
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On February 28, 2022, we entered into Amendment No. 2 to the Revolver, by and among SciPlay Games, SciPlay Parent LLC, the several banks
and other financial institutions or entities from time to time party thereto and Bank of America, N.A., as administrative agent, collateral agent and issuing
lender (such amendment, “Amendment No. 2”). Amendment No. 2, among other things, (i) amended certain interest rate provisions related to Sterling-
denominated revolving loans, (ii) increased SciPlay Games’ and its subsidiaries capacity to acquire non-loan parties and (iii) allowed for the acquisition of
Alictus.
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, 2022, 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 Games, 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 Games and each subsidiary guarantor party thereto, in each case, subject to
customary exceptions.
Any debt issuance costs associated with the Revolver are capitalized, presented in Other assets and amortized over the term of the arrangement
and reflected in Other income (expense). We have incurred $0.6 million in unused revolver commitment fees during the year ended December 31, 2022,
which are reflected in Other income (expense).
New Accounting Guidance ‑ Recently Adopted
The FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts
with Customers, in October 2021. The new guidance requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a
business combination in accordance with revenue recognition guidance. We adopted this standard during the third quarter of 2022 on a retrospective basis
for the current fiscal year. 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 and ASU No. 2022-06, Reference Rate Reform (Topic 848) in March
2020, January 2021 and December 2022, 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 by
June 2023. 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. Based on our assessment, we do not expect the
adoption of this guidance to have a significant impact 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.
73

(2) Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
.
As of December 31,
2022
2021
Prepaid expenses and other
$
7.1 
$
4.6 
Income tax receivable
0.8 
1.6 
Contract assets
0.1 
0.2 
$
8.0 
$
6.4 
(3) 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,
2022
2021
Computer equipment
$
6.0 
$
5.7 
Furniture and fixtures
2.2 
2.1 
Leasehold improvements and other
3.2 
3.1 
Less: accumulated depreciation and amortization
(8.4)
(7.4)
Total property and equipment, net
$
3.0 
$
3.5 
The following reflects depreciation and amortization expense related to property and equipment included within Depreciation and amortization:
Years Ended December 31,
2022
2021
2020
Depreciation and amortization expense
$
1.7 
$
1.8 
$
1.7 
(4) Goodwill, Intangible Assets and Software, net
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the assets acquired and liabilities assumed of acquired companies, along
with the goodwill 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
legacy acquisitions.
We have identified a single reporting unit based on our management structure. Goodwill is tested 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.
We test our goodwill using the qualitative assessment to determine whether the fair value is “more likely than not” less than its carrying value. When
qualitative factors indicate that the fair value is more likely than not less than its carrying value, a quantitative assessment is performed and an impairment
charge is recognized for the amount by which the carrying value exceeds the fair value determined based on a quantitative test, not to exceed the total
amount of goodwill.
74

Our annual goodwill impairment test as of October 1, 2022 indicated estimated fair value 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, 2020 to December 31, 2022.
Total
Balance as of December 31, 2020
$
129.8 
Foreign currency adjustments
1.3 
Balance as of December 31, 2021
131.1 
Acquired goodwill
92.8 
Foreign currency adjustments
(6.3)
Balance as of December 31, 2022
$
217.6 
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 periodically increase due to the acquisition of intangible assets in
conjunction with business combinations, as well as when we enter into new minimum guarantee license agreements. 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, 2022
Amortizable intangible assets:
Intellectual property
$
75.2 
$
(43.2)
$
32.0 
Customer relationships
29.9 
(24.1)
5.8 
Software
37.6 
(22.6)
15.0 
Licenses
25.9 
(9.4)
16.5 
Brand names and other
10.6 
(5.1)
5.5 
$
179.2 
$
(104.4)
$
74.8 
Balance as of December 31, 2021
Amortizable intangible assets:
Intellectual property
$
49.6 
$
(40.4)
$
9.2 
Customer relationships
30.7 
(22.1)
8.6 
Software
28.1
(17.8)
10.3 
Licenses
23.6
(4.5)
19.1 
Brand names and other
6.7 
(4.3)
2.4 
$
138.7 
$
(89.1)
$
49.6 
.
75

The following reflects amortization expense related to intangible assets included within Depreciation and amortization:
Years Ended December 31,
2022
2021
2020
Amortization expense
$
19.7 
$
13.7 
$
8.0 
Estimated amortization expense for the years ending December 31, 2023 through 2027 and thereafter is as follows:
Year
Expense
2023
$
22.3 
2024
19.5 
2025
17.0 
2026
8.9 
2027
6.2 
Thereafter
0.9 
$
74.8 
(5) Accrued Liabilities
Accrued liabilities consisted of the following:
As of December 31,
2022
2021
Legal contingencies
$
— 
$
24.5 
Compensation and benefits
16.3 
11.7 
Liabilities under the TRA
4.1 
4.1 
License minimum guarantees
3.3 
3.7 
Operating lease liabilities
2.3 
2.2 
Contingent acquisition consideration and redeemable noncontrolling interest
2.9 
1.0 
Income and other taxes
1.3 
0.4 
Other
5.0 
2.6 
$
35.2 
$
50.2 
 Includes $3.0 million and $0.9 million in liability-classifed equity awards as of December 31, 2022 and 2021, respectively.
(6) Leases
Our operating leases primarily consist of real estate office leases. Our leases have remaining terms of approximately 2 years. We do not have any
material finance leases. Our total variable and short term lease payments and operating lease expenses were immaterial for all periods presented.
(1)
(1)
76

Supplemental balance sheet and cash flow information related to operating leases is as follows:
As of December 31,
2022
2021
Operating lease right-of-use assets
$
4.8 
$
6.8 
   Accrued liabilities
2.3 
2.2 
   Operating lease liabilities
3.1 
5.4 
Total operating lease liabilities
$
5.4 
$
7.6 
Weighted average remaining lease term, years
2.3
3.3
Weighted average discount rate
4.9 %
5.0 %
Years Ended December 31,
2022
2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases
$
2.5 
$
2.4 
 Right-of-use assets obtained in exchange for lease obligations for the year ended December 31, 2022 were immaterial.
Lease liability maturities:
Operating Leases
2023
$
2.5 
2024
2.4 
2025
0.7 
Less: imputed interest
(0.2)
Total
$
5.4 
Our total operating lease expenses were $2.8 million, $2.7 million and $2.7 million for the years ended December 31, 2022, 2021 and 2020,
respectively. The total amount of variable and short-term lease payments was immaterial for all periods presented.
As of December 31, 2022, we did not have material additional operating leases that have not yet commenced.
(7) Stockholders’ Equity and Noncontrolling Interest
Stockholders’ Equity
Holders of our Class A common stock and Class B common stock vote together as a single class, 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 L&W Member and its affiliates represents at least 10% of our outstanding shares of common stock and,
thereafter, one vote per share. As of December 31, 2022, Light & Wonder owned all of the outstanding Class B common stock. Accordingly, Light &
Wonder controls shares representing 97.9% of the voting power in us and continues to have a controlling financial interest in and consolidate us.
(1)
(1)
77

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 17.6% economic interest in SciPlay Parent LLC. The remaining 82.4% economic interest in SciPlay Parent LLC is owned
indirectly by Light & Wonder, through the ownership of LLC Interests by the indirect wholly owned subsidiary of Light & Wonder, the L&W Member.
Stock-Based Compensation
Our Long-Term Incentive Plan 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. For offering
periods in 2022 and 2021, we issued approximately 38,203 and 28,639 shares at an average price of $12.73 per share for both periods.
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. In October 2022, L&W granted RSUs to certain executives with a fair value of $2.5 million, expected to be amortized over 2.8
years.
The following table summarizes stock‑based compensation expense that is included in General and administrative expenses:
Years Ended December 31,
2022
2021
2020
Related to SciPlay equity awards
$
11.6 
$
6.8 
$
21.4 
Related to the Parent’s equity awards
0.2 
0.4 
0.6 
Total
$
11.8 
$
7.2 
$
22.0 
Restricted Stock Units (RSUs)
A summary of changes in unvested RSUs under our equity-based compensation plans during 2022 is presented below:
Number of Shares
Weighted Average Grant
Date Fair Value
Unvested RSU as of December 31, 2021
677,161  $
14.74 
Granted
1,607,307  $
12.60 
Vested
(342,361) $
14.27 
Cancelled
(160,152) $
14.71 
Unvested RSU as of December 31, 2022
1,781,955  $
13.15 
The weighted-average grant date fair value of RSUs granted during 2022, 2021, and 2020, was $12.60, $18.40, and $12.66, 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, 2022, we had $19.1 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 1.4 years. The fair value at vesting date of RSU’s vested during the years ended December 31, 2022, 2021, and 2020, was
$4.2 million, $4.6 million, and $1.7 million respectively.
78

Performance-Based Restricted Stock Units (PRSUs)
SciPlay employees, including our senior executives, are granted PRSUs with respect to our Class A common stock. The performance criteria for
vesting of such PRSUs granted is generally based on revenue and/or Adjusted EBITDA metrics. Recipients of these awards generally must be actively
employed by and providing services to the Company on the day the granted PRSUs vest 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 average high-low price of our Class A common stock for the day prior to 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 using our current management forecast and adjust stock-based compensation expense to reflect current expected results, as necessary.
The following is a summary of changes in unvested PRSUs during 2022:
Number of Shares
Weighted Average Grant
Date Fair Value
Unvested PRSU as of December 31, 2021
1,451,543  $
17.13 
Granted
—  $
— 
Vested
(40,602) $
12.33 
Cancelled
(1,186,884) $
16.84 
Unvested PRSU as of December 31, 2022
224,057  $
16.80 
The weighted-average grant date fair value of PRSUs granted during 2021 and 2020 was $17.22 and $14.94, respectively. All of the PRSUs
granted during 2022 remained unvested as of December 31, 2022, and were considered to be liability-classified awards as of December 31, 2022. As of
December 31, 2022, we had $2.6 million of unrecognized stock-based compensation expense relating to unvested PRSUs (including liability-classified
awards) that will be amortized on a straight-line basis over a weighted-average remaining term of approximately 0.6 years. The fair value at vesting date of
PRSU’s vested during the years ended December 31, 2022, 2021, and 2020 and classified as equity awards, was $0.4 million, $38.1 million, and
$0.5 million, respectively. As of December 31, 2022, we had $4.5 million in liability-classified PRSUs, $1.5 million of which was included within Other
long-term liabilities.
Share Repurchase Program
On May 9, 2022, our Board of Directors approved a share repurchase program under which the Company is authorized to repurchase, from time to
time through May 9, 2024, up to an aggregate amount of $60.0 million of our outstanding Class A common stock. Repurchases may be made at the
discretion of the Board of Directors through one or more open market transactions, privately negotiated transactions, including block trades, accelerated
share repurchases, issuer tender offers or other derivative contracts or instruments, “10b5-1” plan, or other financial arrangements or other arrangements.
Repurchases are funded from cash flows generated by SciPlay Parent LLC and its operating subsidiaries. Immediately prior to the execution of such
repurchases, a redemption is effected of a corresponding number of SciPlay Parent LLC partnership units held by the Company at an aggregate redemption
price equal to the aggregate purchase price (plus any expenses related thereto) of the shares of Class A common stock being repurchased by the Company.
During the year ended December 31, 2022, we repurchased 2.7 million shares of Class A common stock under the program at an aggregate cost of $37.1
million.
(8) 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.
79

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,
2022
2021
2020
Numerator:
Net income
$
150.8 
$
125.0 
$
146.0 
Less: Net income attributable to the noncontrolling interest
128.4 
105.7 
125.1 
Net income attributable to SciPlay
$
22.4 
$
19.3 
$
20.9 
Denominator:
Weighted average shares of Class A common stock for basic EPS
23.9 
24.2 
22.8 
Effect of dilutive securities:
Stock-based compensation grants
0.6 
0.8 
1.6 
Weighted average shares of Class A common stock for diluted EPS
24.5 
25.0 
24.4 
Basic and diluted net income attributable to SciPlay per share:
  Basic
$
0.94 
$
0.80 
$
0.92 
  Diluted
$
0.91 
$
0.77 
$
0.86 
(9) 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 17.6% in SciPlay Parent LLC. The 82.4% 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,
2022
2021
2020
United States
$
159.8 
$
128.6 
$
155.0 
Foreign
(8.3)
2.1 
(0.6)
Net income before income taxes
$
151.5 
$
130.7 
$
154.4 
80

The components of Income tax expense (benefit) are as follows:
Years Ended December 31,
2022
2021
2020
Current
U.S. Federal
$
2.5 
$
0.4 
$
1.7 
U.S. State
0.9 
0.4 
1.3 
Foreign
2.8 
1.2 
1.0 
Total
$
6.2 
$
2.0 
$
4.0 
Deferred
U.S. Federal
3.5 
4.4 
3.6 
U.S. State
0.7 
0.2 
0.9 
Foreign
(9.7)
(0.9)
(0.1)
Total
(5.5)
3.7 
4.4 
Total income tax expense
$
0.7 
$
5.7 
$
8.4 
The reconciliation of the U.S. federal statutory tax rate to the actual tax rate is as follows:
Years Ended December 31,
2022
2021
2020
Statutory U.S. federal income tax rate
21.0 %
21.0 %
21.0 %
Foreign earnings at rates other than the U.S. statutory rate
(3.0)%
— %
— %
U.S. state income taxes, net of federal benefit
1.0 %
0.5 %
1.3 %
Noncontrolling interest
(17.9)%
(16.7)%
(17.3)%
Other
(0.6)%
(0.4)%
0.4 %
Effective income tax rate
0.5 %
4.4 %
5.4 %
Our effective tax rate for the years ended December 31, 2022, 2021, and 2020 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.
The tax effects of significant temporary differences representing net deferred tax assets and liabilities consisted of the following:
As of December 31,
2022
2021
Deferred tax assets:
Investment in LLC
$
65.9 
$
73.1 
TRA liability
15.6 
16.7 
Other
2.6 
1.5 
Valuation allowance
(8.1)
(12.1)
Realizable deferred tax assets
76.0 
79.2 
Deferred tax liabilities:
Difference in financial reporting and tax basis for:
Identifiable intangible assets
(2.3)
(3.5)
Other
— 
(0.7)
Total deferred tax liabilities
(2.3)
(4.2)
Net deferred tax assets on balance sheet
$
73.7 
$
75.0 
81

In 2019, 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 have 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, 2022, we did not have any material NOL or credit carryforwards.
The following table summarizes our valuation allowances:
As of December 31,
2022
2021
Federal
$
(7.0)
$
(10.5)
State
(1.1)
(1.6)
Foreign
— 
— 
$
(8.1)
$
(12.1)
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, 2022 and 2021, we had no unrecognized tax
benefits.
We file income tax returns in the U.S. Federal jurisdiction and various state and foreign jurisdictions. We are generally not subject to examination
for periods prior to December 31, 2019. There are no material U.S. federal, state, local or non-U.S. examinations by tax authorities currently ongoing.
(10) Related Party Transactions
The following is the summary of expenses paid to Light & Wonder and settled in cash:
Years Ended December 31,
2022
2021
2020
Financial Statement Line Item
Royalties to Light & Wonder for third-party IP
$
0.8 
$
2.6 
$
7.0 
Cost of revenue
Parent services
6.0 
5.8 
5.9 
General and administrative
TRA payments
3.8 
3.8 
2.5 
Accrued liabilities
Distributions to Parent and affiliates, net
23.1 
30.0 
12.8 
Noncontrolling interest
 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.
(1)
(1)
(1)
82

The following is the summary of balances due to affiliates:
As of December 31,
2022
2021
Royalties to Light & Wonder for third-party IP
$
0.2 
$
0.3 
Parent services
0.4 
0.9 
Reimbursable expenses to (from) Light & Wonder and its subsidiaries
3.2 
0.4 
$
3.8 
$
1.6 
IP Royalties
In 2018, we entered into the IP License Agreement from which we obtained an exclusive (subject to certain limited exceptions), perpetual, non-
royalty-bearing license from LNW Gaming, Inc. (a subsidiary of the Parent, formerly known as Bally Gaming, Inc.) (“LNW Gaming”) for intellectual
property created or acquired by LNW 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 LNW
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 LNW Gaming or its affiliates in our currently available games.
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.
Under the terms of the IP License Agreement, some rights would have changed from exclusive to non-exclusive for newly created intellectual
property and other rights would not have extended to newly created intellectual property as of May 6, 2022. On May 6, 2022, we entered into an
amendment which extended our rights under the IP License Agreement through July 7, 2022. We are in the process of negotiating new terms with the
Parent.
Parent Services
In connection with the IPO described above, we entered into a Services Agreement under which the Parent and its subsidiaries provide us the
below services.
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
We receive the same benefits as the L&W Member 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 L&W Member redeems or exchanges its 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 we entered into with the L&W Member in connection with the IPO provides for
the payment by us to the L&W Member 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. The annual tax benefits are computed by comparing the income taxes due
including such tax benefits and the income taxes due without such benefits.
The amount of aggregate payments due under the TRA may vary based on a number of factors, including the
83

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 years ended December 31, 2022 and 2021, payments totaling $3.8 million and $3.8 million, respectively were made to Light & Wonder
pursuant to the TRA. As of December 31, 2022 and 2021, the total TRA liability was $64.3 million and $68.8 million, respectively, of which $4.1 million
was included in Accrued liabilities for both periods.
Parent Equity Awards
See Note 7 for disclosures related to Parent’s equity awards.
(11) 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, 2022, 2021 and 2020 amounted to $2.5 million, $2.3 million and $1.8 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, Sheryl Fife, filed a putative class action complaint, Fife v. Scientific Games Corporation, 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 Parent’s 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. On June 17, 2021, the district court denied that motion, and on June 23, 2021, SGC filed a
notice of appeal from the district court’s denial of that motion, and also filed a motion to stay all district court proceedings, pending the appeals court’s
ruling on the Company’s arbitration appeal. On November 23, 2021, Scientific Games entered into an agreement in principle to settle the lawsuit for the
amount of $24.5 million. On December 3, 2021, the district court granted a joint motion to stay appellate proceedings until final approval by the district
court of the parties’ settlement. On January 18, 2022, the parties executed a settlement agreement, and plaintiff filed an unopposed motion for preliminary
approval of the parties’ proposed settlement agreement. On January 19, 2022, the district court granted preliminary approval to the parties’ proposed
settlement. On August 12, 2022, the district court gave its final approval to the settlement. On August 18, 2022, the court entered judgment and dismissed
the action with prejudice. Although the case was brought against Light & Wonder, pursuant to the Intercompany Services Agreement, SciPlay fully paid the
settlement previously accrued in the amount of $24.5 million during the third quarter of 2022, due to the matter arising as a result of our business.
84

Boorn Matter
On September 15, 2022, plaintiff Hannelore Boorn filed a putative class action against Light & Wonder, Inc., SciPlay Corporation, and Appchi
Media Ltd. in the Fayette Circuit Court of the Commonwealth of Kentucky. In her complaint, plaintiff seeks to represent a putative class of all persons in
Kentucky who, within the past five years, purchased and allegedly lost $5.00 or more worth of chips, in a 24-hour period, playing SciPlay's online social
casino games. The complaint asserts claims for alleged violations of Kentucky’s “recovery of gambling losses” statute and for unjust enrichment, and seeks
unspecified money damages, the award of reasonable attorneys' fees and costs, pre- and post-judgment interest, and injunctive and/or other declaratory
relief. On October 18, 2022, defendants removed the action to the United States District Court for the Eastern District of Kentucky. On October 26, 2022,
the plaintiff filed a notice voluntarily dismissing the lawsuit without prejudice. On October 27, 2022, the district court entered an order dismissing the
lawsuit. On November 17, 2022, the plaintiff filed an arbitration demand against defendants before the American Arbitration Association, pursuant to
which she seeks declaratory judgments that (1) SciPlay’s online social casino games constitute gambling under Kentucky law, and (2) SciPlay’s terms of
service are void under Kentucky law. On January 12, 2023, the respondents filed their answering statement to plaintiff’s arbitration demand 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
arbitration demand are without merit, and intend to vigorously defend against them.
Allah Beautiful Matter
On December 19, 2022, claimant Prince Imanifest Allah Beautiful filed an arbitration demand against respondent SciPlay Corporation before the
American Arbitration Association. The complaint asserts claims for alleged violations of New Jersey’s anti-gambling statutes and seeks unspecified money
damages, including recovery of monies allegedly lost by players of SciPlay’s online social casino games other than the claimant. Respondent’s answering
statement is not yet due. 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 arbitration demand are without merit, and intend to vigorously defend against them.
Sprinkle Matter
On December 12, 2022, claimant Matthew Sprinkle filed an arbitration demand against respondent SciPlay Corporation before the American
Arbitration Association. The complaint asserts claims for alleged violations of Ohio’s anti-gambling statutes and seeks unspecified money damages,
including recovery of monies allegedly lost by players of SciPlay’s online social casino games other than the claimant. Respondent’s answering statement
is not yet due. 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 arbitration demand are without merit, and intend to vigorously defend against them.
85

SCHEDULE II
SCIPLAY CORPORATION
Valuation and Qualifying Accounts
Years Ended December 31, 2022, 2021 and 2020
(in millions)
Tax related valuation allowance
Balance at beginning
of period
Additions /
(deductions)
Balance at end of
period
Year Ended December 31, 2020
$
7.7 
1.9 
$
9.6 
Year Ended December 31, 2021
$
9.6 
2.5 
$
12.1 
Year Ended December 31, 2022
$
12.1 
(4.0)
$
8.1 
86

Exhibit
Number
Description
2.1
Purchase Agreement, dated as of March 1, 2022, by and among SciPlay Acquisition, LLC, Arif Emre Taş, Ecem Baran Taş, ALİCTUS
YAZILIM ANONİM ŞİRKETİ and SciPlay Games, LLC (incorporated by reference to Exhibit 2.1 to SciPlay Corporation’s Current
Report on Form 8-K filed on March 2, 2022)
3.1
Amended and Restated Articles of Incorporation of SciPlay Corporation (incorporated by reference to Exhibit 3.1 to SciPlay
Corporation’s Current Report on Form 8-K filed on May 8, 2019).
3.2
Second Amended and Restated Bylaws of SciPlay Corporation (incorporated by reference to Exhibit 3.2 to SciPlay Corporation’s Current
Report on Form 8-K filed on July 29, 2022).
4.1
Description of the Company’s Securities.*
10.1
Scientific Games Corporation (as predecessor to Light & Wonder, Inc.) 2003 Incentive Compensation Plan (Amended and Restated as of
June 9, 2021) (incorporated by reference to Exhibit 10.1 to SciPlay Corporation’s Annual Report on Form 10-K filed on March 2, 2022).
(†)
10.2
Offer Letter, dated as of July 30, 2018, from Phantom EFX, LLC to Daniel O’Quinn (incorporated by reference to Exhibit 10.1 to SciPlay
Corporation’s Quarterly Report on Form 10-Q filed on November 9, 2021).(†)
10.3
Amended and Restated SciPlay Corporation Long-Term Incentive Plan (Amended and Restated as of June 9, 2021) (incorporated by
reference to Exhibit 10.1 to SciPlay Corporation’s Current Report on Form 8-K filed on June 11, 2021).(†)
10.4
Amended and Restated Operating Agreement of SciPlay Parent Company, LLC, dated May 2, 2019, by and among SciPlay Parent
Company, LLC, the Company and its Members (incorporated by reference to Exhibit 10.1 to SciPlay Corporation’s Current Report on
Form 8-K filed on May 8, 2019).
10.5
Tax Receivable Agreement, dated May 7, 2019, by and among SciPlay Corporation, SciPlay Parent Company, LLC and each of the
Members from time to time party thereto (incorporated by reference to Exhibit 10.2 to SciPlay Corporation’s Current Report on Form 8-K
filed on May 8, 2019).
10.6
Registration Rights Agreement, dated May 7, 2019, by and among SciPlay Corporation, SG Social Holding Company I, LLC (as
predecessor to LNW Social Holding Company I, LLC) and such other persons from time to time party thereto (incorporated by reference
to Exhibit 10.3 to SciPlay Corporation’s Current Report on Form 8-K filed on May 8, 2019).
10.7
License Agreement, dated May 7, 2019, by and between Bally Gaming, Inc. (as predecessor to LNW Gaming, Inc.) and SG Social
Holding Company I, LLC (as predecessor to LNW Social Holding Company I, LLC) (incorporated by reference to Exhibit 10.4 to SciPlay
Corporation’s Current Report on Form 8-K filed on May 8, 2019).
10.8
First Amendment to IP License Agreement, dated as of May 6, 2022, by and between SciPlay Games, LLC and SG Gaming, Inc. (as
predecessor to LNW Gaming, Inc.) (incorporated by reference to Exhibit 10.1 to SciPlay Corporation’s Current Report on Form 8-K filed
on May 10, 2022)
10.9
Assignment Agreement, dated May 7, 2019, by and between SG Social Holding Company I, LLC and SciPlay Holding Company, LLC
(as predecessor to SciPlay Games, LLC) (incorporated by reference to Exhibit 10.5 to SciPlay Corporation’s Current Report on Form 8-K
filed on May 8, 2019).
10.10
Services Agreement, dated May 7, 2019, by and among Scientific Games Corporation (as predecessor to Light & Wonder, Inc.), Scientific
Games International, Inc. (as predecessor to Light and Wonder International, Inc.), Bally Gaming, Inc. (as predecessor to LNW Gaming,
Inc.) and SciPlay Holding Company, LLC (as predecessor to SciPlay Games, LLC) (incorporated by reference to Exhibit 10.6 to SciPlay
Corporation’s Current Report on Form 8-K filed on May 8, 2019).
10.11
Credit Agreement, dated May 7, 2019, among SciPlay Holding Company, LLC (as predecessor to SciPlay Games, LLC), as the borrower,
SciPlay Parent Company, LLC, the several lenders from time to time parties thereto, Bank of America, N.A., as administrative agent,
collateral agent and issuing lender, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, JPMorgan Chase Bank, N.A., Deutsche Bank
Securities Inc., Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc., Macquarie Capital (USA) Inc. and RBC Capital
Markets, as joint lead arrangers and joint bookrunners (incorporated by reference to Exhibit 10.7 to SciPlay Corporation’s Current Report
on Form 8-K filed on May 8, 2019).
10.12
Employment Agreement, dated as of May 7, 2019, by and between SciPlay Parent Company, LLC and Joshua J. Wilson (incorporated by
reference to Exhibit 10.8 to SciPlay Corporation’s Current Report on Form 8-K filed on May 8, 2019).(†)
10.13
Amendment to Employment Agreement, dated as of September 26, 2022, by and between SciPlay Corporation and Joshua J. Wilson
(incorporated by reference to Exhibit 10.1 to SciPlay Corporation’s Quarterly Report on Form 10-Q filed on November 9, 2022).(†)
10.14
Employment Agreement, dated as of December 1, 2022, by and between SciPlay Parent Company, LLC and James Bombassei.*(†)
87

10.15
Amendment No. 1, dated as of May 27, 2021, among SciPlay Holding Company, LLC (as predecessor to SciPlay Games, LLC), as the
borrower, SciPlay Parent Company, LLC, the several lenders from time to time parties thereto and Bank of America, N.A., as
administrative agent, collateral agent and issuing lender, which amended the Credit Agreement, dated as of May 7, 2019 (incorporated by
reference to Exhibit 10.1 to SciPlay Corporation’s Current Report on Form 8-K filed on May 27, 2021).
10.16
Amendment No. 2, dated as of February 28, 2022, among SciPlay Games, LLC, as the borrower, SciPlay Parent Company, LLC, the
several lenders from time to time parties thereto and Bank of America, N.A., as administrative agent, collateral agent and issuing lender,
which amended the Credit Agreement, dated as of May 7, 2019 (as amended, supplemented, amended and restated or otherwise modified
from time to time, including without limitation, by that certain Amendment No. 1, dated as of may 27, 2021) (incorporated by reference to
Exhibit 10.1 to SciPlay Corporation’s Current Report on Form 8-K filed on March 2, 2022).
10.17
SciPlay Corporation 2020 Employee Stock Purchase Plan, dated April 21, 2020 (incorporated by reference to Exhibit 10.1 to SciPlay
Corporation’s Current Report on Form 8-K filed on June 12, 2020).(†)
21.1
Subsidiaries of the Registrant.*
23.1
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.*
31.1
Certification of the Chief Executive Officer of SciPlay Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
31.2
Certification of the Chief Financial Officer of SciPlay Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*
32.1
Certification of the Chief Executive Officer of SciPlay Corporation pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2
Certification of the Chief Financial Officer of SciPlay Corporation pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
99.1
Terms and Conditions of Equity Awards to Key Employees under the SciPlay Corporation Long-Term Incentive Plan (incorporated by
reference to Exhibit 99.1 to SciPlay Corporation’s Quarterly Report on Form 10-Q filed on November 8, 2019).(†)
99.2
Terms and Conditions of Equity Awards to Non-Employee Directors under the SciPlay Corporation Long-Term Incentive Plan
(incorporated by reference to Exhibit 99.2 to SciPlay Corporation’s Quarterly Report on Form 10-Q filed on November 8, 2019).(†)
99.3
Terms and Conditions of Equity Awards to Key Employees under the Scientific Games Corporation (as predecessor to Light & Wonder,
Inc.) 2003 Incentive Compensation Plan (Amended and Restated June 9, 2021) (incorporated by reference to Exhibit 10.1 to SciPlay
Corporation’s Annual Report on Form 10-K filed on March 2, 2022).(†)
101.INS
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are
embedded within the Inline XBRL document
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Label Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags
are embedded within the Inline XBRL document.
*Filed herewith.
** Furnished herewith.

(†) Management contracts and compensation plans and arrangements.
88

ITEM 16. FORM 10-K SUMMARY
Not applicable.
SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
March 1, 2023
SCIPLAY CORPORATION
(Registrant)
By:
/s/Daniel O’Quinn
Name:
Daniel O’Quinn
Title:
Interim Chief Financial Officer and Secretary
(Principal Financial Officer and Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on March 1, 2023.
Signature
Title
/s/Joshua J. Wilson
Chief Executive Officer and Director

(Principal Executive Officer)

Joshua J. Wilson
/s/Daniel O’Quinn
Interim Chief Financial Officer and Secretary

(Principal Financial Officer and Principal Accounting Officer)

Daniel O’Quinn
/s/Antonia Korsanos
Chair of the Board of Directors and Director

Antonia Korsanos
/s/Gerald D. Cohen
Director
Gerald D. Cohen
/s/Nicholas Earl
Director
Nicholas Earl
/s/April Henry
Director
April Henry
/s/Constance James
Director
Constance James
/s/Michael Marchetti
Director
Michael Marchetti
/s/Charles Prober
Director
Charles Prober
/s/William C. Thompson, Jr.
Director
William C. Thompson, Jr.
89

Exhibit 4.1
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES
EXCHANGE ACT OF 1934
SciPlay Corporation has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”): our Class A common stock.
The following summarizes the material terms of the Class A common stock of SciPlay Corporation (the “Company”) as
set forth in the Company’s Amended and Restated Articles of Incorporation (the “Charter”) and the Company’s Second Amended
and Restated Bylaws (the “Bylaws”), as well as in the Amended and Restated Operating Agreement of SciPlay Parent Company,
LLC (“SciPlay Parent LLC”), dated May 2, 2019, by and among SciPlay Parent LLC, the Company and its Members (the
“SciPlay Parent LLC Agreement”), the Registration Rights Agreement, dated May 7, 2019, by and among the Company, LNW
Social Holding Company I, LLC (previously known as SG Social Holding Company I, LLC) ("LNW Holding I") and such other
persons from time to time party thereto (the “Registration Rights Agreement”) and Chapters 86 and 92A of the Nevada Revised
Statutes (the “NRS”). While we believe that the following description covers the material terms of such securities, the following
summary may not contain all of the information that may be important to you and is subject to and qualified in its entirety by
reference to applicable Nevada law, including the NRS and to the Charter, the Bylaws, the SciPlay Parent LLC Agreement and
the Registration Rights Agreement, each of which is filed as an exhibit to the Annual Report on Form 10-K of which this Exhibit
4.1 is a part. As used herein, unless otherwise expressly stated or the context otherwise requires, the terms “Company”, “we”,
“our” and “us” refer to SciPlay Corporation and not to any of its subsidiaries.
General
We are incorporated under the laws of the State of Nevada. The rights of our stockholders are governed by the NRS, the
Charter and the Bylaws.
Authorized Stock
Under the Charter, our authorized capital stock consists of 625,000,000 shares of Class A common stock, par value $.001
per share (“Class A common stock”), 130,000,000 shares of Class B common stock, par value $.001 per share (“Class B common
stock”), and 10,000,000 shares of preferred stock, par value $.001 per share.
Common Stock
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 in the following circumstances where separate class voting is required by
Nevada law: (i) a proposed amendment to the Charter that would adversely alter any preference or other right of our Class A
common stock or Class B common stock, (ii) a board resolution providing for a proposed decrease in the number of issued and
outstanding shares of our Class A common stock or Class B common stock, as the case may be, which proposed decrease would
adversely alter any

preference or other right of the other class of our common stock or (iii) a board resolution providing for a proposed increase or
decrease in the number of authorized shares and a corresponding increase or decrease of issued and outstanding shares of our
Class A common stock or Class B common stock, as the case may be, which proposed increase or decrease in the number of
authorized shares would adversely alter any preference or other right of the other class of our common stock. An election of
directors by our stockholders is determined by a plurality of the votes cast by the stockholders entitled to vote on the election, and
each director may be removed by an affirmative vote of the holders of at least two-thirds of the voting power of the issued and
outstanding shares of capital stock entitled to vote thereon. Other matters will be decided by a majority of the votes cast at a
meeting at which a quorum is present. See below under “-Anti-Takeover Effects and Our Articles of Incorporation and Bylaws.”
Class A Common Stock
Voting Rights. Holders of Class A common stock are entitled to one vote for each share of Class A common stock held on
all matters submitted to a vote of stockholders. Holders of Class A common stock do not have cumulative voting rights.
Dividend Rights. Holders of Class A common stock are be entitled to receive proportionately any dividends as may be
declared by our board of directors, subject to any preferential dividend rights of any series of preferred stock that we may
designate and issue in the future.
Liquidation Rights. In the event of our liquidation or dissolution, the holders of Class A common stock are entitled to
receive proportionately our net assets available for distribution to stockholders after the payment of all debts and other liabilities
and subject to the prior rights of any outstanding preferred stock.
Other Matters. Holders of Class A common stock have no preemptive, subscription, redemption or conversion rights. The
rights, preferences and privileges of holders of Class A common stock will be subject to and may be adversely affected by the
rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.
Class B Common Stock
Issuance of Class B common stock with Common Units. Shares of Class B common stock will only be issued in the future
to the extent necessary to maintain a one-to-one ratio between the number of Common Units (as defined in the SciPlay Parent
LLC Agreement) held by LNW Holding I and the number of shares of Class B common stock issued to LNW Holding I. Shares
of Class B common stock will be transferable only together with an equal number of Common Units.
Voting Rights. Holders of Class B common stock will be entitled to ten votes for each share of Class B common stock
held on all matters submitted to a vote of stockholders, for so long as the number of shares of our common stock beneficially
owned by LNW Holding I and its affiliates represents at least 10% of the issued and outstanding shares of common stock,
provided that, from and after the first date on which LNW Holding I and its affiliates cease to beneficially own at least 10% of
our issued and outstanding shares of common stock, each share of Class B

common stock shall entitle the record holder thereof to one vote on all matters to be voted on by the stockholders. Holders of
Class B common stock will not have cumulative voting rights.
Exchange for Class A Common Stock. Pursuant to the SciPlay Parent LLC Agreement, LNW Holding I may require
SciPlay Parent LLC to redeem all or a portion of the Common Units held by LNW Holding I for newly issued shares of Class A
common stock on a one-for-one basis or, at our option, instead make a cash payment determined by reference to the arithmetic
average of the volume weighted average market prices of one share of our Class A common stock over a specified period prior to
the date of redemption for each Common Unit redeemed. We will be required to contribute cash and/or shares of Class A
common stock to SciPlay Parent LLC to satisfy such redemption or exchange, and SciPlay Parent LLC will issue to us newly
issued LLC Interests equal to the number of Common Units redeemed from LNW Holding I. In lieu of such a redemption, we
will have the right, at our option, to effect a direct exchange of cash and/or shares of our Class A common stock for LNW
Holding I’s Common Units. Shares of our Class B common stock will be cancelled for no other consideration on a one-for-one
basis whenever LNW Holding I’s Common Units are so redeemed or exchanged.
Preferred Stock
Under the terms of the Charter, our board of directors is authorized to cause the designation and issuance of up to
10,000,000 shares of preferred stock, in one or more series, without stockholder approval. No shares of preferred stock are
presently outstanding. Our board of directors will have the discretion to determine the designations, relative rights, limitations
preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and
liquidation preferences, if any, of each series of preferred stock.
The purpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to
eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing
flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our
outstanding voting stock. We have no present plans to issue any shares of preferred stock.
Registration Rights
The Registration Rights Agreement provides LNW Holding I certain registration rights to require us to register under the
Securities Act of 1933 (the “Securities Act”) shares of Class A common stock issuable to it upon redemption or exchange of its
Common Units.
Anti-Takeover Effects and Our Articles of Incorporation and Bylaws
Some provisions of Nevada law, the Charter and the Bylaws could make the following transactions more difficult: an
acquisition of us by means of a tender offer; a change of control of us by means of a proxy contest or otherwise; or the removal of
our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter
transactions that stockholders may otherwise consider to be in their best interests or in our

best interests, including transactions which provide for payment of a premium over the market price for our shares.
These provisions, summarized below, are intended to discourage coercive takeover practices and inadequate takeover
bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our board of
directors. We believe that the benefits of the increased protection of our potential ability to negotiate with the proponent of an
unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals
because negotiation of these proposals could result in an improvement of their terms.
Undesignated Preferred Stock
The ability of our board of directors, without action by the stockholders, to designate and authorize the issuance of up to
10,000,000 shares of undesignated preferred stock with voting or other rights or preferences as designated by our board of
directors could have the effect of making changes in control or management of our company more difficult and expensive to
accomplish.
Stockholder Meetings
The Charter and the Bylaws provide that stockholders owning shares representing a majority of the combined voting
power of our issued and outstanding common stock have the right to call a special meeting of stockholders until the first date that
LNW Holding I and its affiliates (other than us and our controlled affiliates) cease to beneficially own shares of our common
stock representing greater than 50% of the combined voting power of our common stock. The Charter and the Bylaws provide
that thereafter, subject to applicable law, special meetings of the stockholders may be called only by the secretary of the Company
at the written request of the majority of our board of directors, by the chairman of our board of directors or by the president of the
Company.
Requirements for Advance Notification of Stockholder Nominations and Proposals
The Bylaws establish advance notice procedures with respect to stockholder proposals to be brought before a stockholder
meeting and the nomination of candidates for election as directors, other than proposals and nominations made by or at the
direction of the board of directors or a committee of the board of directors.
Elimination of Stockholder Action by Written Consent
The Charter and the Bylaws do not permit stockholders to act by written consent without a meeting after the first date that
LNW Holding I and their affiliates (other than us and our controlled affiliates) cease to beneficially own shares of our common
stock representing greater than 50% of the combined voting power of our common stock.
Removal of Directors

The NRS, the Charter and the Bylaws provide that no member of our board of directors may be removed from office by
our stockholders except, in addition to any other vote required by law, upon the approval of the holders of at least two-thirds of
the voting power of the outstanding shares of stock entitled to vote in the election of directors.
Stockholders Not Entitled to Cumulative Voting
The Charter does not permit stockholders to cumulate their votes in the election of directors. Accordingly, and pursuant to
the Bylaws, directors are elected by a plurality of the votes cast by stockholders entitled to vote in the election of directors.
Exclusive Forum
The Charter and the Bylaws collectively provide that, to the fullest extent permitted by law, and unless otherwise agreed
by the Company in writing, the Eighth Judicial District Court of Clark County, Nevada is the sole and exclusive forum for any
action, suit or proceeding, whether civil, administrative or investigative, (a) against the Company or any of its directors or
officers that (i) asserts a cause of action under the laws of the United States, (ii) could be properly commenced in either a federal
forum or a forum of this State or any other state, and (iii) is brought by or in the name or on behalf of (A) the Company, (B) any
stockholder of the Company, or (C) any subscriber for, or purchaser or offeree of, any shares or other securities of the Company;
and (b) (i) brought in our name or right or on our behalf, (ii) asserting a claim or counterclaim for or based upon any breach of
any fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) arising or asserting a
claim or counterclaim arising pursuant to any provision of NRS Chapters 78 or 92A or any provision of the Charter or Bylaws, or
(iv) asserting a claim or counterclaim governed by the internal affairs doctrine. The Charter and Bylaws further provide that, in
the event that the Eighth Judicial District Court of Clark County, Nevada does not have jurisdiction over any such action, suit or
proceeding, then any other state district court located in the State of Nevada will be the sole and exclusive forum therefor and in
the event that no state district court in the State of Nevada has jurisdiction over any such action, suit or proceeding, then a federal
court located within the State of Nevada will be the sole and exclusive forum therefor.
Anti-Takeover Effects of Nevada Law
The State of Nevada, where we are incorporated, has enacted statutes, summarized below, that could prohibit or delay
mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire us even though
such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price. We
have opted out of these statutes.
Compliance with Gaming Laws
The Charter provides that, in order for Light & Wonder, Inc. (previously known as Scientific Games Corporation)
(“L&W”) or any other affiliate of the Company to secure and maintain in good standing its gaming licenses, any record or
beneficial holder of securities of the Company (i) who is determined or shall have been determined by any gaming authority not
to be

suitable or qualified to be associated or have a relationship with L&W or any other affiliate of the Company or (ii) whose
ownership or control of securities of the Company may result, in the judgment of our board of directors, in the failure of L&W or
any other affiliate of the Company to obtain, maintain, retain, renew or qualify for a gaming license, or cause or otherwise result
in the imposition of any materially burdensome or unacceptable terms or conditions on any gaming license held by L&W or any
other affiliate of the Company, shall sell or otherwise dispose of their securities or other interests in the Company, or the
Company may redeem such securities, pursuant to a notice given by the Company.
Business Combinations and Acquisition of Control Shares
Nevada’s “combinations with interested stockholders” statutes (NRS 78.411 through 78.444, inclusive) prohibit specified
types of business “combinations” between certain Nevada corporations and any person deemed to be an “interested stockholder”
for two years after such person first becomes an “interested stockholder” unless the corporation’s board of directors approves the
combination (or the transaction by which such person first becomes an “interested stockholder”) in advance, or unless the
combination is approved by the board of directors and at least sixty percent of the corporation’s outstanding voting power not
beneficially owned by the interested stockholder, its affiliates and associates. Further, in the absence of prior approval, certain
restrictions may apply even after such two-year period. However, these statutes do not apply to any combination of a corporation
and an interested stockholder after the expiration of four years after the person first became an interested stockholder. For
purposes of these statutes, an “interested stockholder” is any person who is (1) the beneficial owner, directly or indirectly, of ten
percent or more of the voting power of the outstanding voting shares of the corporation, or (2) an affiliate or associate of the
corporation and at any time within the two previous years was the beneficial owner, directly or indirectly, of ten percent or more
of the voting power of the then-outstanding shares of the corporation. The definition of the term “combination” is sufficiently
broad to cover most significant transactions between a corporation and an “interested stockholder.” As noted above, the Charter
provides that the Company will not be subject to these statutes.
Nevada’s “acquisition of controlling interest” statutes (NRS 78.378 through 78.3793, inclusive) contain provisions
governing the acquisition of a controlling interest in certain Nevada corporations. These “control share” laws provide generally
that any person that acquires a “controlling interest” in certain Nevada corporations may be denied voting rights, unless a
majority of the disinterested stockholders of the corporation elects to restore such voting rights. The Bylaws provide that these
statutes will not apply to the Company or any acquisition of our capital stock. Absent such provision in our articles of
incorporation or bylaws, these laws would apply to us if we were to have 200 or more stockholders of record (at least 100 of
whom have addresses in Nevada appearing on our stock ledger) at all times during the immediately preceding 90 days and do
business in the State of Nevada directly or through an affiliated corporation, unless our articles of incorporation or bylaws in
effect on the tenth day after the acquisition of a controlling interest by an “acquiring person” provide otherwise. These laws
provide that a person acquires a “controlling interest” whenever such person acquires shares of a subject corporation that, but for
the application of these provisions of the NRS, would enable that person to exercise (1) one-fifth or more, but less than one-third,
(2) one-third or more, but less than a majority or (3) a majority or more, of all of the voting power of the corporation in the
election of directors. Once an acquirer crosses one of these thresholds, shares which it acquired

in the transaction taking it over the threshold and within the 90 days immediately preceding the date when the acquiring person
acquired or offered to acquire a controlling interest become “control shares” to which the voting restrictions described above
apply.
In addition, NRS 78.139 provides that directors may resist a change or potential change in control of a Nevada
corporation if the board of directors determines that the change or potential change is opposed to or not in the best interest of the
corporation upon consideration of any relevant facts, circumstances, contingencies or constituencies pursuant to NRS 78.138(4).
Dissenter’s Rights
The provisions of Nevada’s dissenter’s rights statutes (NRS 92A.300 through 92A.500, inclusive) specify certain
corporate actions giving rise to the right of a stockholder to demand payment of “fair value” (as defined in NRS 92A.320) of such
stockholder’s shares, subject to a number of limitations and procedural requirements.
Stockholders’ Derivative Actions
Our stockholders may be entitled to bring an action in our name to procure a judgment in our favor, also known as a
derivative action, subject to the requirements of applicable law.
Deemed Notice and Consent
The Charter and the Bylaws provide that any person purchasing or otherwise acquiring any interest in shares of our
capital stock will be deemed, to the fullest extent permitted by law, to have notice of and consented to all of the provisions of our
articles of incorporation, our bylaws (including, without limitation, the provisions described above under “-Exclusive Forum”)
and any amendment to our articles of incorporation or bylaws enacted in accordance therewith and applicable law.

Exhibit 10.14
Employment Agreement
This Employment Agreement (this “Agreement”) is made as of December 1, 2022 (the (“Effective Date”) by and between
SciPlay Parent Company, LLC, a Nevada limited liability company (the “Company”), and James Bombassei (“Executive”).
WHEREAS, the Executive is currently employed by Light & Wonder, Inc. (“Light & Wonder”) in the role of Senior Vice
President of Investor Relations;
WHEREAS, the Company and Executive wish to enter into this Agreement setting forth the terms and conditions of
Executive’s employment.
NOW, THEREFORE, in consideration of the premises and mutual benefits to be derived herefrom and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Company and Executive, the parties
agree as follows.
1. Employment; Term. The Company hereby agrees to employ Executive, and Executive hereby accepts employment with
the Company, in accordance with and subject to the terms and conditions set forth in this Agreement. This term of
employment of Executive under this Agreement (the “Term”) shall be the period commencing on the Effective Date and
ending on November 30, 2025, as may be extended in accordance with this Section 1 and subject to earlier termination in
accordance with Section 4. The Term shall be extended automatically without further action by either party by one (1)
additional year (added to the end of the Term), and then on each succeeding annual anniversary thereafter, unless either
party shall have given written notice to the other party prior to the date which is sixty (60) days prior to the date upon
which such extension would otherwise have become effective electing not to further extend the Term, in which case
Executive’s employment shall terminate on the date upon which such extension would otherwise have become effective,
unless earlier terminated in accordance with Section 4.
2. Position and Duties. During the Term, Executive will serve as Executive Vice President and Chief Financial Officer of
SciPlay Corporation (“SciPlay”) and as an officer or director of any subsidiary or affiliate of the Company if elected or
appointed to such positions, as applicable, during the Term. In such capacities, Executive shall perform such duties and
shall have such responsibilities as are normally associated with such positions, and as otherwise may be assigned to
Executive from time to time. Subject to Section 4(e), Executive’s functions, duties and responsibilities are subject to
reasonable changes as the Company or SciPlay may in good faith determine from time to time. Executive hereby agrees to
accept such employment and to serve the Company and its

subsidiaries and affiliates to the best of Executive’s ability in such capacities, devoting all of Executive’s business time to
such employment.
3. Compensation.
a. Base Salary. During the Term, Executive will receive a base salary of four hundred and fifty thousand U.S. dollars
(US$450,000.00) per annum (pro-rated for any partial year), payable in accordance with the Company’s regular
payroll practices and subject to such deductions or amounts to be withheld as required by applicable law and
regulations or as may be agreed to by Executive. In the event that the Company, in its sole discretion, from time to
time determines to increase Executive’s base salary, such increased amount shall, from and after the effective date
of such increase, constitute the “base salary” of Executive for purposes of this Agreement.
b. Incentive Compensation. Executive shall have the opportunity annually to earn incentive compensation
(“Incentive Compensation”) in amounts determined by the Compensation Committee of the SciPlay Board of
Directors (the “Compensation Committee”) in its sole discretion in accordance with the applicable incentive
compensation plan of the Company as in effect from time to time (the “Incentive Compensation Plan”). Under
such Incentive Compensation Plan, Executive shall have the opportunity annually to earn up to 75% of
Executive’s base salary as Incentive Compensation at “target opportunity” (“Target Bonus”) on the terms and
subject to the conditions of such Incentive Compensation Plan (any such Incentive Compensation to be subject to
such deductions or amounts to be withheld as required by applicable law and regulations or as may be agreed to by
Executive). Executive’s eligibility for 2022 Incentive Compensation from the Company will be pro-rated based on
the number of months he works during 2022.
c. Long-Term Senior Executive Incentive Plan. Beginning in 2023, Executive shall be eligible to participate in the
senior executive incentive plan for the Company (the “SEIP”) in accordance with the terms for such SEIP. Any
payout under the SEIP will be based on the growth of the business of the Company and its affiliates during the
measurement period as specified by the terms of the SEIP.
d. Eligibility for Annual Equity Awards. In addition to the SEIP, beginning in 2023 Executive shall be eligible to
receive an annual grant of stock options, restricted stock units or other equity awards with a grant date fair value
equal to approximately 75% of Executive's base salary, as measured in accordance with the Company's standard
practices of measuring equity value, and in accordance

with the applicable plans and programs of the Company for senior executives of the Company and subject to the
Company's right to at any time amend or terminate any such plan or program, so long as any such change does not
adversely affect any accrued or vested interest of Executive under any such plan or program ("Annual Equity
Awards"). All equity awards granted pursuant to this Agreement shall be subject to the terms of the Company's
standard form of award agreement under the Incentive Compensation Plan.
e. Expense Reimbursement. Subject to Section 3(i), the Company shall reimburse Executive for all reasonable and
necessary travel and other business expenses incurred by Executive in connection with the performance of
Executive’s duties under this Agreement, on a timely basis upon timely submission by Executive of vouchers
therefor in accordance with the Company’s standard policies and procedures.
f.
Employee Benefits. During the Term, Executive shall be entitled to participate, without discrimination or
duplication, in any and all medical insurance, group health, disability, life insurance, accidental death and
dismemberment insurance, 401(k) or other retirement, deferred compensation, stock ownership and such other
plans and programs which are made generally available by the Company and its affiliates to similarly situated
executives of the Company in accordance with the terms of such plans and programs and subject to the right of the
Company (or its applicable affiliate) to at any time amend or terminate any such plan or program. Executive shall
be entitled to paid time off, holidays and any other time off in accordance with the Company’s policies in effect
from time to time.
g. Sign-On Award. The Company will grant to Executive a sign-on equity award consisting of $500,000 worth of
time-vesting RSUs with respect to Company Class A common stock (the “Common Stock”), par value $0.001 per
share (the “Sign-On Award”). The number of RSUs granted shall be determined by dividing (i) $500,000 by (ii)
the average of the high and low prices of the Common Stock on the trading day immediately prior to the grant date
as reported on the Nasdaq stock exchange, and rounding fractional amounts down to the next lowest whole
number of RSUs. The Sign-On Award shall vest as follows: (1) one-third shall vest on November 30, 2023; (2)
one-third shall vest on November, 2024; and (4) one-third shall vest on November, 2025. The Sign-On Award
shall be granted under the Incentive Compensation Plan and will be evidenced by the execution of the Company’s
standard form of award agreement.

The grant of the Sign-On Award will be made (i) within ten days after December 1, 2022 if the Company is not in
a blackout period on December 1, 2022 or (ii) if the Company is in a blackout period on December 1, 2022, within three
trading days after the Company’s next trading window opens.
h. Treatment of Equity Grants from Light & Wonder. Executive currently has the following outstanding equity
awards in connection with his employment at Light & Wonder: 8,492 performance-conditioned RSUs (“L&W
Performance-Conditioned RSUs”) and 11,666 time-vested RSUs (“L&W Time-Vested RSUs”). Executive agrees
that the L&W Performance-Conditioned RSUs are canceled and forfeited as of the Effective Date and
acknowledges that the value of the Sign-On Award reflects the cancellation of the L&W Performance-Conditioned
RSUs. The L&W Time-Vested RSUs will continue to vest as scheduled so long as Executive is employed by the
Company or Light & Wonder.
i.
Taxes and Internal Revenue Code 409A. Payment of all compensation and benefits to Executive under this
Agreement shall be subject to all legally required and customary withholdings. The Company makes no
representations or warranties and shall have no responsibility regarding the tax implications of the compensation
and benefits to be paid to Executive under this Agreement, including under Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”), and applicable administrative guidance and regulations (“Section
409A”). Section 409A governs plans and arrangements that provide “nonqualified deferred compensation” (as
defined under the Code) which may include, among others, nonqualified retirement plans, bonus plans, stock
option plans, employment agreements and severance agreements. The Company reserves the right to pay
compensation and provide benefits under this Agreement (including under Section 3 and Section 4) in amounts, at
times and in a manner that minimizes taxes, interest or penalties as a result of Section 409A. In addition, in the
event any benefits or amounts paid to Executive hereunder are deemed to be subject to Section 409A, Executive
consents to the Company adopting such conforming amendments as the Company deems necessary, in its
reasonable discretion, to comply with Section 409A (including delaying payment until six (6) months following
termination of employment). To the extent any payments of money or other benefits due to Executive hereunder
could cause the application of an accelerated or additional tax under Section 409A, such payments or other
benefits may be deferred if deferral will make such payment or other benefits compliant under Section 409A, or
otherwise such payments or other benefits shall be restructured, to the extent permissible under Section 409A, in a
manner determined by the Company that does not cause such an accelerated or additional tax. To the extent any
reimbursements or in-kind benefits due to Executive under

this Agreement constitute deferred compensation under Section 409A, any such reimbursements or in-kind
benefits shall be paid to Executive in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv). Each
payment made under this Agreement shall be designated as a “separate payment” within the meaning of Section
409A. References in this Section 3(i) to the Company shall also be deemed to refer to the Company’s affiliates
where necessary to give effect to the intentions of this Section 3(i).
4. Termination of Employment. Executive’s employment may be terminated at any time prior to the end of the Term under
the terms described in this Section 4, and the Term shall automatically terminate upon any termination of Executive’s
employment. For purposes of clarification, except as provided in Section 5.6, all stock options, restricted stock units and
other equity-based awards will be governed by the terms of the plans, grant agreements and programs under which such
options, restricted stock units or other awards were granted on any termination of the Term and Executive’s employment
with the Company.
a. Termination by Executive for Other than Good Reason. Executive may terminate Executive’s employment
hereunder for any reason or no reason upon 60 days’ prior written notice to the Company referring to this Section
4(a); provided, however, that a termination by Executive for “Good Reason” (as defined below) shall not
constitute a termination by Executive for other than Good Reason pursuant to this Section 4(a). In the event
Executive terminates Executive’s employment for other than Good Reason, Executive shall be entitled only to the
following compensation and benefits (the payments set forth in Sections 4(a)(i) – 4(a)(iii), collectively, the
“Standard Termination Payments”):
i.
any accrued but unpaid base salary for services rendered by Executive to the date of such termination,
payable in accordance with the Company’s regular payroll practices and subject to such deductions or
amounts to be withheld as required by applicable law and regulations or as may be agreed to by Executive;
ii.
any vested non-forfeitable amounts owing or accrued at the date of such termination under benefit plans,
programs and arrangements set forth or referred to in Section 3(e) in which Executive participated during
the Term (which will be paid under the terms and conditions of such plans, programs, and arrangements
(and agreements and documents thereunder)); and

iii.
reasonable business expenses and disbursements incurred by Executive prior to such termination will be
reimbursed in accordance with Section 3(d).
b. Termination By Reason of Death. If Executive dies during the Term, the last beneficiary designated by Executive
by written notice to the Company (or, in the absence of such designation, Executive’s estate) shall be entitled only
to the Standard Termination Payments, including any benefits that may be payable under any life insurance benefit
of Executive for which the Company pays premiums, in accordance with the terms of any such benefit and subject
to the right of the Company (or its applicable affiliate) to at any time amend or terminate any such benefit.
c. Termination By Reason of Total Disability. The Company may terminate Executive’s employment in the event of
Executive’s “Total Disability.” For purposes of this Agreement, “Total Disability” shall mean Executive’s (1)
becoming eligible to receive benefits under any long-term disability insurance program of the Company or (2)
failure to perform the duties and responsibilities contemplated under this Agreement for a period of more than 180
days during any consecutive 12-month period due to physical or mental incapacity or impairment. In the event that
Executive’s employment is terminated by the Company by reason of Total Disability, Executive shall not be
entitled to receive any compensation or benefits under this Agreement except for the Standard Termination
Payments; provided, however, that the Executive may separately be entitled to disability payments pursuant to a
disability plan sponsored or maintained by the Company or any of its affiliates providing benefits to Executive.
d. Termination by the Company for Cause. The Company may terminate the employment of Executive at any time
for “Cause.” For purposes of this Agreement, “Cause” shall mean: (i) gross neglect by Executive of Executive’s
duties hereunder; (ii) Executive’s indictment for or conviction of a felony, or any non-felony crime or offense
involving the property of the Company or any of its subsidiaries or affiliates or evidencing moral turpitude; (iii)
willful misconduct by Executive in connection with the performance of Executive’s duties hereunder; (iv)
intentional breach by Executive of any material provision of this Agreement; (v) material violation by Executive
of a material provision of SciPlay’s Code of Business Conduct; (vi) Executive’s failure to qualify (or failure to
remain qualified) under any suitability or licensing requirements to which Executive may be subject by reason of
Executive’s position with the Company; (vii) Executive’s failure to cooperate with or respond to any regulatory
requests for information in

connection with such licensing requirements; (viii) Executive’s failure to timely file required license applications;
(ix) the denial of any license application submitted by Executive; or (x) any other willful or grossly negligent
conduct of Executive that would make the continued employment of Executive by the Company materially
prejudicial to the best interests of the Company. In the event Executive’s employment is terminated for “Cause,”
Executive shall not be entitled to receive any compensation or benefits under this Agreement except for the
Standard Termination Payments.
e. Termination by the Company without Cause or by Executive for Good Reason. The Company may terminate
Executive’s employment at any time without Cause, for any reason or no reason, and Executive may terminate
Executive’s employment for “Good Reason.” For purposes of this Agreement “Good Reason” shall mean that,
without Executive’s prior written consent, any of the following shall have occurred: (A) a material adverse change
to Executive’s positions, titles, offices, or duties following the Effective Date from those set forth in Section 2,
except, in such case, in connection with the termination of Executive’s employment for Cause or due to Total
Disability, death or expiration of the Term; (B) a material decrease in base salary provided under this Agreement;
or (C) any other material failure by the Company to perform any material obligation under, or material breach by
the Company of any material provision of, this Agreement; provided, however, that a termination by Executive for
Good Reason under any of clauses (A) through (C) of this Section 4(e) shall not be considered effective unless
Executive shall have provided the Company with written notice of the specific reasons for such termination within
thirty (30) days after Executive has knowledge of the event or circumstance constituting Good Reason and the
Company shall have failed to cure the event or condition allegedly constituting Good Reason within thirty (30)
days after such notice has been given to the Company and Executive actually terminates his employment within
one (1) year following the initial occurrence of the event giving rise to Good Reason. In the event that Executive’s
employment is terminated by the Company without Cause or by Executive for Good Reason (and not, for the
avoidance of doubt, in the event of a termination pursuant to Section 4(a), (b), (c) or (d) or due to or non-renewal
of the Term), the Company shall pay or provide the following amounts to Executive:
i.
the Standard Termination Payments;
ii.
an amount equal to the Executive’s base salary then in effect, payable in equal installments in accordance
with the Company’s normal payroll

practices over a period of twelve (12) months after such termination, and otherwise in accordance with
Section 4(g);
iii.
no later than March 15 following the end of the year in which such termination occurs, in lieu of any
Incentive Compensation for the year in which such termination occurs, payment of an amount equal to (A)
the Incentive Compensation which would have been payable to Executive had Executive remained in
employment with the Company during the entire year in which such termination occurred, multiplied by
(B) a fraction the numerator of which is the number of days Executive was employed in the year in which
such termination occurs and the denominator of which is the total number of days in the year in which such
termination occurs; and
iv.
if Executive elects to continue medical coverage under the Company’s group health plan in accordance
with COBRA, the full monthly premiums for such coverage on a monthly basis until the earlier of: (A) a
period of twelve (12) months has elapsed; or (B) Executive is eligible for medical coverage under a plan
provided by a new employer.
f.
Expiration of Term of Agreement. In the event Executive’s employment is terminated by the Company at the end
of the Term, Executive shall receive:
i.
the Standard Termination Payments;
ii.
an amount equal to the Executive’s base salary then in effect, payable in equal installments in accordance
with the Company’s normal payroll practices over a period of twelve (12) months after such termination,
and otherwise in accordance with Section 4(g); and
iii.
no later than March 15 following the end of the year in which such termination occurs, in lieu of any
Incentive Compensation for the year in which such termination occurs, payment of an amount equal to (A)
the Incentive Compensation which would have been payable to Executive had Executive remained in
employment with the Company during the entire year in which such termination occurred, multiplied by
(B) a fraction the numerator of which is the number of days Executive was employed in the year in which
such termination occurs and the denominator of which is the total number of days in the year in which such
termination occurs; and
iv.
if Executive elects to continue medical coverage under the Company’s group health plan in accordance
with COBRA, the full monthly premiums

for such coverage on a monthly basis until the earlier of: (A) a period of twelve (12) months has elapsed;
or (B) Executive is eligible for medical coverage under a plan provided by a new employer.
g. Timing of Certain Payments under Section 4. For purposes of Section 409A, references herein to the Executive’s
“termination of employment” shall refer to Executive’s separation of services with the Company within the
meaning of Treas. Reg. Section 1.409A-1(h). If at the time of Executive’s separation of service with the Company
other than as a result of Executive’s death, (i) Executive is a “specified employee” (as defined in Section 409A(a)
(2)(B)(i) of the Code), (ii) one or more of the payments or benefits received or to be received by Executive
pursuant to this Agreement would constitute deferred compensation subject to Section 409A, and (iii) the deferral
of the commencement of any such payments or benefits otherwise payable hereunder as a result of such separation
of service is necessary in order to prevent any accelerated or additional tax under Section 409A, such payments
may be made as follows: (i) no payments for a six-month period following the date of Executive’s separation of
service with the Company; (ii) an amount equal to the aggregate sum that would have been otherwise payable
during the initial six-month period paid in a lump sum on the first payroll date following six (6) months following
the date of Executive’s separation of service with the Company (subject to such deductions or amounts to be
withheld as required by applicable law and regulations); and (iii) during the period beginning six (6) months
following Executive’s separation of service with the Company through the remainder of the applicable period,
payment of the remaining amount due in equal installments in accordance with the Company’s standard payroll
practices (subject to such deductions or amounts to be withheld as required by applicable law and regulations).
h. Mitigation. In the event the Executive’s employment is terminated in accordance with Section 4(e) and Executive
is employed by or otherwise engaged to provide services to another person or entity at any time prior to the end of
any period of payments to or on behalf of Executive contemplated by this Section 4, (i) Executive shall
immediately advise the Company of such employment or engagement and any health insurance benefits to which
he is entitled in connection therewith, and (ii) the Company’s obligation to make continued health insurance
payments to or on behalf of Executive shall be reduced by any health insurance coverage obtained by Executive
during the applicable period through such other employment or engagement (without regard to when such
coverage is paid).

i.
Set-Off. To the fullest extent permitted by law and provided an acceleration of income or the imposition of an
additional tax under Section 409A would not result, any amounts otherwise due to Executive hereunder (including
any payments pursuant to this Section 4) shall be subject to set-off with respect to any amounts Executive
otherwise owes the Company or any subsidiary or affiliate thereof.
j.
No Other Benefits or Compensation. Except as may be specifically provided under this Agreement, under any
other effective written agreement between Executive and the Company, or under the terms of any plan or policy
applicable to Executive, Executive shall have no right to receive any other compensation from the Company or
any subsidiary or affiliate thereof, or to participate in any other plan, arrangement or benefit provided by the
Company or any subsidiary or affiliate thereof, with respect to any future period after such termination or
resignation. Executive acknowledges and agrees that Executive is entitled to no compensation or benefits from the
Company or any of its subsidiaries or affiliates of any kind or nature whatsoever in respect of periods prior to the
date of this Agreement.
k. Release of Employment Claims; Compliance with Section 5. Executive agrees, as a condition to receipt of any
termination payments and benefits provided for in this Section 4 (other than the Standard Termination Payments),
that Executive will execute a general release agreement, in a form reasonably satisfactory to the Company,
releasing any and all claims arising out of Executive’s employment and the termination of such employment. The
Company shall provide Executive with the proposed form of general release agreement referred to in the
immediately preceding sentence no later than seven (7) days following the date of termination. Executive shall
thereupon have 21 days or, if required by the Older Workers Benefit Protection Act, 45 days, to consider such
general release agreement and, if he executes such general release agreement, shall have seven (7) days after
execution of such general release agreement to revoke such general release agreement. Absent such revocation,
such general release agreement shall become binding on Executive. If Executive does not revoke such general
release agreement, payments contingent on such general release agreement that constitute deferred compensation
under Section 409A (if any) shall be paid on the later of the 60th day after the date of termination or the date such
payments are otherwise scheduled to be paid pursuant to this Agreement. The Company’s obligation to make any
termination payments and benefits provided for in this Section 4 (other than the Standard Termination Payments)
shall immediately cease if Executive willfully or materially breaches Section 5.1, 5.2, 5.3, 5.4, or 5.8.

l.
Section 280G. If the aggregate of all amounts and benefits due to the Executive under this Agreement or any other
plan, program, agreement or arrangement of the Company or any of its affiliates, which, if received by the
Executive in full, would constitute “parachute payments,” as such term is defined in and under Section 280G of
the Code (collectively, “Change in Control Benefits”), reduced by all Federal, state and local taxes applicable
thereto, including the excise tax imposed pursuant to Section 4999 of the Code, is less than the amount the
Executive would receive, after all such applicable taxes, if the Executive received aggregate Change in Control
Benefits equal to an amount which is $1.00 less than three (3) times the Executive’s “base amount,” as defined in
and determined under Section 280G of the Code, then such Change in Control Benefits shall be reduced or
eliminated to the extent necessary so that the Change in Control Benefits received by the Executive will not
constitute parachute payments. If a reduction in the Change in Control Benefits is necessary, reduction shall occur
in the following order unless the Executive elects in writing a different order, subject to the Company’s consent
(which shall not be unreasonably withheld or delayed): (i) severance payment based on multiple of base salary; (ii)
other cash payments; (iii) any pro-rated bonus paid as severance; (iv) acceleration of vesting of stock options with
an exercise price that exceeds the then fair market value of stock subject to the option, provided such options are
not permitted to be valued under Treasury Regulations Section 1.280G-1 Q/A – 24(c); (v) any equity awards
accelerated or otherwise valued at full value, provided such equity awards are not permitted to be valued under
Treasury Regulations Section 1.280G-1 Q/A – 24(c); (vi) acceleration of vesting of stock options with an exercise
price that exceeds the then fair market value of stock subject to the option, provided such options are permitted to
be valued under Treasury Regulations Section 1.280G-1 Q/A – 24(c); (vii) acceleration of vesting of all other
stock options and equity awards; and (viii) within any category, reductions shall be from the last due payment to
the first.
It is possible that after the determinations and selections made pursuant to the preceding paragraph that the
Executive will receive Change in Control Benefits that are, in the aggregate, either more or less than the amounts contemplated
by the preceding paragraph (hereafter referred to as an “Excess Payment” or “Underpayment,” respectively). If there is an Excess
Payment, the Executive shall promptly repay the Company an amount consistent with this paragraph. If there is an
Underpayment, the Company shall pay the Executive an amount consistent with this paragraph.
5. Noncompetition; Non-solicitation; Nondisclosure; etc.
5.1 Noncompetition; Non-solicitation.

a. Executive acknowledges the highly competitive nature of the Company’s business and that access to the
Company’s confidential records and proprietary information renders Executive special and unique within the
Company’s industries. In addition to the protection of confidential records and proprietary information covered in
Section 5.2, the provisions set forth in this Section 5.1 are necessary in order to protect the goodwill of the
Company and the relationships developed by the Company with employees, customers and suppliers. In
consideration of the amounts that may hereafter be paid to Executive pursuant to this Agreement (including
Sections 3 and 4), Executive agrees that during the Term (including any extensions thereof) and during the
Covered Time, Executive, alone or with others, will not, directly or indirectly, engage (as owner, investor, partner,
stockholder, employer, employee, consultant, advisor, director or otherwise) in any Competing Business. For
purposes of this Section 5, “Competing Business” shall mean any business or operations: (i)(A) involving the
design, development, manufacture, production, sale, lease, license, provision, operation or management (as the
case may be) of (1) gaming machines, terminals or devices (including video or reel spinning slot machines, video
poker machines, video lottery terminals and fixed odds betting terminals), (2) video gaming (including server-
based gaming), sports betting or other wagering or gaming systems, regardless of whether such systems are land-
based, internet-based or mobile (including control and monitoring systems, local or wide-area progressive systems
and redemption systems); (3) real money gaming or social gaming-related proprietary or licensed content
(including themes, entertainment and brands), platforms, websites and loyalty and customer relationship
management programs regardless of whether any of the foregoing are land-based, internet-based or mobile-based;
(4) social casino games or websites or mobile phone or tablet applications (or similar known, or hereafter existing,
technologies) featuring social casino games or any related marketing, distribution, or other services or programs;
(5) interactive casino gaming products or services, including interactive casino-game themed games and platforms
for websites or mobile phone or tablet applications (or similar known, or hereafter existing, technologies); (6)
gaming utility products (including shufflers, card-reading shoes, deck checkers and roulette chip sorters), table
games (including live, simulated, online, social gaming, interactive and electronic) and related products and
services; (7) slot accounting, casino management, casino marketing, player tracking, bingo or similar gaming- or
casino-related systems and related peripheral hardware, software and services; or (8) ancillary products (including
equipment, hardware, software, marketing materials, chairs and signage) or services (including field service,
maintenance and support) related to any of the foregoing under sub-clauses (1) through (8) above; or (B) in which
the Company is then or was within the previous 12 months engaged, or in which the Company, to Executive’s
knowledge, contemplates to

engage in during the Term or the Covered Time; (ii) in which Executive was engaged or involved (whether in an
executive or supervisory capacity or otherwise) on behalf of the Company or with respect to which Executive has
obtained proprietary or confidential information; and (iii) which were conducted anywhere in the United States or
in any other geographic area in which such business was conducted or contemplated to be conducted by the
Company. Notwithstanding anything to the contrary in the foregoing, the holding of up to one percent (1%) of the
outstanding equity in a publicly traded entity for passive investment purposes shall not, in and of itself, be
construed as engaging in a Competing Business.
b. In further consideration of the amounts that may hereafter be paid to Executive pursuant to this Agreement
(including Sections 3 and 4), Executive agrees that, during the Term (including any extensions thereof) and during
the Covered Time, Executive shall not, directly or indirectly: (i) solicit or attempt to induce any of the employees,
agents, consultants or representatives of the Company to terminate his, her, or its relationship with the Company;
(ii) solicit or attempt to induce any of the employees, agents, consultants or representatives of the Company to
become employees, agents, consultants or representatives of any other person or entity; (iii) solicit or attempt to
induce any customer, vendor or distributor of the Company to curtail or cancel any business with the Company; or
(iv) hire any person who, to Executive’s actual knowledge, is, or was within one-hundred and eighty (180) days
prior to such hiring, an employee of the Company.
c. During the Term (including any extensions thereof) and during the Covered Time, Executive agrees that upon the
earlier of Executive’s (i) negotiating with any Competitor (as defined below) concerning the possible employment
of Executive by the Competitor, (ii) responding to (other than for the purpose of declining) an offer of
employment from a Competitor, or (iii) becoming employed by a Competitor, (A) Executive will provide copies of
Section 5 of this Agreement to the Competitor, and (B) in the case of any circumstance described in clause (iii) of
this section occurring during the Covered Time, and in the case of any circumstance described in clauses (i) or (ii)
of this section occurring during the Term or during the Covered Time, Executive will promptly provide notice to
the Company of such circumstances. Executive further agrees that the Company may provide notice to a
Competitor of Executive’s obligations under this Agreement. For purposes of this Agreement, “Competitor” shall
mean any person or entity (other than the Company, its subsidiaries or affiliates) that engages, directly or
indirectly, in the United States or any other geographic area in any Competing Business.

d. Executive understands that the restrictions in this Section 5.1 may limit Executive’s ability to earn a livelihood in a
business similar to the business of the Company but nevertheless agrees and acknowledges that the consideration
provided under this Agreement (including Sections 3 and 4) is sufficient to justify such restrictions. In
consideration thereof and in light of Executive’s education, skills and abilities, Executive agrees that Executive
will not assert in any forum that such restrictions prevent Executive from earning a living or otherwise should be
held void or unenforceable.
e. For purposes of this Section 5.1, “Covered Time” shall mean the period beginning on the date of termination of
Executive’s employment and ending twelve (12) months thereafter.
f.
In the event that a court of competent jurisdiction or arbitrator(s), as the case may be, determine that the provisions
of this Section 5.1 are unenforceable for any reason, the parties acknowledge and agree that the court or
arbitrator(s) is expressly empowered to reform any provision of this Section so as to make them enforceable as
described in Section 10 below.
5.2 Proprietary Information; Inventions.
a. Executive acknowledges that, during the course of Executive’s employment with the Company, Executive
necessarily will have (and during any employment by, or affiliation with, the Company prior to the Term has had)
access to and make use of proprietary information and confidential records of the Company. Executive covenants
that Executive shall not during the Term or at any time thereafter, directly or indirectly, use for Executive’s own
purpose or for the benefit of any person or entity other than the Company, nor otherwise disclose to any person or
entity, any such proprietary information, unless and to the extent such disclosure has been authorized in writing by
the Company or is otherwise required by law. The term “proprietary information” means: (i) the software
products, programs, applications, and processes utilized by the Company; (ii) the name and/or address of any
customer or vendor of the Company or any information concerning the transactions or relations of any customer or
vendor of the Company with the Company; (iii) any information concerning any product, technology, or procedure
employed by the Company but not generally known to its customers or vendors or competitors, or under
development by or being tested by the Company but not at the time offered generally to customers or vendors; (iv)
any information relating to the Company’s computer software, computer systems, pricing or marketing methods,
sales margins, cost of goods, cost of material, capital structure, operating results, borrowing arrangements or
business plans; (v) any information

identified as confidential or proprietary in any line of business engaged in by the Company; (vi) any information
that, to Executive’s actual knowledge, the Company ordinarily maintains as confidential or proprietary; (vii) any
business plans, budgets, advertising or marketing plans; (viii) any information contained in any of the Company’s
written or oral policies and procedures or manuals; (ix) any information belonging to customers, vendors or any
other person or entity which the Company, to Executive’s actual knowledge, has agreed to hold in confidence; and
(x) all written, graphic, electronic data and other material containing any of the foregoing. Executive
acknowledges that information that is not novel or copyrighted or patented may nonetheless be proprietary
information. The term “proprietary information” shall not include information generally known or available to the
public, information that becomes available to Executive on an unrestricted, non-confidential basis from a source
other than the Company or any of its directors, officers, employees, agents or other representatives (without breach
of any obligation of confidentiality of which Executive has knowledge, after reasonable inquiry, at the time of the
relevant disclosure by Executive), or general land-based gaming, internet-based or mobile wagering or social
gaming industry information to the extent not particularly related or proprietary to the Company that was already
known to Executive at the time Executive commences his employment by the Company that is not subject to
nondisclosure by virtue of Executive’s prior employment or otherwise. Notwithstanding the foregoing and Section
5.3, Executive may disclose or use proprietary information or confidential records solely to the extent (A) such
disclosure or use may be required or appropriate in the performance of his duties as a director or employee of the
Company, (B) required to do so by a court of law, by any governmental agency having supervisory authority over
the business of the Company or by any administrative or legislative body (including a committee thereof) with
apparent jurisdiction to order him to divulge, disclose or make accessible such information (provided that in such
case Executive shall first give the Company prompt written notice of any such legal requirement, disclose no more
information than is so required and cooperate fully with all efforts by the Company to obtain a protective order or
similar confidentiality treatment for such information), (C) such information or records becomes generally known
to the public without his violation of this Agreement, or (D) disclosed to Executive’s spouse, attorney and/or his
personal tax and financial advisors to the extent reasonably necessary to advance Executive’s tax, financial and
other personal planning (each an “Exempt Person”); provided, however, that any disclosure or use of any
proprietary information or confidential records by an Exempt Person shall be deemed to be a breach of this
Section 5.2 or Section 5.3 by Executive.

b. Executive agrees that all processes, technologies and inventions (collectively, “Inventions”), including new
contributions, improvements, ideas and discoveries, whether patentable or not, conceived, developed, invented or
made by Executive during the Term (and during any employment by, or affiliation with, the Company prior to the
Term) shall belong to the Company, provided that such Inventions grew out of Executive’s work with the
Company or any of its subsidiaries or affiliates, are related in any manner to the business (commercial or
experimental) of the Company or any of its subsidiaries or affiliates or are conceived or made on the Company’s
time or with the use of the Company’s facilities or materials. Executive shall further: (i) promptly disclose such
Inventions to the Company; (ii) assign to the Company, without additional compensation, all patent and other
rights to such Inventions for the United States and foreign countries; (iii) sign all papers necessary to carry out the
foregoing; and (iv) give testimony in support of Executive’s inventorship. If any Invention is described in a patent
application or is disclosed to third parties, directly or indirectly, by Executive within two (2) years after the
termination of Executive’s employment with the Company, it is to be presumed that the Invention was conceived
or made during the Term. Executive agrees that Executive will not assert any rights to any Invention as having
been made or acquired by Executive prior to the date of this Agreement, except for Inventions, if any, disclosed in
Exhibit A to this Agreement.
5.3 Confidentiality and Surrender of Records. Executive shall not, during the Term or at any time thereafter (irrespective
of the circumstances under which Executive’s employment by the Company terminates), except to the extent required by
law, directly or indirectly publish, make known or in any fashion disclose any confidential records to, or permit any
inspection or copying of confidential records by, any person or entity other than in the course of such person’s or entity’s
employment or retention by the Company, nor shall Executive retain, and will deliver promptly to the Company, any of
the same following termination of Executive’s employment hereunder for any reason or upon request by the Company.
For purposes hereof, “confidential records” means those portions of correspondence, memoranda, files, manuals, books,
lists, financial, operating or marketing records, magnetic tape, or electronic or other media or equipment of any kind in
Executive’s possession or under Executive’s control or accessible to Executive which contain any proprietary information.
All confidential records shall be and remain the sole property of the Company during the Term and thereafter.
Notwithstanding anything herein to the contrary, nothing in this Agreement shall (i) prohibit Executive from making
reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions
of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of
2002, or of any other whistleblower protection provisions of state or federal law or regulation, or

(ii) require notification or prior approval by the Company of any reporting described in clause (i). Executive understands that
activities protected by Sections 5.2 and 5.3 may include disclosure of trade secret or confidential information within the
limitations permitted by the Defend Trade Secrets Act (“DTSA”). And, in this regard, Executive acknowledges notification that
under the DTSA no individual will be held criminally or civilly liable under Federal or State trade secret law for disclosure of a
trade secret (as defined in the Economic Espionage Act) that is: (A) made in confidence to a Federal, State, or local government
official, either directly or indirectly, or to an attorney, and made solely for the purpose of reporting or investigating a suspected
violation of law; or (B) made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under
seal so that it is not made public. And, an individual who pursues a lawsuit for retaliation by an employer for reporting a
suspected violation of the law may disclose the trade secret to the attorney of the individual and use the trade secret information
in the court proceeding, if the individual files any document containing the trade secret under seal, and does not disclose the trade
secret, except as permitted by court order.
5.4 Non-disparagement. Executive shall not, during the Term and thereafter, disparage in any material respect the
Company, any affiliate of the Company, any of their respective businesses, any of their respective officers, directors or
employees, or the reputation of any of the foregoing persons or entities. Notwithstanding the foregoing, nothing in this
Agreement shall preclude Executive from making truthful statements that are required by applicable law, regulation or
legal process.
5.5 No Other Obligations. Executive represents that Executive is not precluded or limited in Executive’s ability to
undertake or perform the duties described herein by any contract, agreement or restrictive covenant. Executive covenants
that Executive shall not employ the trade secrets or proprietary information of any other person in connection with
Executive’s employment by the Company without such person’s authorization.
5.6 Forfeiture of Outstanding Equity Awards; “Clawback” Policies. The other provisions of this Agreement
notwithstanding, if Executive willfully and materially fails to comply with Section 5.1, 5.2, 5.3, 5.4, or 5.8, all options to
purchase common stock, restricted stock units and other equity-based awards granted by the Company or any of its
affiliates (whether prior to, contemporaneous with, or subsequent to the date hereof) and held by Executive or a transferee
of Executive shall be immediately forfeited and cancelled. Executive acknowledges and agrees that, notwithstanding
anything contained in this Agreement or any other agreement, plan or program, any incentive-based compensation or
benefits contemplated under this Agreement (including incentive compensation and equity-based awards) shall be subject
to recovery by the Company under any compensation recovery or “clawback” policy, generally applicable to senior
executives of the Company, that the Company may adopt from time to time, including any policy

which the Company may be required to adopt under Section 954 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act and the rules and regulations of the Securities and Exchange Commission thereunder or the requirements
of any national securities exchange on which the Company’s common stock may be listed.
5.7 Enforcement. Executive acknowledges and agrees that, by virtue of Executive’s position, services and access to and
use of confidential records and proprietary information, any violation by Executive of any of the undertakings contained
in this Section 5 would cause the Company immediate, substantial and irreparable injury for which it has no adequate
remedy at law. Accordingly, Executive agrees and consents to the entry of an injunction or other equitable relief by a
court of competent jurisdiction restraining any violation or threatened violation of any undertaking contained in this
Section 5. Executive waives posting of any bond otherwise necessary to secure such injunction or other equitable relief.
Rights and remedies provided for in this Section 5 are cumulative and shall be in addition to rights and remedies
otherwise available to the parties hereunder or under any other agreement or applicable law.
5.8 Cooperation with Regard to Litigation. Executive agrees to cooperate reasonably with the Company, during the Term
and thereafter (including following Executive’s termination of employment for any reason), by providing information to
the Company regarding matters related to his term of employment and by being available to testify on behalf of the
Company in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative. In addition, except to
the extent that Executive has or intends to assert in good faith an interest or position adverse to or inconsistent with the
interest or position of the Company, Executive agrees to cooperate reasonably with the Company, during the Term and
thereafter (including following Executive’s termination of employment for any reason), to assist the Company in any such
action, suit, or proceeding by providing information and meeting and consulting with the Board or its representatives or
counsel, or representatives or counsel to the Company, in each case, as reasonably requested by the Company. The
Company agrees to pay (or reimburse, if already paid by Executive) all reasonable travel and communication expenses
actually incurred in connection with Executive’s cooperation and assistance.
5.9 Survival. The provisions of this Section 5 shall survive the termination of the Term and any termination or expiration
of this Agreement.
5.10 Company. For purposes of this Section 5, references to the “Company” shall include the Company and each
subsidiary and/or affiliate of the Company (and each of their respective joint ventures and equity method investees).

6.     Code of Conduct. Executive acknowledges that Executive has read the Company’s Code of Business Conduct and agrees to
abide by such Code of Business Conduct, as amended or supplemented from time to time, and other policies applicable to
employees and executives of the Company.
7.     Indemnification. The Company shall indemnify Executive to the full extent permitted under the Company’s Certificate of
Incorporation or By-Laws and pursuant to any other agreements or policies in effect from time to time in connection with any
action, suit or proceeding to which Executive may be made a party by reason of Executive being an officer, director or employee
of the Company or of any subsidiary or affiliate of the Company.
8.         Assignability; Binding Effect. Neither this Agreement nor the rights or obligations hereunder of the parties shall be
transferable or assignable by Executive, except in accordance with the laws of descent and distribution and as specified below.
The Company may assign this Agreement and the Company’s rights and obligations hereunder to any affiliate of the Company,
provided that upon any such assignment the Company shall remain liable for the obligations to Executive hereunder. This
Agreement shall be binding upon and inure to the benefit of Executive, Executive’s heirs, executors, administrators, and
beneficiaries, and shall be binding upon and inure to the benefit of the Company and its successors and assigns.
9.     Complete Understanding; Amendment; Waiver. This Agreement constitutes the complete understanding between the parties
with respect to the employment of Executive and supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof, including superseding any entitlements to benefits or payments
pursuant to any severance plan, policy, practice or arrangement maintained by the Company or any affiliate thereof as of the
Effective Date, and no statement, representation, warranty or covenant has been made by either party with respect thereto except
as expressly set forth herein. Except as contemplated by Sections 3(i), 5.1(f) and 10, this Agreement shall not be modified,
amended or terminated except by a written instrument signed by each of the parties. Any waiver of any term or provision hereof,
or of the application of any such term or provision to any circumstances, shall be in writing signed by the party charged with
giving such waiver. Waiver by either party of any breach hereunder by the other party shall not operate as a waiver of any other
breach, whether similar to or different from the breach waived. No delay by either party in the exercise of any rights or remedies
shall operate as a waiver thereof, and no single or partial exercise by either party of any such right or remedy shall preclude other
or further exercise thereof.
10.     Severability. If any provision of this Agreement or the application of any such provision to any person or circumstances
shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this
Agreement, or the application of such provision to such person or circumstances other than those to which it is so determined to

be invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be enforced to the fullest extent
permitted by law. If any provision of this Agreement, or any part thereof, is held to be invalid or unenforceable because of the
scope or duration of or the area covered by such provision, the parties agree that the court making such determination shall
reduce the scope, duration and/or area of such provision (and shall substitute appropriate provisions for any such invalid or
unenforceable provisions) in order to make such provision enforceable to the fullest extent permitted by law and/or shall delete
specific words and phrases, and such modified provision shall then be enforceable and shall be enforced. The parties recognize
that if, in any judicial proceeding, a court shall refuse to enforce any of the separate covenants contained in this Agreement, then
that invalid or unenforceable covenant contained in this Agreement shall be deemed eliminated from these provisions to the
extent necessary to permit the remaining separate covenants to be enforced. In the event that any court determines that the time
period or the area, or both, are unreasonable and that any of the covenants is to that extent invalid or unenforceable, the parties
agree that such covenants will remain in full force and effect, first, for the greatest time period, and second, in the greatest
geographical area that would not render them unenforceable.
11.     Survivability. The provisions of this Agreement which by their terms call for performance subsequent to termination of
Executive’s employment hereunder, or of this Agreement, shall so survive such termination, whether or not such provisions
expressly state that they shall so survive.
12.     Governing Law; Arbitration.
a. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada
applicable to agreements made and to be wholly performed within that State, without regard to its conflict of laws
provisions.
b. Arbitration.
i.
Executive and the Company agree that, except for claims for workers’ compensation, unemployment
compensation, and any other claim that is non-arbitrable under applicable law, final and binding arbitration shall
be the exclusive forum for any dispute or controversy between them, including, without limitation, disputes arising
under or in connection with this Agreement, Executive’s employment, and/or termination of employment, with the
Company; provided, however, that the Company shall be entitled to commence an action in any court of
competent jurisdiction for injunctive relief in connection with any alleged actual or threatened violation of any
provision of Section 5. Judgment may be entered on the arbitrators’ award in any court having jurisdiction. For
purposes of entering such judgment or seeking injunctive relief with regard to Section 5, the

Company and Executive hereby consent to the jurisdiction of any state or federal court of competent jurisdiction
located in Las Vegas, Nevada; provided that damages for any alleged violation of Section 5, as well as any claim,
counterclaim or cross-claim brought by Executive or any third-party in response to, or in connection with, any
court action commenced by the Company seeking said injunctive relief shall remain exclusively subject to final
and binding arbitration as provided for herein. The Company and Executive hereby waive, to the fullest extent
permitted by applicable law, any objection which either may now or hereafter have to such jurisdiction, venue and
any defense of inconvenient forum. Thus, except for the claims carved out above, this Agreement includes all
common-law and statutory claims (whether arising under federal state or local law), including any claim for
breach of contract, fraud, fraud in the inducement, unpaid wages, wrongful termination, and gender, age, national
origin, sexual orientation, marital status, disability, or any other protected status.
ii.
Any arbitration under this Agreement shall be filed exclusively with, and administered by, the American
Arbitration Association in Las Vegas, Nevada before three arbitrators, in accordance with the National Rules for
the Resolution of Employment Disputes of the American Arbitration Association in effect at the time of
submission to arbitration. The Company and Executive hereby agree that a judgment upon an award rendered by
the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by
law. The Company shall pay all costs uniquely attributable to arbitration, including the administrative fees and
costs of the arbitrators. Each party shall pay that party’s own costs and attorney fees, if any, unless the arbitrators
rule otherwise. Executive understands that Executive is giving up no substantive rights, and this Agreement
simply governs forum. The arbitrators shall apply the same standards a court would apply to award any damages,
attorney fees or costs. Executive shall not be required to pay any fee or cost that Executive would not otherwise be
required to pay in a court action, unless so ordered by the arbitrators.
EXECUTIVE INITIALS: /s/ JB COMPANY INITIALS: /s/ JW
c. WAIVER OF JURY TRIAL. BY SIGNING THIS AGREEMENT, EXECUTIVE AND THE COMPANY
ACKNOWLEDGE THAT THE RIGHT TO A COURT TRIAL AND TRIAL BY JURY IS OF VALUE, AND
KNOWINGLY AND VOLUNTARILY WAIVE THAT RIGHT FOR ANY DISPUTE SUBJECT TO THE TERMS
OF THIS ARBITRATION PROVISION.

13.     Titles and Captions. All paragraph titles or captions in this Agreement are for convenience only and in no way define, limit,
extend or describe the scope or intent of any provision hereof.
14.     Joint Drafting. In recognition of the fact that the parties had an equal opportunity to negotiate the language of, and draft,
this Agreement, the parties acknowledge and agree that there is no single drafter of this Agreement and, therefore, the general
rule that ambiguities are to be construed against the drafter is, and shall be, inapplicable. If any language in this Agreement is
found or claimed to be ambiguous, each party shall have the same opportunity to present evidence as to the actual intent of the
parties with respect to any such ambiguous language without any inference or presumption being drawn against any party hereto.
15.     Notices. All notices and other communications to be given or to otherwise be made to any party to this Agreement shall be
deemed to be sufficient if contained in a written instrument delivered in person or duly sent by certified mail or by a recognized
national courier service, postage or charges prepaid, (a) to SciPlay Corporation, Attn: Legal Department, 6601 Bermuda Road,
Las Vegas NV 89119, (b) to Executive, at the last address shown in the Company’s records, or (c) to such other replacement
address as may be designated in writing by the addressee to the addressor.
16.     Licensing Requirements. Executive may be required to submit to background, suitability and licensing investigations
conducted by multiple regulators. Executive agrees to fully cooperate with both the Company and any regulators by furnishing all
requested information, including personal information regarding Executive and Executive’s family members, and documentation
during the regulatory process. Executive agrees to fully cooperate with and conform to all regulatory requests for information in
the required timeframe. Compliance with this requirement is a material provision of this Agreement.
17.     Interpretation. When a reference is made in this Agreement to a Section, such reference shall be to a Section of this
Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement,
they shall be deemed to be followed by the words “without limitation,” unless the context otherwise indicates. When a reference
in this Agreement is made to a “party” or “parties,” such reference shall be to a party or parties to this Agreement unless
otherwise indicated or the context requires otherwise. Unless the context requires otherwise, the terms “hereof,” “herein,”
“hereby,” “hereto”, “hereunder” and derivative or similar words in this Agreement refer to this entire Agreement. Unless the
context requires otherwise, words in this Agreement using the singular or plural number also include the plural or singular
number, respectively, and the use of any gender herein shall be deemed to include the other genders. References in this
Agreement to “dollars” or “$” are to U.S. dollars. When a reference is made in this Agreement to a law, statute or legislation,
such reference shall be to such law, statute or legislation as it may be amended, modified, extended or re-enacted

from time to time (including any successor law, statute or legislation) and shall include any regulations promulgated thereunder
from time to time. The headings used herein are for reference only and shall not affect the construction of this Agreement.
[remainder of page intentionally left blank]

IN WITNESS WHEREOF, each of the parties has duly executed this Agreement as of the date above written.
SCIPLAY PARENT COMPANY, LLC
By: /s/ Josh Wilson
EXECUTIVE
/s/ James Bombassei
JAMES BOMBASSEI

Exhibit A
Inventions

Exhibit 21.1
SCIPLAY CORPORATION SUBSIDIARIES
December 31, 2022
Alictus Yazilim Anonim Sirketi (Turkey)
Come2Play Ltd (Israel)
Dragonplay Ltd (Israel)
Koukoi Games Oy (Finland)
SciPlay Games, LLC (Nevada)
SciPlay Parent Company, LLC (Nevada) (18% economic interest; SciPlay is sole manager)

Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in Registration Statement Nos. 333-231225, 333-249936 and 333-263232 on Form
S-8 of our report dated March 1, 2023, relating to the financial statements of SciPlay Corporation appearing in this Annual
Report on Form 10-K for the year ended December 31, 2022.
/s/ Deloitte & Touche LLP
Las Vegas, Nevada
March 1, 2023

Exhibit 31.1
Certification by Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Joshua J. Wilson, certify that:
1.   I have reviewed this Annual Report on Form 10-K of SciPlay Corporation;
2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;
b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: March 1, 2023
/s/ Joshua J. Wilson
Joshua J. Wilson
Chief Executive Officer

Exhibit 31.2
Certification by Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Daniel O'Quinn, certify that:
1.   I have reviewed this Annual Report on Form 10-K of SciPlay Corporation;
2.   Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3.   Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.   The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which this report is being prepared;
b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
c)   Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)   Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely
to materially affect, the registrant’s internal control over financial reporting; and
5.   The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: March 1, 2023
/s/ Daniel O'Quinn
Daniel O'Quinn
Interim Chief Financial Officer

Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
    In connection with the Annual Report of SciPlay Corporation (the “Company”) on Form 10-K for the period ended December 31, 2022 as filed with the
Securities and Exchange Commission on the date hereof (the “Report”), I, Joshua J. Wilson, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1)                                 The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)                                 The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
    A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and
furnished to the Securities and Exchange Commission or its staff upon request.
/s/ Joshua J. Wilson
Joshua J. Wilson
Chief Executive Officer
March 1, 2023

Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
    In connection with the Annual Report of SciPlay Corporation (the “Company”) on Form 10-K for the period ended December 31, 2022 as filed with the
Securities and Exchange Commission on the date hereof (the “Report”), I, Daniel O'Quinn, Interim Chief Financial Officer of the Company, certify,
pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley-Act of 2002, that, to my knowledge:
(1)                                 The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)                                 The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the
Company.
    A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and
furnished to the Securities and Exchange Commission or its staff upon request.
/s/ Daniel O'Quinn
Daniel O'Quinn
Interim Chief Financial Officer
March 1, 2023