false--12-31FY20190001619762P1YP1Y0.102042107312044353330.02050.035000.04750.053500.0550.06250.06250.065000.023750.035000.035000.04750.04750.053500.0550.06250.06250.065001.011111.011111111.0111111.01111.0111.011111.011111.01111P14YP15YP20YP14YP17YP20YP3YP3YP6YP5YP4YP3YP5YP3YP3YP4YP1Y000 0001619762 2019-01-01 2019-12-31 0001619762 dei:BusinessContactMember 2019-01-01 2019-12-31 0001619762 2019-12-31 0001619762 2018-12-31 0001619762 2017-01-01 2017-12-31 0001619762 2018-01-01 2018-12-31 0001619762 us-gaap:ProductMember 2019-01-01 2019-12-31 0001619762 us-gaap:ProductMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceMember 2019-01-01 2019-12-31 0001619762 us-gaap:ProductMember 2017-01-01 2017-12-31 0001619762 us-gaap:ServiceMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceMember 2017-01-01 2017-12-31 0001619762 2016-12-31 0001619762 2017-12-31 0001619762 us-gaap:RetainedEarningsMember 2019-01-01 2019-12-31 0001619762 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-12-31 0001619762 us-gaap:AdditionalPaidInCapitalMember 2017-01-01 2017-12-31 0001619762 us-gaap:NoncontrollingInterestMember 2018-12-31 0001619762 us-gaap:ParentMember 2019-12-31 0001619762 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001619762 us-gaap:NoncontrollingInterestMember 2017-01-01 2017-12-31 0001619762 us-gaap:ParentMember 2017-01-01 2017-12-31 0001619762 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-12-31 0001619762 us-gaap:NoncontrollingInterestMember 2018-01-01 2018-12-31 0001619762 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-01-01 2017-12-31 0001619762 us-gaap:RetainedEarningsMember 2017-01-01 2017-12-31 0001619762 us-gaap:ParentMember 2019-01-01 2019-12-31 0001619762 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-12-31 0001619762 us-gaap:ParentMember 2018-01-01 2018-12-31 0001619762 us-gaap:CommonStockMember 2017-01-01 2017-12-31 0001619762 us-gaap:RetainedEarningsMember 2016-12-31 0001619762 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0001619762 us-gaap:ParentMember 2017-12-31 0001619762 us-gaap:ParentMember 2016-12-31 0001619762 us-gaap:RetainedEarningsMember 2018-01-01 0001619762 us-gaap:CommonStockMember 2018-01-01 2018-12-31 0001619762 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001619762 us-gaap:RetainedEarningsMember 2019-12-31 0001619762 us-gaap:ParentMember 2018-01-01 0001619762 us-gaap:RetainedEarningsMember 2018-01-01 2018-12-31 0001619762 us-gaap:AdditionalPaidInCapitalMember 2016-12-31 0001619762 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-12-31 0001619762 us-gaap:CommonStockMember 2019-01-01 2019-12-31 0001619762 us-gaap:RetainedEarningsMember 2017-12-31 0001619762 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-12-31 0001619762 us-gaap:CommonStockMember 2017-12-31 0001619762 us-gaap:CommonStockMember 2016-12-31 0001619762 us-gaap:RetainedEarningsMember 2018-12-31 0001619762 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001619762 us-gaap:CommonStockMember 2019-12-31 0001619762 us-gaap:CommonStockMember 2018-12-31 0001619762 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2016-12-31 0001619762 us-gaap:ParentMember 2018-12-31 0001619762 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001619762 us-gaap:NoncontrollingInterestMember 2019-12-31 0001619762 us-gaap:NoncontrollingInterestMember 2016-12-31 0001619762 us-gaap:NoncontrollingInterestMember 2017-12-31 0001619762 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0001619762 2018-01-01 0001619762 srt:MaximumMember igt:ContractAssetsMember igt:FurnitureAndEquipmentMember 2019-01-01 2019-12-31 0001619762 us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 0001619762 igt:ContractAssetsMember igt:TerminalsComputersAndCommunicationsEquipmentMember 2019-01-01 2019-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember us-gaap:BuildingMember 2019-01-01 2019-12-31 0001619762 srt:MaximumMember igt:DevelopedPropertyandOtherCustomerAssetsMember igt:CustomerPortfolioSegmentMember igt:NotesDevelopmentFinancingLoansMember 2019-01-01 2019-12-31 0001619762 srt:MaximumMember us-gaap:PropertyPlantAndEquipmentMember igt:ContractAssetsCommercialGamingMachinesMember 2019-01-01 2019-12-31 0001619762 igt:CustomerPortfolioSegmentMember 2019-01-01 2019-12-31 0001619762 srt:MaximumMember igt:RelatedProductsSoldMember igt:CustomerPortfolioSegmentMember igt:ContractsExtendedPaymentTermsMember 2019-01-01 2019-12-31 0001619762 us-gaap:ContractualRightsMember 2019-01-01 2019-12-31 0001619762 srt:MinimumMember igt:ConcessionsAndLicensesIntangibleAssetsMember 2019-01-01 2019-12-31 0001619762 srt:MaximumMember igt:ComputerSoftwareAndGameLibraryIntangibleAssetMember 2019-01-01 2019-12-31 0001619762 srt:MinimumMember us-gaap:TrademarksMember 2019-01-01 2019-12-31 0001619762 srt:MinimumMember us-gaap:DevelopedTechnologyRightsMember 2019-01-01 2019-12-31 0001619762 srt:MinimumMember us-gaap:CustomerRelationshipsMember 2019-01-01 2019-12-31 0001619762 srt:MinimumMember us-gaap:OtherIntangibleAssetsMember 2019-01-01 2019-12-31 0001619762 srt:MaximumMember igt:ConcessionsAndLicensesIntangibleAssetsMember 2019-01-01 2019-12-31 0001619762 srt:MaximumMember us-gaap:OtherIntangibleAssetsMember 2019-01-01 2019-12-31 0001619762 srt:MaximumMember us-gaap:TrademarksMember 2019-01-01 2019-12-31 0001619762 srt:MaximumMember us-gaap:CustomerRelationshipsMember 2019-01-01 2019-12-31 0001619762 srt:MaximumMember us-gaap:DevelopedTechnologyRightsMember 2019-01-01 2019-12-31 0001619762 srt:MinimumMember igt:ComputerSoftwareAndGameLibraryIntangibleAssetMember 2019-01-01 2019-12-31 0001619762 srt:MinimumMember us-gaap:PropertyPlantAndEquipmentMember igt:ContractAssetsCommercialGamingMachinesMember 2019-01-01 2019-12-31 0001619762 srt:MinimumMember igt:RelatedProductsSoldMember igt:CustomerPortfolioSegmentMember igt:ContractsExtendedPaymentTermsMember 2019-01-01 2019-12-31 0001619762 srt:MinimumMember igt:ContractAssetsMember igt:FurnitureAndEquipmentMember 2019-01-01 2019-12-31 0001619762 srt:MinimumMember igt:DevelopedPropertyandOtherCustomerAssetsMember igt:CustomerPortfolioSegmentMember igt:NotesDevelopmentFinancingLoansMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceOtherMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 igt:SystemsandOtherMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceOtherMember 2018-01-01 2018-12-31 0001619762 igt:GamingMachineMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceOtherMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 igt:GamingMachineMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 igt:SystemsandOtherMember 2018-01-01 2018-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-12-31 0001619762 igt:LotterymanagementagreementsMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 us-gaap:ProductMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 igt:LotterymanagementagreementsMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 igt:LotteryMachineMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-12-31 0001619762 igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 igt:LotteryMachineMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 igt:LotterymanagementagreementsMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-12-31 0001619762 igt:SystemsandOtherMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 igt:MachineGamingMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 igt:LotteryMachineMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 igt:LotteryMachineMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 igt:SystemsandOtherMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 igt:MachineGamingMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-12-31 0001619762 igt:LotteryMachineMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceOtherMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-12-31 0001619762 us-gaap:ProductMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember 2018-01-01 2018-12-31 0001619762 igt:LotterymanagementagreementsMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 igt:LotterymanagementagreementsMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 igt:GamingMachineMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 us-gaap:ProductMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 igt:SystemsandOtherMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-12-31 0001619762 igt:GamingMachineMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 igt:InternationalMember 2018-01-01 2018-12-31 0001619762 igt:GamingMachineMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 igt:MachineGamingMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 igt:MachineGamingMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceOtherMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 us-gaap:AllOtherSegmentsMember 2018-01-01 2018-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 igt:LotterymanagementagreementsMember 2018-01-01 2018-12-31 0001619762 igt:LotteryMachineMember 2018-01-01 2018-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 us-gaap:ProductMember us-gaap:AllOtherSegmentsMember 2018-01-01 2018-12-31 0001619762 us-gaap:ProductMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 igt:SystemsandOtherMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceOtherMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 igt:MachineGamingMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 us-gaap:ServiceMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 igt:GamingMachineMember 2018-01-01 2018-12-31 0001619762 igt:MachineGamingMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 2020-01-01 2019-12-31 0001619762 2021-01-01 2019-12-31 0001619762 igt:GamingMachineMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 igt:SystemsandOtherMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 igt:GamingMachineMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 igt:MachineGamingMember 2019-01-01 2019-12-31 0001619762 igt:LotteryMachineMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 igt:SystemsandOtherMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 igt:LotterymanagementagreementsMember 2019-01-01 2019-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 igt:MachineGamingMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceOtherMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 igt:SystemsandOtherMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 igt:LotteryMachineMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 igt:GamingMachineMember 2019-01-01 2019-12-31 0001619762 igt:LotteryMachineMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceOtherMember 2019-01-01 2019-12-31 0001619762 igt:GamingMachineMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 igt:LotterymanagementagreementsMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceOtherMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 igt:MachineGamingMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-12-31 0001619762 igt:InternationalMember 2019-01-01 2019-12-31 0001619762 us-gaap:ProductMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-12-31 0001619762 us-gaap:ProductMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 igt:LotterymanagementagreementsMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 igt:GamingMachineMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 igt:LotteryMachineMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 igt:MachineGamingMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 us-gaap:AllOtherSegmentsMember 2019-01-01 2019-12-31 0001619762 us-gaap:ProductMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 us-gaap:ProductMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceOtherMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-12-31 0001619762 igt:LotterymanagementagreementsMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 igt:LotteryMachineMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 igt:GamingMachineMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-12-31 0001619762 igt:LotterymanagementagreementsMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-12-31 0001619762 igt:MachineGamingMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceOtherMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 igt:OperatingandFacilitiesManagementContractsMember 2019-01-01 2019-12-31 0001619762 us-gaap:ProductMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 igt:SystemsandOtherMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 igt:MachineGamingMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 igt:LotterymanagementagreementsMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 igt:SystemsandOtherMember us-gaap:AllOtherSegmentsMember 2019-01-01 2019-12-31 0001619762 us-gaap:ServiceOtherMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 igt:LotteryMachineMember 2019-01-01 2019-12-31 0001619762 igt:SystemsandOtherMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 us-gaap:OtherCurrentLiabilitiesMember 2018-12-31 0001619762 us-gaap:OtherNoncurrentAssetsMember 2018-12-31 0001619762 us-gaap:OtherCurrentAssetsMember 2018-12-31 0001619762 us-gaap:OtherCurrentLiabilitiesMember 2019-12-31 0001619762 us-gaap:OtherNoncurrentAssetsMember 2019-12-31 0001619762 us-gaap:OtherCurrentAssetsMember 2019-12-31 0001619762 us-gaap:OtherNoncurrentLiabilitiesMember 2018-12-31 0001619762 us-gaap:OtherNoncurrentLiabilitiesMember 2019-12-31 0001619762 2019-05-01 2019-05-31 0001619762 igt:CustomerPortfolioSegmentMember 2017-12-31 0001619762 igt:CustomerPortfolioSegmentMember 2018-01-01 2018-12-31 0001619762 igt:CustomerPortfolioSegmentMember 2018-12-31 0001619762 igt:CustomerPortfolioSegmentMember 2017-01-01 2017-12-31 0001619762 igt:CustomerPortfolioSegmentMember 2019-12-31 0001619762 igt:CustomerPortfolioSegmentMember 2016-12-31 0001619762 igt:IndianaLicenseFeesMember 2019-01-01 2019-12-31 0001619762 igt:LottoitaliaLicenseFeeMember 2019-01-01 2019-12-31 0001619762 igt:ScratchAndWinConcessionsExtensionsMember 2019-01-01 2019-12-31 0001619762 igt:NorthstarNewJerseyLotteryMember 2019-01-01 2019-12-31 0001619762 igt:NorthstarNewJerseyLotteryMember 2019-12-31 0001619762 igt:IndianaLicenseFeesMember 2018-12-31 0001619762 igt:LottoitaliaLicenseFeeMember 2018-12-31 0001619762 igt:ScratchAndWinConcessionsMember 2019-12-31 0001619762 igt:ScratchAndWinConcessionsMember 2018-12-31 0001619762 igt:LottoitaliaLicenseFeeMember 2019-12-31 0001619762 igt:IndianaLicenseFeesMember 2019-12-31 0001619762 igt:NorthstarNewJerseyLotteryMember 2018-12-31 0001619762 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0001619762 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0001619762 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0001619762 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-12-31 0001619762 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0001619762 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001619762 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001619762 us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001619762 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001619762 us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0001619762 us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0001619762 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0001619762 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0001619762 us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0001619762 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001619762 us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001619762 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001619762 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0001619762 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2022Member us-gaap:InterestRateSwapMember us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2015-09-30 0001619762 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2018-12-31 0001619762 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0001619762 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2019-12-31 0001619762 us-gaap:CurrencySwapMember us-gaap:NetInvestmentHedgingMember 2018-10-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember us-gaap:LandMember 2018-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember igt:TerminalsAndSystemsMember 2018-12-31 0001619762 igt:ContractAssetsMember 2018-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember us-gaap:ConstructionInProgressMember 2019-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember 2018-12-31 0001619762 igt:ContractAssetsMember us-gaap:BuildingMember 2018-12-31 0001619762 igt:ContractAssetsMember igt:FurnitureAndEquipmentMember 2019-12-31 0001619762 igt:ContractAssetsMember igt:TerminalsAndSystemsMember 2018-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember us-gaap:ConstructionInProgressMember 2018-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember us-gaap:LandMember 2019-12-31 0001619762 igt:ContractAssetsMember igt:TerminalsAndSystemsMember 2019-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember 2019-12-31 0001619762 igt:ContractAssetsMember 2019-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember us-gaap:BuildingMember 2019-12-31 0001619762 igt:ContractAssetsMember us-gaap:LandMember 2018-12-31 0001619762 igt:ContractAssetsMember igt:FurnitureAndEquipmentMember 2018-12-31 0001619762 igt:ContractAssetsMember us-gaap:BuildingMember 2019-12-31 0001619762 igt:ContractAssetsMember us-gaap:ConstructionInProgressMember 2019-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember igt:FurnitureAndEquipmentMember 2019-12-31 0001619762 igt:ContractAssetsMember us-gaap:ConstructionInProgressMember 2018-12-31 0001619762 igt:ContractAssetsMember us-gaap:LandMember 2019-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember igt:FurnitureAndEquipmentMember 2018-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember igt:TerminalsAndSystemsMember 2019-12-31 0001619762 us-gaap:PropertyPlantAndEquipmentMember us-gaap:BuildingMember 2018-12-31 0001619762 igt:FacilityLeasesMember igt:OperatingHeadquartersFacilityInProvidenceRhodeIslandMember 2019-12-31 0001619762 igt:FacilityLeasesMember igt:FacilityInRenoNevadaMember igt:MainManufacturingAndProductionFacilityRenoNevadaMember 2017-03-29 2017-03-29 0001619762 igt:FacilityLeasesMember igt:FacilityInRenoNevadaMember igt:MainManufacturingAndProductionFacilityRenoNevadaMember 2017-03-29 0001619762 igt:FacilityLeasesMember igt:OperatingHeadquartersFacilityInProvidenceRhodeIslandMember 2019-01-01 2019-12-31 0001619762 srt:MinimumMember 2019-12-31 0001619762 srt:MaximumMember 2019-12-31 0001619762 2017-07-01 2017-09-30 0001619762 2019-10-01 2019-12-31 0001619762 2018-10-01 2018-12-31 0001619762 igt:ItalyMember 2017-12-31 0001619762 igt:NorthAmericaGamingAndInteractiveMember 2017-12-31 0001619762 igt:NorthAmericaGamingAndInteractiveMember 2019-12-31 0001619762 igt:NorthAmericaLotteryMember 2019-12-31 0001619762 igt:ItalyMember 2019-12-31 0001619762 igt:ItalyMember 2018-12-31 0001619762 igt:InternationalMember 2019-12-31 0001619762 igt:InternationalMember 2018-12-31 0001619762 igt:NorthAmericaLotteryMember 2018-12-31 0001619762 igt:NorthAmericaLotteryMember 2017-12-31 0001619762 igt:ItalyMember 2019-01-01 2019-12-31 0001619762 igt:NorthAmericaGamingAndInteractiveMember 2018-12-31 0001619762 igt:ItalyMember 2018-01-01 2018-12-31 0001619762 igt:InternationalMember 2017-12-31 0001619762 us-gaap:ComputerSoftwareIntangibleAssetMember 2019-01-01 2019-12-31 0001619762 us-gaap:ComputerSoftwareIntangibleAssetMember 2017-01-01 2017-12-31 0001619762 us-gaap:ComputerSoftwareIntangibleAssetMember 2018-01-01 2018-12-31 0001619762 us-gaap:TrademarksMember 2019-12-31 0001619762 igt:ConcessionsAndLicensesIntangibleAssetsMember 2019-12-31 0001619762 us-gaap:CustomerRelationshipsMember 2019-12-31 0001619762 igt:ConcessionsAndLicensesIntangibleAssetsMember 2018-12-31 0001619762 us-gaap:CustomerRelationshipsMember 2018-12-31 0001619762 us-gaap:CustomerRelationshipsMember 2019-01-01 2019-12-31 0001619762 igt:ComputerSoftwareAndGameLibraryIntangibleAssetMember 2018-12-31 0001619762 igt:ComputerSoftwareAndGameLibraryIntangibleAssetMember 2019-12-31 0001619762 us-gaap:TrademarksMember 2018-12-31 0001619762 us-gaap:DevelopedTechnologyRightsMember 2019-12-31 0001619762 us-gaap:OtherIntangibleAssetsMember 2018-12-31 0001619762 us-gaap:OtherIntangibleAssetsMember 2019-01-01 2019-12-31 0001619762 us-gaap:ContractualRightsMember 2019-12-31 0001619762 us-gaap:TrademarksMember 2019-12-31 0001619762 igt:ConcessionsAndLicensesIntangibleAssetsMember 2019-01-01 2019-12-31 0001619762 us-gaap:TrademarksMember 2018-12-31 0001619762 us-gaap:DevelopedTechnologyRightsMember 2018-12-31 0001619762 us-gaap:TrademarksMember 2019-01-01 2019-12-31 0001619762 us-gaap:OtherIntangibleAssetsMember 2019-12-31 0001619762 igt:ComputerSoftwareAndGameLibraryIntangibleAssetMember 2019-01-01 2019-12-31 0001619762 us-gaap:DevelopedTechnologyRightsMember 2019-01-01 2019-12-31 0001619762 us-gaap:ContractualRightsMember 2018-12-31 0001619762 us-gaap:LetterOfCreditMember 2019-12-31 0001619762 us-gaap:LetterOfCreditMember 2018-12-31 0001619762 us-gaap:LetterOfCreditMember igt:SeniorUnsecuredUncommittedFacilitiesMember 2019-12-31 0001619762 us-gaap:LetterOfCreditMember igt:SeniorUnsecuredUncommittedFacilitiesMember 2018-12-31 0001619762 us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001619762 us-gaap:RevolvingCreditFacilityMember 2018-12-31 0001619762 igt:SeniorSecuredNotes4.125PercentDueIn2020Member us-gaap:SeniorNotesMember 2018-12-31 0001619762 igt:RevolvingCreditFacilitiesdueJuly2024Member us-gaap:RevolvingCreditFacilityMember 2018-12-31 0001619762 igt:SeniorSecuredNotes5.500PercentDueIn2020Member us-gaap:SeniorNotesMember 2018-12-31 0001619762 igt:SeniorSecuredNotes6.500PercentDueIn2025Member us-gaap:SeniorNotesMember 2018-12-31 0001619762 igt:SeniorSecuredNotes3.500PercentDueIn2024Member us-gaap:SeniorNotesMember 2018-12-31 0001619762 igt:SeniorSecuredNotes5.350PercentDueIn2023Member us-gaap:SeniorNotesMember 2018-12-31 0001619762 us-gaap:SeniorNotesMember 2018-12-31 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2023Member us-gaap:SeniorNotesMember 2018-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2027Member us-gaap:SeniorNotesMember 2018-12-31 0001619762 igt:RevolvingCreditFacilitiesDue2024Member igt:TermLoanMember 2018-12-31 0001619762 igt:TermLoanFacilitiesDueIn2023Member igt:TermLoanMember 2018-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2022Member us-gaap:SeniorNotesMember 2018-12-31 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2020Member us-gaap:SeniorNotesMember 2018-12-31 0001619762 igt:OtherCreditFacilitiesMember us-gaap:LineOfCreditMember 2019-01-01 2019-12-31 0001619762 igt:RevolvingCreditFacilityBMember us-gaap:RevolvingCreditFacilityMember 2019-07-24 0001619762 igt:SeniorSecuredNotes7.500PercentDueIn2019Member us-gaap:SeniorNotesMember 2017-01-01 2017-12-31 0001619762 igt:SeniorSecuredNotes7.500PercentDueIn2019Member us-gaap:SeniorNotesMember 2018-09-26 0001619762 igt:SeniorSecuredNotes7.500PercentDueIn2019Member us-gaap:SeniorNotesMember 2017-06-12 0001619762 igt:SeniorSecuredNotes2.375PercentDueIn2028Member us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes3.500PercentDueIn2026Member us-gaap:SeniorNotesMember 2019-06-20 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2027Member us-gaap:SeniorNotesMember 2018-09-26 0001619762 igt:SeniorSecuredNotes3.500PercentDueIn2024Member us-gaap:SeniorNotesMember 2018-06-27 0001619762 igt:SeniorSecuredNotes5.500PercentDueIn2020Member us-gaap:SeniorNotesMember 2018-09-26 0001619762 igt:SeniorSecuredNotes4.125PercentDueIn2020Member us-gaap:SeniorNotesMember 2019-06-20 0001619762 igt:RevolvingCreditFacilityaMember us-gaap:RevolvingCreditFacilityMember 2019-07-23 0001619762 igt:SeniorSecuredNotes4.125PercentDueIn2020Member us-gaap:SeniorNotesMember 2018-06-27 0001619762 igt:SeniorSecuredNotes6.625PercentDueIn2018Member us-gaap:SeniorNotesMember 2018-12-31 0001619762 us-gaap:RevolvingCreditFacilityMember 2019-01-01 2019-12-31 0001619762 igt:A5.625SeniorSecuredNotesdueFebruary20207.500SeniorSecuredNotesdueJuly2019and5.500SeniorSecuredNotesdueJune2020Member us-gaap:SeniorNotesMember 2018-09-26 0001619762 igt:SeniorSecuredNotes7.500PercentDueIn2019Member us-gaap:SeniorNotesMember 2018-12-31 0001619762 igt:SeniorSecuredNotes2.375PercentDueIn2028Member us-gaap:SeniorNotesMember 2019-09-16 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2020Member us-gaap:SeniorNotesMember 2018-06-27 0001619762 igt:TermLoanFacilitiesDueIn2023Member igt:TermLoanMember 2017-07-25 0001619762 igt:TermLoanFacilitiesDueIn2023Member igt:TermLoanMember 2019-09-27 0001619762 igt:RevolvingCreditFacilityaMember us-gaap:RevolvingCreditFacilityMember 2019-07-24 0001619762 igt:SeniorSecuredNotes5.625PercentDueIn2020Member us-gaap:SeniorNotesMember 2018-09-26 0001619762 igt:RevolvingCreditFacilityBMember us-gaap:RevolvingCreditFacilityMember 2019-07-23 0001619762 us-gaap:RevolvingCreditFacilityMember 2018-12-31 0001619762 igt:SeniorSecuredNotes7.500PercentDueIn2019Member us-gaap:SeniorNotesMember 2017-06-21 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2020Member us-gaap:SeniorNotesMember 2019-12-31 0001619762 igt:TermLoanFacilitiesDueIn2023Member igt:TermLoanMember 2019-09-16 0001619762 igt:SeniorSecuredNotes3.500PercentDueIn2026Member us-gaap:SeniorNotesMember 2019-06-20 2019-06-20 0001619762 igt:RevolvingCreditFacilitiesDue2024Member igt:TermLoanMember 2019-06-20 2019-06-20 0001619762 igt:A4.125SeniorSecuredNotesdueFebruary2020and4.750SeniorSecuredNotesdueMarch2020Member us-gaap:SeniorNotesMember 2018-06-27 0001619762 igt:A5.625SeniorSecuredNotesdueFebruary20207.500SeniorSecuredNotesdueJuly2019and5.500SeniorSecuredNotesdueJune2020Member us-gaap:SeniorNotesMember 2018-01-01 2018-12-31 0001619762 igt:TermLoanFacilitiesDueIn2023Member igt:TermLoanMember 2019-12-31 0001619762 us-gaap:SeniorNotesMember 2018-01-01 2018-12-31 0001619762 igt:OtherCreditFacilitiesMember us-gaap:LineOfCreditMember 2019-12-31 0001619762 igt:RevolvingCreditFacilitiesDue2024Member igt:TermLoanMember 2019-09-27 2019-09-27 0001619762 us-gaap:RevolvingCreditFacilityMember 2018-01-01 2018-12-31 0001619762 igt:TermLoanMember 2018-01-01 2018-12-31 0001619762 us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:LongtermDebtOtherMember 2019-01-01 2019-12-31 0001619762 igt:LongtermDebtOtherMember 2018-01-01 2018-12-31 0001619762 igt:TermLoanMember 2019-01-01 2019-12-31 0001619762 us-gaap:SeniorNotesMember 2017-01-01 2017-12-31 0001619762 us-gaap:RevolvingCreditFacilityMember 2017-01-01 2017-12-31 0001619762 igt:LongtermDebtOtherMember 2017-01-01 2017-12-31 0001619762 igt:TermLoanMember 2017-01-01 2017-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2022Member us-gaap:SeniorNotesMember 2019-12-31 0001619762 us-gaap:SecuredDebtMember 2019-12-31 0001619762 igt:RevolvingCreditFacilitiesDue2024Member us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001619762 us-gaap:SeniorNotesMember 2019-12-31 0001619762 igt:SeniorSecuredNotes5.350PercentDueIn2023Member us-gaap:SeniorNotesMember 2019-12-31 0001619762 igt:SeniorSecuredNotes3.500PercentDueIn2026Member us-gaap:SeniorNotesMember 2019-12-31 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2020Member us-gaap:SecuredDebtMember 2019-12-31 0001619762 igt:SeniorSecuredNotes2.375PercentDueIn2028Member us-gaap:SeniorNotesMember 2019-12-31 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2023Member us-gaap:SeniorNotesMember 2019-12-31 0001619762 igt:SeniorSecuredNotes5.500PercentDueIn2020Member us-gaap:SecuredDebtMember 2019-12-31 0001619762 igt:SeniorSecuredNotes3.500PercentDueIn2024Member us-gaap:SeniorNotesMember 2019-12-31 0001619762 igt:RevolvingCreditFacilitiesdueJuly2024Member us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001619762 igt:SeniorSecuredNotes6.500PercentDueIn2025Member us-gaap:SeniorNotesMember 2019-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2027Member us-gaap:SeniorNotesMember 2019-12-31 0001619762 us-gaap:RevolvingCreditFacilityMember 2019-12-31 0001619762 igt:SeniorSecuredNotes5.500PercentDueIn2020Member us-gaap:SeniorNotesMember 2019-12-31 0001619762 currency:USD 2019-12-31 0001619762 currency:EUR 2019-12-31 0001619762 igt:SeniorSecuredNotes4.125PercentDueIn2020Member us-gaap:DebtInstrumentRedemptionPeriodFiveMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2022Member us-gaap:DebtInstrumentRedemptionPeriodFiveMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes5.500PercentDueIn2020Member us-gaap:DebtInstrumentRedemptionPeriodFourMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes4.125PercentDueIn2020Member us-gaap:DebtInstrumentRedemptionPeriodFourMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2027Member us-gaap:DebtInstrumentRedemptionPeriodThreeMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes3.500PercentDueIn2024Member us-gaap:DebtInstrumentRedemptionPeriodFiveMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.500PercentDueIn2025Member us-gaap:DebtInstrumentRedemptionPeriodTwoMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2027Member us-gaap:DebtInstrumentRedemptionPeriodFourMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2020Member igt:DebtInstrumentRedemptionPeriodSevenMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.500PercentDueIn2025Member us-gaap:DebtInstrumentRedemptionPeriodFiveMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes5.350PercentDueIn2023Member igt:DebtInstrumentRedemptionPeriodEightMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes4.125PercentDueIn2020Member us-gaap:DebtInstrumentRedemptionPeriodOneMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes5.500PercentDueIn2020Member us-gaap:DebtInstrumentRedemptionPeriodFiveMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2027Member us-gaap:DebtInstrumentRedemptionPeriodTwoMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.500PercentDueIn2025Member us-gaap:DebtInstrumentRedemptionPeriodThreeMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2020Member igt:DebtInstrumentRedemptionPeriodSixMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes3.500PercentDueIn2024Member us-gaap:DebtInstrumentRedemptionPeriodFourMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2027Member us-gaap:DebtInstrumentRedemptionPeriodFiveMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2023Member us-gaap:DebtInstrumentRedemptionPeriodFiveMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2023Member us-gaap:DebtInstrumentRedemptionPeriodFourMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2022Member us-gaap:DebtInstrumentRedemptionPeriodTwoMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.500PercentDueIn2025Member us-gaap:DebtInstrumentRedemptionPeriodFourMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2023Member us-gaap:DebtInstrumentRedemptionPeriodTwoMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes5.350PercentDueIn2023Member us-gaap:DebtInstrumentRedemptionPeriodFourMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes4.125PercentDueIn2020Member us-gaap:DebtInstrumentRedemptionPeriodThreeMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes3.500PercentDueIn2024Member us-gaap:DebtInstrumentRedemptionPeriodThreeMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes3.500PercentDueIn2024Member us-gaap:DebtInstrumentRedemptionPeriodTwoMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes5.500PercentDueIn2020Member igt:DebtInstrumentRedemptionPeriodEightMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2022Member us-gaap:DebtInstrumentRedemptionPeriodFourMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2020Member us-gaap:DebtInstrumentRedemptionPeriodFourMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes4.750PercentDueIn2023Member us-gaap:DebtInstrumentRedemptionPeriodThreeMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes6.250PercentDueIn2022Member us-gaap:DebtInstrumentRedemptionPeriodThreeMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 igt:SeniorSecuredNotes5.350PercentDueIn2023Member us-gaap:DebtInstrumentRedemptionPeriodFiveMember us-gaap:SeniorNotesMember 2019-01-01 2019-12-31 0001619762 country:IT igt:TaxYears2014through2015Member 2019-01-01 2019-12-31 0001619762 country:MX 2019-12-31 0001619762 us-gaap:ForeignCountryMember 2019-12-31 0001619762 country:MX 2016-01-01 2016-12-31 0001619762 2017-10-01 2017-12-31 0001619762 country:US us-gaap:ForeignCountryMember 2019-12-31 0001619762 country:GB us-gaap:DomesticCountryMember 2019-12-31 0001619762 us-gaap:StateAndLocalJurisdictionMember 2019-12-31 0001619762 igt:AllOtherCountriesMember 2018-01-01 2018-12-31 0001619762 country:US 2018-01-01 2018-12-31 0001619762 igt:AllOtherCountriesMember 2017-01-01 2017-12-31 0001619762 country:GB 2019-01-01 2019-12-31 0001619762 country:IT 2017-01-01 2017-12-31 0001619762 country:US 2017-01-01 2017-12-31 0001619762 igt:AllOtherCountriesMember 2019-01-01 2019-12-31 0001619762 country:IT 2018-01-01 2018-12-31 0001619762 country:US 2019-01-01 2019-12-31 0001619762 country:IT 2019-01-01 2019-12-31 0001619762 country:GB 2018-01-01 2018-12-31 0001619762 country:GB 2017-01-01 2017-12-31 0001619762 igt:JackpotLiabilitiesPreviousWinnersMember 2019-12-31 0001619762 igt:JackpotLiabilitiesMember 2019-12-31 0001619762 igt:JackpotLiabilitiesFutureWinnersMember 2019-12-31 0001619762 igt:LitigationBondsMember 2019-12-31 0001619762 igt:PerformanceBondsMember 2019-12-31 0001619762 igt:OtherBondsMember 2019-12-31 0001619762 igt:WideAreaProgressiveBondsMember 2019-12-31 0001619762 igt:PerformanceBondsMember 2019-01-01 2019-12-31 0001619762 igt:NorthstarLotteryGroupLLCMember 2019-01-01 2019-12-31 0001619762 igt:SteeleVGtechMember 2014-12-09 2014-12-09 0001619762 igt:McdonaldVGtechMember srt:MinimumMember 2016-06-10 2016-06-10 0001619762 igt:TexasFun5sInstantTicketGameMember 2019-01-01 2019-12-31 0001619762 igt:NettlesVGtechMember srt:MinimumMember 2015-01-07 2015-01-07 0001619762 igt:Camposetal.v.GTECHCorporationMember srt:MinimumMember 2016-10-20 2016-10-20 0001619762 igt:Wigginsv.IGTGlobalSolutionsCorp.Member srt:MinimumMember 2016-09-15 2016-09-15 0001619762 igt:SteeleVGtechMember srt:MinimumMember 2014-12-09 2014-12-09 0001619762 2016-04-01 2016-06-30 0001619762 2018-01-01 2018-03-31 0001619762 2018-04-01 2018-06-30 0001619762 2017-04-01 2017-06-30 0001619762 2017-01-01 2017-03-31 0001619762 2016-07-01 2016-09-30 0001619762 2016-10-01 2016-12-31 0001619762 2016-01-01 2016-03-31 0001619762 2018-07-01 2018-09-30 0001619762 us-gaap:AociAttributableToNoncontrollingInterestMember 2019-01-01 2019-12-31 0001619762 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2019-01-01 2019-12-31 0001619762 us-gaap:AociAttributableToNoncontrollingInterestMember 2018-01-01 2018-12-31 0001619762 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2017-01-01 2017-12-31 0001619762 us-gaap:AociAttributableToNoncontrollingInterestMember 2019-12-31 0001619762 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2018-01-01 2018-12-31 0001619762 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2017-01-01 2017-12-31 0001619762 igt:AccumulatedGainLossDefinedBenefitPlanAndSecuritiesAvailableforSaleIncludingNoncontrollingInterestMember 2016-12-31 0001619762 igt:AccumulatedGainLossDefinedBenefitPlanAndSecuritiesAvailableforSaleIncludingNoncontrollingInterestMember 2019-01-01 2019-12-31 0001619762 us-gaap:AociAttributableToNoncontrollingInterestMember 2018-12-31 0001619762 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2018-01-01 2018-12-31 0001619762 igt:AccumulatedGainLossDefinedBenefitPlanAndSecuritiesAvailableforSaleIncludingNoncontrollingInterestMember 2018-01-01 2018-12-31 0001619762 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0001619762 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2016-12-31 0001619762 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0001619762 igt:AccumulatedGainLossDefinedBenefitPlanAndSecuritiesAvailableforSaleIncludingNoncontrollingInterestMember 2017-01-01 2017-12-31 0001619762 us-gaap:AociAttributableToNoncontrollingInterestMember 2017-01-01 2017-12-31 0001619762 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2017-12-31 0001619762 us-gaap:AociAttributableToNoncontrollingInterestMember 2017-12-31 0001619762 igt:AccumulatedGainLossDefinedBenefitPlanAndSecuritiesAvailableforSaleIncludingNoncontrollingInterestMember 2019-12-31 0001619762 us-gaap:AccumulatedGainLossCashFlowHedgeIncludingNoncontrollingInterestMember 2019-12-31 0001619762 igt:AccumulatedGainLossDefinedBenefitPlanAndSecuritiesAvailableforSaleIncludingNoncontrollingInterestMember 2017-12-31 0001619762 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2016-12-31 0001619762 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-12-31 0001619762 us-gaap:AociAttributableToNoncontrollingInterestMember 2016-12-31 0001619762 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0001619762 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2016-12-31 0001619762 us-gaap:AccumulatedForeignCurrencyAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2017-12-31 0001619762 igt:AccumulatedGainLossDefinedBenefitPlanAndSecuritiesAvailableforSaleIncludingNoncontrollingInterestMember 2018-12-31 0001619762 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0001619762 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2017-12-31 0001619762 us-gaap:AccumulatedNetGainLossFromCashFlowHedgesIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0001619762 igt:NewJerseyHoldingCompanyLLCMember 2019-12-31 0001619762 igt:NorthstarNewJerseyLotteryMember 2019-12-31 0001619762 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember 2019-12-31 0001619762 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember 2018-12-31 0001619762 igt:LottomaticaMember 2019-12-31 0001619762 igt:LotterieNazionaliMember 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:NorthAmericaLotteryMember 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:InternationalMember 2018-12-31 0001619762 us-gaap:CorporateNonSegmentMember 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:NorthAmericaGamingAndInteractiveMember 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember 2018-12-31 0001619762 us-gaap:CorporateNonSegmentMember 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:ItalySegmentMember 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:NorthAmericaLotteryMember 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:InternationalMember 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:NorthAmericaGamingAndInteractiveMember 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:ItalySegmentMember 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember 2017-01-01 2017-12-31 0001619762 us-gaap:MaterialReconcilingItemsMember us-gaap:ProductMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:ItalySegmentMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:InternationalMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:InternationalMember 2017-01-01 2017-12-31 0001619762 us-gaap:CorporateNonSegmentMember us-gaap:ServiceMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:NorthAmericaLotteryMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:NorthAmericaGamingAndInteractiveMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:InternationalMember 2017-01-01 2017-12-31 0001619762 us-gaap:MaterialReconcilingItemsMember 2017-01-01 2017-12-31 0001619762 us-gaap:CorporateNonSegmentMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:ItalySegmentMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:NorthAmericaLotteryMember 2017-01-01 2017-12-31 0001619762 us-gaap:MaterialReconcilingItemsMember us-gaap:ServiceMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:NorthAmericaGamingAndInteractiveMember 2017-01-01 2017-12-31 0001619762 us-gaap:CorporateNonSegmentMember us-gaap:ProductMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:NorthAmericaLotteryMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:NorthAmericaGamingAndInteractiveMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:ItalySegmentMember 2017-01-01 2017-12-31 0001619762 igt:AllOtherCountriesMember 2019-12-31 0001619762 country:GB 2018-12-31 0001619762 country:GB 2019-12-31 0001619762 country:US 2018-12-31 0001619762 igt:EuropeExcludingUnitedKingdomMember 2019-12-31 0001619762 country:US 2019-12-31 0001619762 igt:EuropeExcludingUnitedKingdomMember 2018-12-31 0001619762 igt:AllOtherCountriesMember 2018-12-31 0001619762 country:IT 2018-12-31 0001619762 country:IT 2019-12-31 0001619762 igt:ADMMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2017-01-01 2017-12-31 0001619762 igt:ADMMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2018-01-01 2018-12-31 0001619762 igt:ADMMember us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember 2019-01-01 2019-12-31 0001619762 us-gaap:MaterialReconcilingItemsMember us-gaap:ServiceMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 us-gaap:CorporateNonSegmentMember us-gaap:ProductMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember 2019-01-01 2019-12-31 0001619762 us-gaap:MaterialReconcilingItemsMember us-gaap:ProductMember 2019-01-01 2019-12-31 0001619762 us-gaap:CorporateNonSegmentMember 2019-01-01 2019-12-31 0001619762 us-gaap:CorporateNonSegmentMember us-gaap:ServiceMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:NorthAmericaGamingAndInteractiveMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:NorthAmericaLotteryMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:ItalySegmentMember 2019-01-01 2019-12-31 0001619762 us-gaap:MaterialReconcilingItemsMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:InternationalMember 2019-01-01 2019-12-31 0001619762 igt:EuropeExcludingUnitedKingdomMember 2019-01-01 2019-12-31 0001619762 igt:EuropeExcludingUnitedKingdomMember 2018-01-01 2018-12-31 0001619762 igt:EuropeExcludingUnitedKingdomMember 2017-01-01 2017-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 us-gaap:MaterialReconcilingItemsMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 us-gaap:CorporateNonSegmentMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 us-gaap:CorporateNonSegmentMember us-gaap:ServiceMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember igt:NorthAmericaGamingAndInteractiveMember 2018-01-01 2018-12-31 0001619762 us-gaap:MaterialReconcilingItemsMember us-gaap:ProductMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember igt:NorthAmericaLotteryMember 2018-01-01 2018-12-31 0001619762 us-gaap:MaterialReconcilingItemsMember us-gaap:ServiceMember 2018-01-01 2018-12-31 0001619762 us-gaap:CorporateNonSegmentMember us-gaap:ProductMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:ItalySegmentMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember igt:InternationalMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ServiceMember 2018-01-01 2018-12-31 0001619762 us-gaap:OperatingSegmentsMember us-gaap:ProductMember 2018-01-01 2018-12-31 0001619762 us-gaap:PerformanceSharesMember 2017-01-01 2017-12-31 0001619762 igt:Equity2015IncentivePlanMember 2019-12-31 0001619762 us-gaap:RestrictedStockUnitsRSUMember 2019-01-01 2019-12-31 0001619762 srt:ChiefExecutiveOfficerMember us-gaap:EmployeeStockOptionMember 2019-01-01 2019-12-31 0001619762 us-gaap:PerformanceSharesMember 2019-01-01 2019-12-31 0001619762 us-gaap:RestrictedStockUnitsRSUMember 2017-01-01 2017-12-31 0001619762 us-gaap:PerformanceSharesMember 2018-01-01 2018-12-31 0001619762 us-gaap:PerformanceSharesMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2019-01-01 2019-12-31 0001619762 us-gaap:RestrictedStockUnitsRSUMember 2018-01-01 2018-12-31 0001619762 us-gaap:PerformanceSharesMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2019-01-01 2019-12-31 0001619762 us-gaap:ResearchAndDevelopmentExpenseMember 2017-01-01 2017-12-31 0001619762 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-12-31 0001619762 igt:CostOfServicesMember 2017-01-01 2017-12-31 0001619762 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2018-01-01 2018-12-31 0001619762 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2017-01-01 2017-12-31 0001619762 us-gaap:CostOfSalesMember 2019-01-01 2019-12-31 0001619762 igt:CostOfServicesMember 2018-01-01 2018-12-31 0001619762 us-gaap:CostOfSalesMember 2017-01-01 2017-12-31 0001619762 us-gaap:CostOfSalesMember 2018-01-01 2018-12-31 0001619762 igt:CostOfServicesMember 2019-01-01 2019-12-31 0001619762 us-gaap:ResearchAndDevelopmentExpenseMember 2018-01-01 2018-12-31 0001619762 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-01-01 2019-12-31 0001619762 us-gaap:EmployeeStockOptionMember 2018-12-31 0001619762 us-gaap:EmployeeStockOptionMember 2018-01-01 2018-12-31 0001619762 us-gaap:RestrictedStockUnitsRSUMember 2018-12-31 0001619762 us-gaap:RestrictedStockUnitsRSUMember 2019-12-31 0001619762 us-gaap:PerformanceSharesMember 2019-12-31 0001619762 us-gaap:PerformanceSharesMember 2018-12-31 0001619762 us-gaap:DisposalGroupNotDiscontinuedOperationsMember igt:DoubleDownMember 2017-06-01 2017-06-01 0001619762 us-gaap:DisposalGroupNotDiscontinuedOperationsMember igt:DoubleDownMember 2017-01-01 2017-12-31 0001619762 us-gaap:StockCompensationPlanMember 2017-01-01 2017-12-31 0001619762 us-gaap:StockCompensationPlanMember 2019-01-01 2019-12-31 0001619762 us-gaap:StockCompensationPlanMember 2018-01-01 2018-12-31 0001619762 igt:RingmasterS.r.l.Member us-gaap:CorporateJointVentureMember 2019-01-01 2019-12-31 0001619762 igt:CreditSuisseInternationalMember igt:InternationalGameTechnologyMember igt:VariableForwardTransactionMember 2018-05-22 0001619762 us-gaap:MajorityShareholderMember 2018-12-31 0001619762 igt:RingmasterS.r.l.Member us-gaap:CorporateJointVentureMember 2019-12-31 0001619762 igt:RingmasterS.r.l.Member us-gaap:CorporateJointVentureMember 2017-01-01 2017-12-31 0001619762 igt:RingmasterS.r.l.Member us-gaap:CorporateJointVentureMember 2018-12-31 0001619762 igt:ConnectVenturesOneLpMember igt:EntityWithCommonDirectorOrManagementMember 2018-12-31 0001619762 igt:ConnectVenturesOneLpMember igt:EntityWithCommonDirectorOrManagementMember 2019-12-31 0001619762 srt:ParentCompanyMember igt:InternationalGameTechnologyMember igt:VariableForwardTransactionMember 2018-05-22 0001619762 igt:ConnectVenturesTwoLPMember igt:EntityWithCommonDirectorOrManagementMember 2018-12-31 0001619762 us-gaap:MajorityShareholderMember 2019-12-31 0001619762 igt:ConnectVenturesTwoLPMember igt:EntityWithCommonDirectorOrManagementMember 2019-12-31 0001619762 igt:RingmasterS.r.l.Member us-gaap:CorporateJointVentureMember 2018-01-01 2018-12-31 0001619762 igt:ConnectVenturesOneLpMember us-gaap:ImmediateFamilyMemberOfManagementOrPrincipalOwnerMember 2019-12-31 iso4217:USD xbrli:shares igt:receivable_class igt:fixed_asset_type iso4217:USD xbrli:pure iso4217:EUR igt:Reporting_unit xbrli:shares igt:extension_option igt:renewal_period igt:regions igt:lawsuit igt:segments igt:plaintiff igt:employees iso4217:MXN

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
FORM 20-F
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
OR
 
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended
December 31, 2019
OR
 
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
OR
 
 
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-36906

INTERNATIONAL GAME TECHNOLOGY PLC
(Exact name of Registrant as specified in its charter)

England and Wales
(Jurisdiction of incorporation or organization)

66 Seymour Street, 2nd Floor
London W1H 5BT
United Kingdom
(Address of principal executive offices)

Christopher Spears
Senior Vice President and General Counsel
Telephone: (401) 392-1000 Fax: (401) 392-4812
E-mail: Christopher.Spears@IGT.com
IGT Center, 10 Memorial Boulevard, Providence, RI 02903
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered pursuant to Section 12(b) of the Act: 
 
Title of each class
 
Name of each exchange on which registered
 
Trading Symbol
 
 
 
 
 
 
 
 
 
Ordinary Shares, nominal value $0.10
 
New York Stock Exchange
 
IGT
 
Securities registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
204,435,333

ordinary shares, nominal value $0.10 per share
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. 
x Yes   o No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Act of 1934. 
o Yes   x 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.
x Yes   o 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).
x Yes   o No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
x
Accelerated filer 
o
Non-accelerated filer
 o
Emerging growth company
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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. o
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP
x
 
 International Financial Reporting Standards as issued
by the International Accounting Standards Board
 o
 
Other 
o
If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow.
o Item 17   or o Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes   x No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
o Yes   o No




TABLE OF CONTENTS
 
 
Page
 
 
3
 
 
 
4
 
 
 
5
 
 
 
 
6
 
 
 
6
6
6
18
31
32
51
68
69
70
70
83
84
 
 
 
 
85
 
 
 
85
85
85
86
86
86
86
87
87
87
87
 
 
 
 
87
 
 
87
87
87


2



PRESENTATION OF FINANCIAL AND CERTAIN OTHER INFORMATION

International Game Technology PLC (the "Parent"), together with its consolidated subsidiaries, is a global leader in gaming. In this annual report on Form 20-F, unless otherwise specified or the context otherwise indicates, all references to “IGT PLC” and the “Company” refer to the business and operations of the Parent and its consolidated subsidiaries.
This annual report on Form 20-F includes the consolidated financial statements of the Company for the years ended December 31, 2019, 2018 and 2017 (the “Consolidated Financial Statements”) prepared in accordance with United States Generally Accepted Accounting Principles as issued by the Financial Accounting Standards Board.
The financial information is presented in U.S. dollars. All references to “U.S. dollars,” “U.S. dollar,” “U.S. $” and “$” refer to the currency of the United States of America. All references to “euro” and “€” refer to the currency introduced at the start of the third stage of the European Economic and Monetary Union pursuant to the Treaty on the Functioning of the European Union, as amended.
The language of this annual report on Form 20-F is English. Certain legislative references and technical terms have been cited in their original language so that the correct technical meaning may be ascribed to them under applicable law. 


3


Glossary of Certain Terms and Abbreviations

The glossary is used to define common terms and abbreviations that appear throughout the annual report on Form 20-F. Other, less common, terms and phrases are defined in the sections in which they appear, as they may either be Company or industry-specific. Additionally, definitions in “Item 18. Financial Statements” stand alone and are independently defined in that section.
Abbreviation/Term
 
Definition
ASC
 
Accounting Standards Codification
ASU
 
Accounting Standards Update
B2B
 
business-to-business
B2C
 
business-to-consumer
BEAT
 
base-erosion and anti-abuse tax
Brexit
 
the vote by the U.K. to leave the E.U. and the terms of such departure
CEO
 
Chief Executive Officer
CFO
 
Chief Financial Officer
Company
 
the Parent together with its consolidated subsidiaries
De Agostini
 
De Agostini S.p.A.
EBITDA
 
earnings before interest, taxes, depreciation and amortization
E.U.
 
European Union
GAAP
 
United States Generally Accepted Accounting Principles
GDPR
 
E.U. General Data Protection Regulation
GILTI
 
global intangible low-taxed income
GTECH
 
GTECH S.p.A.
iGaming
 
digital (interactive) gaming
IGT
 
International Game Technology, a Nevada corporation
IGT PLC
 
the Parent together with its consolidated subsidiaries
Lottomatica
 
Lottomatica Holding S.r.l.
Loyalty Plan
 
the terms and conditions related to the Special Voting Shares
Loyalty Register
 
the register of ordinary shares for which holders thereof have validly elected to exercise the related Special Voting Shares
NAGI
 
North America Gaming and Interactive
NALO
 
North America Lottery
NYSE
 
New York Stock Exchange
Parent
 
International Game Technology PLC
R&D
 
research and development
SEC
 
United States Securities and Exchange Commission
Special Voting Shares
 
the special voting shares in the Parent, worth U.S.$0.000001 each and carrying 0.9995 votes
Tax Act
 
the Tax Cuts and Jobs Act of 2017
U.K.
 
United Kingdom
U.S.
 
United States of America
Wire Act
 
U.S. Interstate Wire Act of 1961

4


FORWARD-LOOKING STATEMENTS

This annual report on Form 20-F includes forward-looking statements (including within the meaning of the Private Securities Litigation Reform Act of 1995) concerning the Company and other matters. These statements may discuss goals, intentions, and expectations as to future plans, trends, events, dividends, results of operations, or financial condition, or otherwise, based on current beliefs of the management of the Company as well as assumptions made by, and information currently available to, such management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “would,” “should,” “shall,” “continue,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or the negative or other variations of them. These forward-looking statements speak only as of the date on which such statements are made and are subject to various risks and uncertainties, many of which are outside the Company’s control. Should one or more of these risks or uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may differ materially from those predicted in the forward-looking statements and from past results, performance, or achievements. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include (but are not limited to):

the possibility that the Parent will be unable to pay future dividends to shareholders or that the amount of such dividends may be less than anticipated;
the possibility that the Company may not achieve its anticipated financial results in one or more future periods;
reductions in customer spending;
a slowdown in customer payments and changes in customer demand for products and services as a result of changing
economic conditions or otherwise;
unanticipated changes relating to competitive factors in the industries in which the Company operates;
the Company’s ability to hire and retain key personnel;
the Company’s ability to attract new customers and retain existing customers in the manner anticipated;
reliance on and integration of information technology systems;
changes in legislation, governmental regulations, or the enforcement thereof that could affect the Company;
enforcement of an interpretation of the Wire Act in such a manner as to prohibit or limit activities in which the Company and its customers are engaged;
international, national, or local economic, social, or political conditions that could adversely affect the Company or its
customers;
conditions in the credit markets; risks associated with assumptions the Company makes in connection with its critical
accounting estimates;
the resolution of pending and potential future legal, regulatory, or tax proceedings and investigations;
the Company’s international operations, which are subject to the risks of currency fluctuations and foreign
exchange controls; and
the effect of coronavirus on our operations or the operations of our customers and suppliers.
 
The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that affect the Company’s business, including those described in “Item 3. Key Information—D. Risk Factors” and other documents filed by the Parent from time to time with the SEC. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements. Nothing in this annual report is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per share of the Parent for the current or any future financial years will necessarily match or exceed the historical published earnings per share of the Parent, as applicable. All forward-looking statements contained in this annual report on Form 20-F are qualified in their entirety by this cautionary statement.



5


PART I
 
Item 1. 
Identity of Directors, Senior Management and Advisers 
Not applicable.
 
Item 2. 
Offer Statistics and Expected Timetable
Not applicable.
 
Item 3. 
Key Information
A.
Selected Financial Data 
The following tables set forth the Company's summary historical consolidated financial and other information for the periods indicated, which have been derived from the consolidated financial statements of the Company for the years ended December 31, 2019, 2018, 2017, 2016, and 2015.
The following information should be read in conjunction with: 
“Presentation of Financial and Certain Other Information;”
“Item 3.D. Risk Factors;”
“Item 5. Operating and Financial Review and Prospects;” and
The Consolidated Financial Statements included in “Item 18. Financial Statements.”
Consolidated Income Statement Data
 
 
For the years ended December 31,
($ thousands, except per share and dividend amounts)
 
2019
 
2018
 
2017
 
2016
 
2015 (2)
Total revenue (1)
 
4,785,806

 
4,831,256

 
4,938,959

 
5,153,896

 
4,689,056

Operating income (loss)
 
637,128

 
646,991

 
(51,092
)
 
660,436

 
539,956

Income (loss) before provision for income taxes
 
284,767

 
304,048

 
(976,925
)
 
323,413

 
(17,031
)
Net income (loss)
 
111,658

 
114,647

 
(947,511
)
 
264,207

 
(55,927
)
Attributable to:
 
 

 
 

 
 

 
 
 
 
IGT PLC
 
(19,025
)
 
(21,350
)
 
(1,068,576
)
 
211,337

 
(75,574
)
Non-controlling interests
 
130,683

 
115,671

 
55,400

 
45,413

 
19,647

Redeemable non-controlling interests
 

 
20,326

 
65,665

 
7,457

 

Net (loss) income attributable to IGT PLC per common share - basic
 
(0.09
)
 
(0.10
)
 
(5.26
)
 
1.05

 
(0.39
)
Net (loss) income attributable to IGT PLC per common share - diluted
 
(0.09
)
 
(0.10
)
 
(5.26
)
 
1.05

 
(0.39
)
Dividends declared per common share ($)
 
0.80

 
0.80

 
0.80

 
0.80

 
0.40

(1) The Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and all subsequent amendments (collectively "ASC 606") in the first quarter of 2018 using a modified retrospective application approach. Results for reporting periods on or after January 1, 2018 are presented under ASC 606. Prior period amounts were not adjusted and, as such, are not comparable.
(2) On April 7, 2015, GTECH S.p.A. acquired IGT. Prior to April 7, 2015, the historical information presented reflects the results of GTECH S.p.A. only.






6


Consolidated Balance Sheet Data
 
 
December 31,
($ thousands, except share amounts)
 
2019
 
2018
 
2017
 
2016
 
2015
Cash and cash equivalents
 
662,934

 
250,669

 
1,057,418

 
294,094

 
627,484

Total assets (1) (2)
 
13,644,590

 
13,648,502

 
15,159,208

 
15,060,162

 
15,163,295

Debt (3)
 
8,065,517

 
8,012,089

 
8,376,559

 
7,863,162

 
8,334,173

Redeemable non-controlling interests
 

 

 
356,917

 
223,141

 

Total equity
 
2,484,978

 
2,751,929

 
2,354,931

 
3,425,665

 
3,366,142

Attributable to IGT PLC
 
1,658,262

 
1,807,899

 
2,004,995

 
3,068,699

 
3,017,648

Attributable to non-controlling interests
 
826,716

 
944,030

 
349,936

 
356,966

 
348,494

Common stock
 
20,443

 
20,421

 
20,344

 
20,228

 
20,024

Common shares issued
 
204,435,333

 
204,210,731

 
203,446,572

 
202,285,166

 
200,244,239

(1) The Company adopted ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash ("ASU 2016-18"), in the first quarter of 2018. In connection with the adoption of ASU 2016-18, the Company corrected its consolidated balance sheet at December 31, 2015 to include additional amounts of restricted cash and cash equivalents of $48.6 million, which had previously been offset against current liabilities of the same amounts.
(2) The Company adopted ASU No. 2016-02, Leases (Topic 842) and all subsequent amendments (collectively "ASC 842") in the first quarter of 2019 using the optional transition method. The adoption of ASC 842 resulted in the Company recognizing right-of-use assets and lease liabilities on the consolidated balance sheet for reporting periods on or after January 1, 2019. Prior period amounts were not adjusted, and, as such, are not comparable.
(3) Debt is composed of: (i) current portion of long-term debt, (ii) short-term borrowings, and (iii) long-term debt, less current portion, as included in the Consolidated Balance Sheets in Item 18. Financial Statements.
B. Capitalization and Indebtedness
Not applicable.
C.
Reasons for the Offer and Use of Proceeds
Not applicable.

7


D.
Risk Factors
The following risks should be considered in conjunction with “Item 5. Operating and Financial Review and Prospects” and the other risks described in the Safe Harbor Statement set forth in Item 5.G. These risks may affect the Company's operating results and, individually or in the aggregate, could cause its actual results to differ materially from past and anticipated future results. The following discussion of risks may contain forward-looking statements which are intended to be covered by the Safe Harbor Statement. Except as may be required by law, the Company undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events, or otherwise. The Company invites you to consult any further related disclosures made by the Parent from time to time in materials filed with or furnished to the SEC.
Risks related to the Company's Business and Industry
The Company has a concentrated customer base in certain business segments, and the loss of any of its larger customers (or lower sales from any of these customers) could lead to significantly lower revenue
A substantial portion of the Company’s revenues (equal to approximately 32.0% of its total consolidated revenues for the year ended December 31, 2019) is derived from exclusive and non-exclusive licenses awarded to the Company by Agenzia delle Dogane e Dei Monopoli ("ADM"), the governmental authority responsible for regulating and supervising gaming in Italy. In particular, a substantial portion of the Company’s revenues is derived from two exclusive licenses, one for the operation of the Italian Gioco del Lotto game (the "Lotto License") and one for instant tickets (equal to approximately 10.0% and 6.0%, respectively, of its total consolidated revenues for the year ended December 31, 2019).
The Company expects that a significant portion of its revenues and profits will continue to depend upon the licenses awarded to the Company by ADM. Licenses may be terminated prior to their expiration dates upon the occurrence of certain events of default affecting the Company, or if such licenses are deemed to be against the public interest, or terminated or annulled if successfully challenged by competitors. The law providing the extension of the license for instant tickets in Italy has been challenged from two operators (Sisal and Stanleybet) and the European Court of Justice ("ECJ") has been asked to express an opinion on the compatibility of that law within the E.U. law principles. In addition, the conditions for any new license will be established by law and included in the rules of the new license. Any material reduction in the Company’s revenues from these licenses, including as a result of an annulment, early termination, or non-renewal of these licenses following their expiration, could have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects. 
In addition, recurring revenues from the Company’s top 10 customers outside of Italy accounted for approximately 18.0% of its total consolidated revenues for the year ended December 31, 2019. If the Company were to lose any of these larger customers, or if these larger customers experience lower sales and consequently reduced revenues, which are primarily service revenues, there could be a material adverse effect on the Company’s results of operations, business, financial condition, or prospects.
The Company’s operations are dependent upon its continued ability to retain and extend its existing contracts and win new contracts
The Company derives a substantial portion of its revenues from its portfolio of long-term contracts in the North America Lottery and International segments (equal to approximately 32.0% of its total consolidated revenues for the year ended December 31, 2019), awarded through competitive procurement processes. In addition, the Company’s U.S. lottery contracts typically permit a lottery authority to terminate the contract at any time for material, uncured breaches and for other specified reasons out of the Company's control, such as the failure by a state legislature to approve the required budget appropriations, and many of these contracts in the U.S. permit the lottery authority to terminate the contract at will with limited notice and do not specify the compensation to which the Company would be entitled were such termination to occur.
In the event that the Company is unable or unwilling to perform certain lottery contracts, such contracts permit the lottery authority a right to use the Company's system-related equipment and software necessary for the performance of the contract until the expiration or earlier termination of the contract.
The termination of or failure to renew or extend one or more of the Company’s lottery contracts, or the renewal or extension of one or more of the Company’s lottery contracts on materially altered terms, could have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects.

8


Adverse changes in discretionary consumer spending may adversely affect the Company's business
Socio-political and economic factors that impact consumer confidence may result in decreased discretionary spending by consumers and have a negative effect on the Company's business. Unfavorable changes in social, political and economic conditions and economic uncertainties, as well as decreased discretionary spending by consumers, may adversely impact customers, suppliers and business partners in a variety of ways.
The revenue generated by the Company's business relies on players’ discretionary income and their level of gaming activity. Economic factors resulting in a reduction of such discretionary income could result in fewer lottery ticket sales and fewer patrons visiting casinos or engaging in online or digital gaming. A decline in discretionary income over an extended period could cause some of the Company’s customers to close casinos or other gaming operations, which would adversely affect the Company's business. A decline in casino visits may also have an adverse impact on the businesses of casino customers and their ability to purchase or lease products and services.
The Company is subject to substantial penalties for failure to perform
The Company’s Italian licenses, lottery contracts in the U.S. and in other jurisdictions, and other service contracts often require performance bonds or letters of credit to secure its performance under such contracts and require the Company to pay substantial monetary liquidated damages in the event of non-performance by the Company.
At December 31, 2019, the Company had outstanding performance bonds and letters of credit in an aggregate amount of approximately $1.173 billion. These instruments present a potential for expense for the Company and divert financial resources from other uses. Claims on performance bonds, drawings on letters of credit, and payment of liquidated damages could individually or in the aggregate have a material adverse effect on the Company's results of operations, business, financial condition, or prospects.
The Company’s inability to successfully complete and integrate future acquisitions could limit its future growth or otherwise be disruptive to its ongoing business
From time to time, the Company expects it will pursue acquisitions in support of its strategic goals. There can be no assurance that acquisition opportunities will be available on acceptable terms or at all or that the Company will be able to obtain necessary financing or regulatory approvals to complete potential acquisitions. The Company’s ability to succeed in implementing its strategy will depend to some degree upon the ability of its management to identify, complete and successfully integrate commercially viable acquisitions. Acquisition transactions may disrupt the Company’s ongoing business and distract management from other responsibilities. In connection with any such acquisitions, the Company could face significant challenges in managing and integrating its expanded or combined operations, including acquired assets, operations, and personnel.
Slow growth or declines in the lottery and gaming markets could lead to lower revenues for the Company
The Company’s dependence on large jackpot games and, specifically, the decline in aggregate sales at similar jackpot levels (“jackpot fatigue”) can have a negative impact on revenue from this game category. These developments may in part reflect increased competition for consumers’ discretionary spending, including from a proliferation of destination gaming venues and an increased availability of internet gaming opportunities. The Company’s future success will depend, in part, on the success of the lottery industry and the gaming industry in attracting and retaining new players in the face of such increased competition in the entertainment and gaming markets, as well as the Company's own success in developing innovative services, products and distribution methods/systems to achieve this goal. In addition, there is a risk that new products and services may replace existing products and services and the Company's customers might acquire or develop competencies that reduce their dependencies on the Company's product and services. The replacement of old products and services with new products and services may offset the overall growth of sales of the Company. A failure by the Company to achieve these goals could have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects.
The construction of new casinos or expansion of existing casinos fluctuates with demand, general economic conditions and the availability of financing. Slow growth in the establishment of new gaming jurisdictions, delays in the opening of new or expanded casinos and declines in, or low levels of demand for, machine replacements could reduce the demand for the Company’s products. Because a substantial portion of the Company’s sales come from existing customers, its business could be affected if one or more of its customers consolidates with another entity that uses more of the products and services of the Company’s competitors, reduces spending on the Company's products, or causes downward pricing pressures. Such consolidation could lead to order cancellations, a slowing in the rate of gaming machine replacements, or require the Company’s current customers to switch to its competitors’ products, any of which could negatively impact the Company’s results of operations, business, financial condition, or prospects.

9


Brexit has created uncertainty that could impact the Company's operations, business, financial condition, or prospects
The U.K. exited the E.U. on January 31, 2020, which commenced a transition period through December 31, 2020, during which the U.K. will continue to apply E.U. laws and regulations and the trading relationship between the U.K. and the E.U. will remain the same. Negotiations to determine the terms of trade and other arrangements between the U.K. and the E.U. following the conclusion of the transition period at the end of 2020 are expected to commence in March 2020. Uncertainty remains as to what terms, if any, may be approved during the transition period. Ongoing uncertainty regarding the status of such terms and the possibility of the U.K. and the E.U. ending the transition period without any agreement in place remains, which could result in further political and economic uncertainty in the U.K. and the E.U. that may impact the Company's global operations. Because the Company maintains significant operations in the E.U., the terms of Brexit following the transition period could also impact intercompany transactions and create new or additional tax liabilities. The Company’s ability to operate in Italy may be negatively impacted if the terms of Brexit following the transition period do not maintain parity rights for U.K. and E.U. companies and the current Italian regulatory framework is modified as a result of such terms. The Company continues to monitor Brexit and its potential impacts on the Company’s results of operations, business, financial condition, or prospects.

The effect of the coronavirus, or the perception of its effects, on our operations and the operations of our customers and suppliers could have a material adverse effect on our business, financial condition, results of operations or cash flows
We have been closely monitoring the outbreak of the coronavirus that originated in Wuhan, China. A significant duration and extent of the coronavirus outbreak and related government actions may impact many aspects of our business, including creating workforce limitations, travel restrictions and impacting our customers and suppliers. If a significant percentage of our workforce is unable to work, either because of illness or travel or government restrictions in connection with the coronavirus outbreak, our operations may be negatively impacted. The Company’s response strategy in areas of high impact, including Italy where the Company maintains a large employee base, may result in a temporary reduced workforce as a result of self-isolation or other government or Company imposed measures to quarantine impacted employees and prevent infections at the workplace.
In addition, the coronavirus may result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products and services. In particular, Italian authorities have implemented measures to try to halt the coronavirus outbreak including closures to public venues in the north of the country. The imposed government regulations could adversely impact the Company’s results of operations, business, financial condition, or prospects derived from its presence in this or other affected areas. Further, the outbreak of the coronavirus may negatively impact our suppliers and supply chain, which would likely impact our sales and operating results. Any of these events could have a material adverse effect on the Company’s business, financial condition, results of operations, or cash flows. At this point, the extent to which the coronavirus may impact our results is uncertain.

The Company’s success depends in large part on its ability to develop and manage frequent introductions of innovative products and the ability to respond to technological changes
The gaming industry is characterized by dynamic customer demand and technological advances, both for land-based and digital gaming products. As a result, the Company must continually introduce and successfully market new games and technologies to remain competitive and effectively stimulate customer demand. The process of developing new products is inherently complex and uncertain. It requires accurate anticipation of changing customer needs and end-user preferences as well as emerging technological trends. If the Company's competitors develop new game content and technologically innovative products and the Company fails to keep pace, its business could be adversely affected. To remain competitive, the Company invests resources toward its research and development efforts to introduce new and innovative games and technology with dynamic features to attract new customers and retain existing customers. If the Company fails to accurately anticipate customer needs and end-user preferences through the development of new products and technologies, the Company could lose business to its competitors, which would adversely affect its results of operations, business, financial condition, or prospects. The Company intends to continue investing resources in research and development. There is no assurance that its investments in research and development will guarantee successful products. The Company invests heavily in product development in various disciplines: platform hardware, platform software, digital services, content (game) design and casino software systems. Because the Company’s newer products are generally more technologically sophisticated than those it has produced in the past, the Company must continually refine its design, development, and delivery capabilities across all channels to ensure product innovation. If the Company cannot efficiently adapt its processes and infrastructure to meet the needs of its product innovations, its results of operations, business, financial condition, or prospects could be negatively impacted.
The Company’s customers will purchase new products only if such products are likely to increase profits more than the Company's competitors’ products. The amount of profits primarily depends on consumer play levels, which are influenced by player demand for the Company’s products. There is no certainty that the Company’s new products will attain this market acceptance or that the

10


Company’s competitors will not anticipate or respond to changing customer preferences more effectively than the Company. In addition, any delays by the Company in introducing new products could negatively impact its operating results by providing an opportunity for its competitors to introduce new products and gain market share.
Demand for and the level of play of the Company’s products could be adversely affected by changes in social mores
The popularity and acceptance of gaming is influenced by the prevailing social attitudes toward gaming, and changes in social attitudes could result in reduced acceptance of gaming as a leisure activity. The Company’s future financial success will depend on the appeal of its products to its customers and players and the general acceptance of gaming. If the Company is not able to anticipate and react to changes in consumer preferences and social attitudes, its results of operations, business, financial condition, or prospects may be adversely affected.
If the Company is unable to protect its intellectual property or prevent its unauthorized use by third parties, its ability to compete in the market may be harmed
The Company protects its intellectual property to ensure that its competitors do not use such intellectual property. However, intellectual property laws in the U.S., Italy, and in other jurisdictions may afford differing and limited protection, may not permit the Company to gain or maintain a competitive advantage, and may not prevent its competitors from duplicating its products, designing around its patented products, or gaining access to its proprietary information and technology.
The Company may not be able to prevent the unauthorized disclosure or use of its technical knowledge or trade secrets. For example, there can be no assurance that consultants, vendors, partners, former employees, or current employees will not breach their obligations regarding non-disclosure and restrictions on use. In addition, anyone could seek to challenge, invalidate, circumvent, or render unenforceable any of the Company's patents. The Company cannot provide assurance that any pending or future patent applications it holds will result in an issued patent, or that, if patents are issued, they would necessarily provide meaningful protection against competitors and competitive technologies or adequately protect the Company’s then-current technologies. The Company may not be able to detect the unauthorized use of its intellectual property, prevent breaches of its cybersecurity efforts, or take appropriate steps to enforce its intellectual property rights effectively. In addition, certain contractual provisions, including restrictions on use, copying, transfer, and disclosure of software, may be unenforceable under the laws of certain jurisdictions.
The Company’s success may depend in part on its ability to obtain trademark protection for the names or symbols under which it markets its products and to obtain copyright protection and patent protection of its technologies and game innovations. The Company may not be able to build and maintain goodwill in its trademarks or obtain trademark or patent protection, and there can be no assurance that any trademark, copyright, or issued patent will provide competitive advantages for the Company or that the Company’s intellectual property will not be successfully challenged or circumvented by competitors.
The Company intends to enforce its intellectual property rights, and from time to time may initiate claims against third parties that it believes are infringing its intellectual property rights. Litigation brought to protect and enforce the Company’s intellectual property rights could be costly, time-consuming, and distracting to management, could fail to obtain the results sought, and could have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects.
If the Company is unable to license intellectual property from third parties, its ability to compete in the market may be harmed
The Company licenses intellectual property rights from third parties. If such third parties do not properly maintain or enforce the intellectual property rights underlying such licenses, or if such licenses are terminated or expire without being renewed, the Company could lose the right to use the licensed intellectual property, which could adversely affect its competitive position or its ability to commercialize certain of its technologies, products, or services.
In addition, some of the Company’s most popular games and features are based on trademarks, patents and other intellectual property licensed from third parties. The Company’s future success may depend upon its ability to obtain, retain and/or expand licenses for popular intellectual property rights with reasonable terms in a competitive market. If the Company cannot renew and/or expand existing licenses, it may be required to discontinue or limit its use of the games or gaming machines that use the licensed technology or bear the licensed marks, which could have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects.

11


Third party intellectual property infringement claims against the Company could limit its ability to compete effectively
The Company cannot provide assurance that its products do not infringe the intellectual property rights of third parties. Infringement and other intellectual property claims and proceedings brought against the Company, whether successful or not, are costly, time-consuming and distracting to management, and could harm the Company's reputation. In addition, intellectual property claims and proceedings could require the Company to do one or more of the following: (1) cease selling or using any of its products that allegedly incorporate the infringed intellectual property, (2) pay substantial damages, (3) obtain a license from the third-party owner, which license may not be available on reasonable terms, if at all, (4) rebrand or rename its products, and (5) redesign its products to avoid infringing the intellectual property rights of third parties, which may not be possible and, if possible, could be costly, time-consuming, or result in a less effective product. A successful claim against the Company could have a material adverse effect on its results of operations, business, financial condition, or prospects.
The Company’s business may be adversely affected by lower cost of entry into the gaming industry
As a result of developments in digital and internet gaming, the cost of entry to the gaming market has decreased significantly. This results in a highly competitive environment. Digital and internet gaming have emerged as substantial methods of competition from existing competitors and, increasingly, new competitors as a result of the lower cost of entry. The increased competition may result in increased pricing pressures on a number of our products and services, and may impact the Company’s results and financial position.
The illegal gaming market could negatively affect the Company’s business
A significant threat to the gaming industry arises from illegal activities. Such illegal activities may drain significant betting volumes away from the regulated industry. In particular, illegal gaming could take away a portion of the present players that are the focus of the Company’s business. The loss of such players could have a material adverse effect on the Company's results of operations, business, financial condition, or prospects.
The Company faces reputational risks related to the use of social media
From time to time, the Company uses social media platforms as marketing tools. These platforms provide the Company, as well as individuals, with access to a broad audience of consumers and other interested persons. Negative commentary regarding the Company or the products it sells may be posted on social media platforms and similar devices at any time and may be adverse to the Company’s reputation or business.
Legal and Compliance Risks
Changing enforcement of the Wire Act may negatively impact the Company's operations, business, financial condition, or prospects
On January 14, 2019, the U.S. Department of Justice (the “DOJ”) published an opinion (the "2019 Opinion") reversing its previously-issued opinion (the "2011 Opinion") that the Wire Act, which prohibits several types of wager-related communications over a “wire communications facility,” was applicable only to sports betting. The 2019 Opinion interprets the Wire Act as applying to other forms of gambling that cross state lines, though the precise scope of the 2019 Opinion is unclear, and the DOJ has not yet addressed how it plans to enforce the Wire Act in light of the 2019 Opinion. Further, the New Hampshire Lottery Commission and certain private parties have commenced litigation in federal district court in New Hampshire challenging the 2019 Opinion. In response to this and other lawsuits, the DOJ issued a memorandum in April 2019 acknowledging that the 2019 Opinion did not consider whether the Wire Act applies to State lotteries and their vendors, and the DOJ is now considering this issue. In connection with such acknowledgment, the DOJ also extended the non-prosecution period for State lotteries and their vendors indefinitely while they consider the question. If the DOJ concludes that the Wire Act does apply to State lotteries and/or their vendors, they would extend the non-prosecution period for an additional period of 90 days after the DOJ publicly announces such position.
On June 3, 2019, the U.S. District Court for the District of New Hampshire ruled in favor of the plaintiffs and opined that the Wire Act applies only to sports betting and related activities (the “NH Decision”). The NH Decision also set aside the 2019 Opinion leaving the 2011 Opinion as the DOJ's only stated opinion on the subject. In response to the NH Decision, the DOJ extended the forbearance period to December 31, 2019; such forbearance period was further extended through June 30, 2020. The Lottery Forbearance remains unchanged. On August 16, 2019, the DOJ filed a Notice of Appeal with respect to the NH Decision. The DOJ filed its opening brief with the First Circuit Court of Appeal on December 20, 2019. Plaintiffs’ opening briefs are due February 26, 2020. It is unclear when the DOJ will conclude its consideration of whether the Wire Act applies to State lotteries and their vendors, or whether other courts would come to the same conclusions set forth in the NH Decision. The Company’s management

12


is evaluating the NH Decision, the 2019 Opinion, the DOJ appeal and their implications to the Company, its customers, and the industries in which the Company operates. If the Wire Act is broadly interpreted and enforced to prohibit activities in which the Company and its customers are engaged, the Company could be subject to investigations, criminal and civil penalties, sanctions and/or other remedial measures and/or the Company may be required to substantially change the way it conducts its business, any of which could have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects. 
The Company faces risks related to the extensive and complex governmental regulation applicable to its operations
The Company’s activities are subject to extensive and complex governmental regulation, including restrictions on advertising, increases in or differing interpretations by authorities on taxation, limitations on the use of cash, and anti-money laundering compliance procedures. In particular, the Italian government has recently banned gaming advertising and significantly raised gaming taxes. Any changes in the legal or regulatory framework or other changes, such as increases in the taxation of sports betting or gaming, changes in the compensation paid to licensees, or increases in the number of licenses, authorizations, or licenses awarded to the Company's competitors, could materially affect its profitability.
In addition, in the U.S. and in many international jurisdictions where the Company currently operates or seeks to do business, lotteries, sports betting, and gaming are not permitted unless expressly authorized by law. The successful implementation of the Company’s growth strategy and its business could be materially adversely affected if jurisdictions that do not currently authorize lotteries, sports betting, or gaming do not approve such activities or if those jurisdictions that currently authorize lotteries, sports betting, or gaming do not continue to permit such activities.
With respect to the Company’s use of social media, as laws and regulations rapidly evolve to govern the use of these platforms and mobile devices, the failure by the Company, its employees or third parties acting at the Company's direction to abide by applicable laws and regulations in the use of these platforms and devices could adversely impact the Company’s business, financial condition, and results of operations or subject it to fines or other penalties.
Investigations by governmental and licensing entities can result in adverse findings or negative publicity
From time to time, the Company is subject to extensive background investigations, and other investigations of various types are conducted by governmental and licensing authorities with respect to applicable gaming regulations. These regulations and investigations vary from time to time and from jurisdiction to jurisdiction where the Company operates. Because the Company’s reputation for integrity is an important factor in its business dealings with lottery and other governmental agencies, a governmental allegation or a finding of improper conduct by or attributable to the Company in any manner, the prolonged investigation of these matters by governmental or regulatory authorities, and/or the adverse publicity resulting therefrom could have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects, including its ability to retain existing contracts or to obtain new or renewed contracts, both in the subject jurisdiction and elsewhere.
Failure to comply with the GDPR could result in significant penalties

The GDPR came into effect on May 25, 2018, expanding the rules on using personal data and increasing the risks of processing personal data compared to prior legislation and introducing new obligations on data controllers and rights for data subjects, including, among others:

accountability and transparency requirements, which will require data controllers to demonstrate and record compliance
with the GDPR and to provide more detailed information to data subjects regarding processing;
enhanced data consent requirements, which includes "explicit" consent in relation to the processing of sensitive data;
obligations to consider data privacy as any new products or services are developed and limit the amount of information
collected, processed, and stored as well as its accessibility;
constraints on using data to profile data subjects;
providing data subjects with personal data in a usable format on request and erasing personal data in certain circumstances;
and
reporting of breaches without undue delay (72 hours where feasible).

Several of the Parent’s subsidiaries, particularly those within the Italy business segment, deal with a significant amount of employee and customer personal data. There is a risk that the Company's policies and procedures for compliance with the GDPR will not be implemented correctly or that individuals within the Company will not be fully compliant with the new procedures. Failure to comply with the GDPR may have serious financial consequences to the Company, including fines for data breaches of up to the maximum of either €20 million or 4% of worldwide annual revenue, and the Company could face significant administrative

13


sanctions and reputational damage that could have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects.

The Company is exposed to significant risks in relation to compliance with anti-corruption laws and regulations and economic sanction programs

Doing business on a worldwide basis requires the Company to comply with the laws and regulations of various jurisdictions. In particular, the Company's operations are subject to anti-corruption laws and regulations, such as the U.S. Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010 and other anti-corruption laws that apply in countries where the Company operates. Other laws and regulations applicable to the Company control trade by imposing economic sanctions on countries and persons and creating customs requirements and currency exchange regulations. The Company's continued global expansion, including in countries which lack a developed legal system or have high levels of corruption, increases the risk of actual or alleged violations of such laws.

The Company cannot predict the nature, scope or effect of future regulatory requirements to which its operations might be subject or the manner in which such laws might be administered or interpreted.

There can be no assurance that the policies and procedures the Company has implemented have been or will be followed at all times or will effectively detect and prevent violations of these laws by one or more of the Company's directors, officers, employees, consultants, agents, joint-venture partners or other third-party partners.  As a result, the Company could be subject to investigations, criminal and civil penalties, sanctions and/or other remedial measures that in turn could have a material adverse effect on its business, results of operations and financial condition.

Negative perceptions and publicity surrounding the gaming industry could lead to increased gaming regulation

From time to time, the gaming industry is exposed to negative publicity related to gaming behavior, gaming by minors, the presence of gaming machines in too many locations, risks related to digital gaming and alleged association with money laundering. Publicity regarding problem gaming and other concerns with the gaming industry, even if not directly connected to the Company, could adversely impact its business, results of operations, and financial condition. For example, if the perception develops that the gaming industry is failing to address such concerns adequately, the resulting political pressure may result in the industry becoming subject to increased regulation and restrictions on operations. Such an increase in regulation could adversely impact the Company's results of operations, business, financial condition, or prospects.
Recent and future changes to U.S. and foreign tax laws could adversely affect the Company
The Company is subject to tax laws in the U.S. and several foreign tax jurisdictions and significant judgment is required in determining the Company’s global provision for income taxes. While the Company believes its tax positions are consistent with the tax laws in the jurisdictions in which it conducts business, it is possible that these positions may be overturned by tax authorities, which may have a significant impact on the Company’s global provision for income taxes.
Changes in tax laws or regulations may be proposed or enacted that could significantly affect the Company’s overall tax expense. For example, on December 22, 2017, the U.S. government enacted comprehensive tax legislation through the Tax Act, which significantly changed the U.S. corporate income tax system and has a meaningful impact on the Company’s provision for income taxes. The Tax Act made broad changes to the U.S. federal income tax code, including reducing the federal corporate income tax rate from 35% to 21%, imposing limitations on the Company’s ability to deduct interest expense for tax purposes, creating a new minimum tax on GILTI, and creating BEAT, among many other complex provisions.
The Tax Act requires complex calculations to be performed that were not previously required, significant judgments, estimates and calculations to be made in interpreting its provisions, and the preparation and analysis of information not previously relevant or regularly produced. In addition, the U.S. Department of Treasury has issued and will continue to issue regulations and interpretive guidance that may significantly impact how the Company will apply the tax law and impact the Company’s results of operations. As additional regulatory and interpretive guidance is issued, the Company may refine its analysis and make adjustments that differ from amounts initially recorded, which could materially affect its tax obligations and effective tax rate. Various uncertainties also exist in terms of how U.S. states and any foreign countries within which the Company operates will react to U.S. federal income tax reform.
In addition, tax authorities are increasingly scrutinizing the tax positions of companies. Many countries in the E.U., as well as a number of other countries and organizations such as the Organization for Economic Cooperation and Development, are actively considering changes to existing tax laws that, if enacted, could increase the Company’s tax obligations in countries where it does

14


business. If U.S. or other foreign tax authorities change applicable tax laws, the Company’s overall taxes could increase, and its results of operations, business, financial condition, or prospects may be adversely affected.
The Company may be subject to an unfavorable outcome with respect to pending regulatory, tax, or other legal proceedings, which could result in substantial monetary damages or other harm to the Company
The Company is involved in a number of legal, regulatory, tax, and arbitration proceedings including claims by and against it as well as injunctions by third parties arising out of the ordinary course of its business and is subject to investigations and compliance inquiries related to its ongoing operations. It is difficult to estimate accurately the outcome of any proceeding. As such, the amounts of the Company’s provision for litigation risks could vary significantly from the amounts the Company may be asked to pay or ultimately pay in any such proceeding. In addition, unfavorable resolution of or significant delay in adjudicating such proceedings could require the Company to pay substantial monetary damages or penalties and/or incur costs that may exceed any provision for litigation risks or, under certain circumstances, cause the termination or revocation of the relevant license or authorization and thereby have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects.
Operational Risks
Failure to attract, retain and motivate personnel may adversely affect the Company's ability to compete
The Company's ability to attract and retain key management, product development, finance, marketing, and research and development personnel is directly linked to the Company's continued success. Particularly in the lottery and gaming industries, the market for qualified executives and highly-skilled technical workers is intensely competitive, and the loss of key employees or an inability to hire a sufficient number of technical staff could limit the Company's ability to develop successful products and could cause delays in getting new products to market.
The Company’s business prospects and future success rely heavily upon the integrity of its employees, directors and agents
The real and perceived integrity and security of the Company's products are critical to its ability to attract customers and players. The Company strives to set exacting standards of personal integrity for its employees and directors and its reputation in this regard is an important factor in its business dealings with lottery, gaming, and other governmental agencies. For this reason, an allegation or a finding of improper conduct on the Company’s part, or on the part of one or more of its current or former employees, directors or agents that is attributable to the Company, could have a material adverse effect upon the Company’s results of operations, business, financial condition, or prospects, including its ability to retain or renew existing contracts or obtain new contracts.
The success of the Company’s business is dependent on customers’ confidence in the integrity of the Company’s products
The real and perceived integrity of the Company’s products is critical to its ability to attract customers and players. In the event of an actual or alleged defect in a Company product, the Company’s existing and prospective customers may lose confidence in the integrity and security of the Company’s products. Such a failure could have a material adverse effect upon the Company’s results of operations, business, financial condition or prospects, including its ability to attract new customers and retain its existing customers.
The Company faces supply chain risks that, if not properly managed, could adversely affect its financial results
The Company purchases most of the parts, components, and subassemblies necessary for its lottery terminals and electronic gaming machines from outside sources. The Company outsources all the manufacturing and assembly of certain lottery terminals to a single vendor and portions of other products to multiple vendors. The Company’s operating results could be adversely affected if one or more of its manufacturing and assembly outsourcing vendors fails to meet production schedules. The Company’s management believes that if a supply contract with one of these vendors were to be terminated or breached, it may take time to replace such vendor under some circumstances and any replacement parts, components, or subassemblies may be more expensive, which could reduce the Company’s margins. Depending on a number of factors, including the Company’s available inventory of replacement parts, components or subassemblies, the time it takes to replace a vendor may result in a delay for a customer. Generally, if the Company fails to meet its delivery schedules under its contracts, it may be subject to substantial penalties or liquidated damages, or contract termination, which in turn could adversely affect the Company's results of operations, business, financial condition, or prospects.

15


The Company and its operations are subject to cyber-attacks and cyber-security risks which may have an adverse effect on its business and results of operations and result in increasing costs to minimize these risks
The Company's business involves the storage and transmission of confidential business and personal information, and theft and security breaches may expose the Company to a risk of loss of, or improper use and disclosure of, such information, which may result in significant litigation expenses and liability exposure. The Company has experienced and continues to experience cyber-attacks of varying degrees and phishing attacks on a regular basis. To date, the Company has not suffered any material losses as a result of such attacks. The Company's internal policies and procedures may not be able to prevent or detect every cyber-attack or reduce all negative effects they may cause. In addition, the Company's insurance policies may not be sufficient to mitigate all potential negative effects of a cyber-attack.
Any systems failure or compromise of the Company's security that results in the release of confidential business or personal information could seriously harm the Company's reputation and have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects.
The Company's security measures may also be breached due to employee error, malfeasance, system errors or vulnerabilities, including vulnerabilities of the Company's subcontractors, vendors, suppliers, or otherwise. Such breach could result in significant reputational, legal, and financial liability, and may potentially have a material adverse effect upon the Company’s business, results of operations and financial condition. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, become more sophisticated, and often are not recognized until launched against a target, the Company may be unable to anticipate these techniques or to implement adequate preventative measures. Additionally, cyber-attacks could also compromise trade secrets and other sensitive information and result in such information being disclosed to others and becoming less valuable, which could have a material adverse effect upon the Company’s results of operations, business, financial condition, or prospects.
Failures in technology may disrupt the Company’s business and have an adverse effect on its results of operations
The Company’s success depends on its ability to avoid, detect, replicate, and correct software and hardware defects and fraudulent manipulation of its products. The Company incorporates security features into the design of its products which are designed to prevent its customers and players from being defrauded. The Company also monitors its software and hardware to avoid, detect and correct any technical errors. However, there can be no guarantee that the Company’s security features or technical efforts will continue to be effective in the future.
In addition, any disruption in the Company’s network or telecommunications services, or those of third parties that the Company uses in its operations, could affect the Company’s ability to operate its systems, which could result in reduced revenues and customer downtime. The Company’s network and databases of business and customer information, including intellectual property and other proprietary business information and those of third parties the Company uses, are susceptible to outages due to fire, floods, power loss, break-ins, cyber-attacks, network penetration, data privacy or security breaches, denial of service attacks, and similar events, including inadvertent dissemination of information due to increased use of social media. Disruptions with such systems could result in a wide range of negative outcomes, including devaluation of the Company’s intellectual property, increased expenditures on data security, and costly litigation and potential payment of liquidated damages, each of which could have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects.
Financial Risks
Covenants in the Company’s debt agreements may limit its ability to operate its business, and the Company’s breach of such covenants could materially and adversely affect its results of operations, business, financial condition, or prospects
Certain of the Company’s debt agreements require it to comply with covenants that may limit the Company’s ability to:
pay dividends and repurchase shares;
acquire assets of other companies or acquire, merge or consolidate with other companies;
dispose of assets;
incur indebtedness; and
grant security interests in its assets.
The Company’s ability to comply with these covenants may be affected by events beyond its control, such as prevailing economic, financial, regulatory and industry conditions. These covenants may limit its ability to react to market conditions or take advantage of potential business opportunities. Further, a breach of such covenants could, if not cured or waived, result in acceleration of its indebtedness, result in the enforcement of security interests or force the Company into bankruptcy or liquidation. Such a breach

16


or any failure to otherwise timely repay outstanding indebtedness could have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects.
Risks related to the Loyalty Voting Structure
The Parent's controlling shareholder and loyalty voting structure may limit other shareholders' ability to influence corporate decisions
At February 24, 2020, De Agostini had an economic interest of approximately 50.59% and, due to its election to exercise the special voting shares associated with its ordinary shares pursuant to the loyalty plan, a voting interest in the Parent of approximately 67.18% of the total voting rights. See “Item 7. Major Shareholders and Related Party Transactions” for additional information.  This shareholder may make decisions with which other shareholders may disagree, including, among other things, delaying, discouraging, or preventing a change of control of the Company or a potential merger, consolidation, tender offer, takeover, or other business combination and may also prevent or discourage shareholders’ initiatives aimed at changes in the Parent’s management.
The tax consequences of the loyalty voting structure are uncertain
No statutory, judicial, or administrative authority has provided public guidance in respect of the special voting shares of the Parent and as a result, the tax consequences of owning such shares are uncertain. The fair market value of the Parent's special voting shares, which may be relevant to the tax consequences of owning, acquiring, or disposing of such shares, is a factual determination and is not governed by any guidance that directly addresses such a situation. Because, among other things, (i) the special voting shares are not transferable (other than in very limited circumstances as provided for in the loyalty voting structure), (ii) on a winding up or otherwise, the holders of the special voting shares will only be entitled to receive out of the Parent's assets available for distribution to its shareholders, in aggregate, $1, and (iii) loss of the entitlement to instruct the nominee on how to vote in respect of special voting shares will occur without consideration, the Parent believes and intends to take the position that the value of each special voting share is minimal. However, the relevant tax authorities could assert that the value of the special voting shares as determined by the Parent is incorrect. Shareholders are urged to consult their own tax advisors with respect to treatment of special voting shares. See “Item 10.E Taxation” for additional information. 
The loyalty voting structure may affect the liquidity of the Parent's ordinary shares and reduce their ordinary share price

The loyalty voting structure may limit the liquidity and adversely affect the trading prices of the Parent's ordinary shares. The loyalty voting structure is intended to reward shareholders for maintaining long-term share ownership by granting persons holding ordinary shares continuously for at least three years the option to elect to receive special voting shares. The special voting shares cannot be traded and, immediately prior to the deregistration of ordinary shares from the register of loyalty shares, any corresponding special voting shares shall cease to confer any voting rights in connection with such special voting shares. This loyalty voting structure is designed to encourage a stable shareholder base, but it may deter trading by those shareholders who are interested in gaining or retaining the special voting shares. Therefore, the loyalty voting structure may reduce liquidity in the Parent's ordinary shares and adversely affect their trading price.


17


Item 4. 
Information on the Company
A.
History and Development of the Company
The Parent is organized as a public limited company under the laws of England and Wales. The Parent’s principal office is located at 66 Seymour Street, 2nd Floor, London W1H 5BT, United Kingdom, telephone number +44 (0) 207 535 3200. The Parent’s agent for service in the United States is CT Corporation System, 701 S. Carson Street - Suite 200, Carson City, Nevada 89701 (telephone number: +1 518 433 4740). The Company operates under the Companies Act 2006, as amended.
The Parent was formed as a business combination shell company on July 11, 2014 under the name “Georgia Worldwide Limited.” On September 16, 2014, it changed its name to “Georgia Worldwide PLC,” and on February 26, 2015, it changed its name to “International Game Technology PLC.”
The Company is a product of the acquisition of International Game Technology by GTECH S.p.A., which was completed on April 7, 2015, through mergers of the prior businesses into the Parent and a subsidiary of the Parent. Prior to the mergers, the Parent did not conduct any material activities other than those incident to its formation, the making of certain required securities law filings, and the preparation of the proxy statement/prospectus filed in connection with the acquisition and mergers. For more information on the mergers, please see Item 4.A of the Parent's annual report on Form 20-F for 2015, filed with the SEC on April 29, 2016.
Capital Expenditures and Divestitures
For a description, including the amount invested, of the Company’s principal capital expenditures (including interests in other companies) for the years ended December 31, 2019, 2018 and 2017, see “Item 5.B Liquidity and Capital Resources—Capital Expenditures.”
For a description of the Company’s principal divestitures for the years ended December 31, 2019 and 2018, see “Item 5.A Operating Results.” In 2017, the Company's principal divestiture was the sale of Double Down Interactive LLC for total cash consideration of $825.8 million ($823.8 million net of cash divested), which resulted in a gain of $27.2 million, net of selling costs, which is classified within other operating expense, net in the consolidated statement of operations for the year ended December 31, 2017.
To date, the Company has not made any capital expenditures or divestitures in calendar year 2020 that were not in the ordinary course of business.
More Information
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 http://www.sec.gov. The Company's SEC filings can be found there and on the Company's website: www.igt.com.
B. Business Overview

The Company is a global leader in gaming that delivers entertaining and responsible gaming experiences for players across all channels and regulated segments, from Gaming Machines and Lotteries to Sports Betting and Digital. Leveraging compelling content, substantial investment in innovation, player insights, operational expertise, and leading-edge technology, the Company's solutions deliver gaming experiences that engage players and drive growth. The Company has a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and creates value by adhering to the highest standards of service, integrity, and responsibility.
The Company operates and provides an integrated portfolio of innovative gaming technology products and services, including: lottery management services, online and instant lottery systems, gaming systems, instant ticket printing, electronic gaming machines, sports betting, digital gaming, and commercial services. The Company is headquartered in London, with principal operating facilities located in Providence, Rhode Island; Las Vegas, Nevada; and Rome, Italy. The Company is organized into four business segments, which are supported by corporate shared services: North America Gaming and Interactive, North America Lottery, International, and Italy. Research and development and product assembly are mostly centralized in North America. The Company had approximately 12,000 employees at December 31, 2019.


18


The Company is committed to responsible gaming, giving back to its communities, and doing its part to protect the environment, and is recognized in the following ways:

the Company’s lottery operations have been certified for compliance with the World Lottery Association ("WLA") Associate Member CSR Standards and Certification Framework;
the Company has received responsible gaming accreditation for its land-based casino and lottery segments from the Global Gambling Guidance Group;
the Company’s B2C website interactive.IGTGames.com is certified through the Internet Compliance Assessment Program (iCAP), developed by the National Council on Problem Gambling;
the Company’s digital and gaming operations both achieved RG accreditation from the Global Gambling Guidance Group;
the Company has received an "AA" environmental, social and governance rating from MSCI, Inc. and a "prime" designation in corporate responsibility from ISS-oekom; and
the Company has been selected for inclusion in the Bloomberg Gender Equality Index.

Products and Services

The Company has five broad categories of products and services: (1) Lottery, (2) Machine Gaming, (3) Sports Betting, (4) Digital, and (5) Commercial Services.

1. Lottery

The Company supplies a unique set of lottery solutions to more than 100 customers worldwide, including to 37 of the 46 U.S. lotteries through its NALO segment. Lottery customers frequently designate their revenues for particular purposes, such as education, economic development, conservation, transportation, programs for senior citizens and veterans, health care, sports facilities, capital construction projects, cultural activities, tax relief, and others. Many governments have become increasingly dependent on their lotteries as revenues from lottery ticket sales are often a significant source of funding for these programs. Lottery products and services are provided through the NALO, International, and Italy business segments.

Lottery services are provided through operating contracts, facilities management contracts ("FMCs"), lottery management agreements ("LMAs"), and product sales contracts. In the majority of jurisdictions, lottery authorities award contracts through a competitive bidding process. Typical service contracts are five to 10 years in duration, often with multi-year extension options. After the expiration of the initial or extended contract term, a lottery authority generally may either seek to negotiate further extensions or commence a new competitive bidding process. Lottery authorities may require providers to pay an upfront fee for the right to manage their lotteries.

The Company designs, sells, leases, and operates a complete suite of point-of-sale machines that are electronically linked with a centralized transaction processing system that reconciles lottery funds between the retailer and the lottery authority. The Company provides and operates highly secure, online lottery transaction processing systems that are capable of processing over 500,000 transactions per minute. The Company provides more than 450,000 point-of-sale devices to lottery customers and lotteries that it supports worldwide. The Company also produces high-quality instant ticket games and provides printing services such as instant ticket marketing plans and graphic design, programming, packaging, shipping, and delivery services.

The Company has developed and continues to develop new lottery games, licenses new game brands from third parties, and installs a range of new lottery distribution devices, all of which are designed to drive responsible same-store sales growth for its customers. In connection with its delivery of lottery services, the Company actively advises its customers on growth strategies. Depending on the type of contract and the jurisdiction, the Company also provides marketing services, including retail optimization and lottery brand awareness campaigns. The Company works closely with its lottery customers and retailers to help retailers sell lottery games more effectively. These programs include product merchandising and display recommendations, a selection of appropriate lottery product mix for each location, and account reviews to plan lottery sales growth strategies. The Company leverages years of experience accumulated from being the exclusive licensee for the Italian Lotto, one of the world’s largest lotteries. This B2C expertise in Italy, which includes management of all the activities along the lottery value chain, allows the Company to better serve B2B customers in its NALO and International segments. The Company's primary competitors in the Lottery business include Camelot, Intralot, Pollard, SAZKA, Scientific Games, Sisal and Tattersalls.


19


The primary types of lottery agreements are outlined below:

Operating and Facilities Management Contracts

The majority of the Company's revenue in the Lottery business comes from operating contracts and FMCs. Since 1998, the Company has been the exclusive licensee for the Italian Lotto game (management of operations commenced in 1994). Beginning in November of 2016, the Company's exclusive license for the Italian Lotto includes partners as part of a joint venture. Lottoitalia s.r.l., a joint venture company among Lottomatica, Italian Gaming Holding a.s., Arianna 2001, and Novomatic Italia ("Lottoitalia"), is the exclusive manager of the Italian Lotto game. Lottoitalia is 61.5% owned by Lottomatica. The Company, through Lottoitalia, manages the activities along the lottery value chain, such as creating games, determining payouts, collecting wagers through its network, paying out prizes, managing all accounting and other back-office functions, running advertising and promotions, operating data transmission networks and processing centers, training staff, providing retailers with assistance, and supplying materials including play slips, tickets and receipts, and marketing and point-of-sale materials for the game. Since 2004, and for a term expiring in 2028, the Company also has been the exclusive licensee for the instant ticket lottery ("Gratta e Vinci") through Lotterie Nazionali S.r.l., a joint venture 64.0% owned by the Parent's subsidiary Lottomatica Holding, with the remainder directly and indirectly owned by Scientific Games Corporation and Arianna 2001.

The Company’s FMCs typically require the Company to design, install, and operate the lottery system and retail terminal network for an initial term, which is typically five to 10 years. The Company’s FMCs usually contain extension options under the same or similar terms and conditions, generally ranging from one to five years. Under a typical FMC, the Company maintains ownership of the technology and equipment, and is responsible for capital investments throughout the duration of the contract, although the investments are generally concentrated during the early years. The Company provides a wide range of services to lottery customers related to the technology, equipment, and facilities such as hosting, maintenance, marketing, and other support services. The Company generally provides its lottery customers retailer terminal and communication network equipment through operating leases. In return, the Company typically receives fees based upon a percentage of the sales of draw based and/or instant ticket games. In limited instances, the Company provides instant tickets and online lottery systems and services under the same facilities management contract. As of February 24, 2020, the Company had FMCs with 24 U.S. states. As of December 31, 2019, the Company's largest FMCs in the U.S., by annual revenue, were Texas, California, New York, Florida and Michigan, and the revenue weighted-average remaining term of the Company's existing U.S. FMCs was 6.8 years (8.0 years including available extensions). Also, as of February 24, 2020, the Company operated under operating contracts or FMCs in 17 international jurisdictions, excluding Italy.

Operating contracts and FMCs often require the Company to pay substantial monetary liquidated damages in the event of non-performance by the Company. The Company's revenues from operating contracts and FMCs are generally service fees paid to the Company directly from the lottery authority based on a percentage of such lottery’s wagers or ticket sales. The Company categorizes revenue from operating contracts and FMCs as service revenue from "Operating and Facilities Management Contracts" as described in "Notes to the Consolidated Financial Statements—3. Revenue Recognition" included in "Item 18. Financial Statements".

Lottery Management Agreements

A portion of the Company’s revenues are derived from LMAs. Under an LMA, the Company manages, within parameters determined by the lottery customer, the core lottery functions, including the lottery systems and the majority of the day-to-day activities along the lottery value chain. This includes collecting wagers, managing accounting and other back-office functions, running advertising and promotions, operating data transmission networks and processing centers, training staff, providing retailers with assistance, and supplying materials for the games. LMAs also include a separate supply agreement, pursuant to which the Company leases certain hardware and equipment, and provides access to software and support services. The Company provides lottery management services in New Jersey as part of a joint venture and in Indiana through a wholly-owned subsidiary of the Parent. The Company's revenues from LMAs are based on achievement of contractual metrics and, with respect to the supply agreements, are based generally on a percentage of wagers. The Company categorizes revenue from LMAs as service revenue from "Lottery Management Agreements" as described in "Notes to the Consolidated Financial Statements—3. Revenue Recognition" included in "Item 18. Financial Statements".

Instant Ticket Printing Contracts

As an end-to-end provider of instant tickets and related services, the Company produces high-quality instant ticket games and provides ancillary printing services such as instant ticket marketing plans and graphic design, programming, packaging, shipping, and delivery services. Instant tickets are sold at numerous types of retail outlets but most successfully in grocery and convenience stores.


20


Instant ticket contracts are priced based on a percentage of ticket sales revenues or on a price per unit basis and generally range from two to five years with extension opportunities. Government-sponsored lotteries grant printing contracts on both an exclusive and non-exclusive basis where there is typically one primary vendor and one or more secondary vendors. A primary contract permits the vendor to supply the majority of the lottery’s ticket printing needs and includes the complete production process from concept development through production and shipment. It also typically includes marketing and research support. A primary printing contract can include any or all of the following services: warehousing, distribution, telemarketing, and sales/field support. A secondary printing contract includes providing backup printing services and alternate product sources. It may or may not include a guarantee of a minimum or maximum number of games. As of February 24, 2020, the Company provided instant ticket printing products and services to 33 customers in North America and 26 customers in international jurisdictions. The Company categorizes revenue from instant ticket printing contracts, that are not part of an operator or LMA contract, as product revenue from "Systems and other Product sales" as described in "Notes to the Consolidated Financial Statements—3. Revenue Recognition" included in "Item 18. Financial Statements". The instant ticket production business is also highly competitive and subject to strong, price-based competition.

Product Sales and Services Contracts

Under product sales and services contracts, the Company assembles, sells, delivers, and installs turnkey lottery systems or lottery equipment, provides related services, and licenses related software. The lottery authority maintains, in most instances, responsibility for lottery operations. The Company sells additional machines and central computers to expand existing systems and/or replace existing equipment and provides ancillary maintenance and support services related to the systems, equipment sold, and software licensed. The Company categorizes revenue from product sales and services contracts on a case-by-case basis as either service or product revenue from "Other Services" or "Systems and other Product Sales", respectively," as described in "Notes to the Consolidated Financial Statements—3. Revenue Recognition" included in "Item 18. Financial Statements".

2. Machine Gaming
 
The Company designs, develops, assembles and provides cabinets, games, systems and software for customers in regulated gaming markets throughout the world under fixed fee, participation and product sales contracts. The Company holds more than 450 global gaming licenses and does business with commercial casino operators, tribal casino operators, and governmental organizations (primarily consisting of Lottery operators). Machine gaming products and services are provided through the NAGI, NALO, International, and Italy business segments.

The Company’s primary global competitors in Machine Gaming are American Gaming Systems, Aristocrat, Everi, Euro Games Technology, Konami, Novomatic, and Scientific Games.

Gaming Machines and Game Content

The Company offers a diverse range of gaming machine cabinets from which land-based casino customers can choose to maximize functionality, flexibility, and player comfort. In addition to cabinets, the Company develops a wide range of casino games taking into account local jurisdictional requirements, market dynamics, and player preferences. The Company combines elements of math, play mechanics, sound, art, and technological advancements with a library of entertainment licenses and a proprietary intellectual property portfolio to provide gaming products designed to provide a high degree of player appeal and entertainment.  The Company offers a wide array of casino-style games in a variety of multi-line, multi-coin and multi-currency configurations.

The Company's casino games typically fall into two categories: premium games and core games.
  
Premium games include:

Wide Area Progressives - games that are linked across several casinos and/or jurisdictions and share a large common jackpot, including The Wheel of Fortune® franchise; and
Multi-Level Progressives - games that are linked to a number of other games within the casino itself and offer players the opportunity to win different levels of jackpots, such as Fortune Coin™ Boost.

Core games, which include video reel, mechanical reel, and video poker, are typically sold and in some situations leased to customers.


21


The Company produces other types of games including:
 
"Centrally Determined" games which are games connected to a central server that determines the game outcome;
Class II games which are electronic video bingo machines that can be typically found in North American tribal casinos and certain other jurisdictions like South Africa; and
Random-number-generated and live dealer electronic table games, including baccarat and roulette.

Gaming service revenue is primarily generated through providing premium game content and cabinets on short duration leases to customers. The pricing of these arrangements is largely variable where the casino customer pays fees to the Company based on a percentage of amounts wagered, net win, or a daily fixed fee for use of the game content, cabinets, and related support services.
 
Machine gaming product sales revenues are generated from the sales of land-based gaming machines (equipment and game content), systems, component parts (including game conversion sales), other equipment and services. The Company categorizes revenue from gaming machines as product revenue from "Gaming Machines" and revenue from game content as product revenue from "Systems and other Product Sales" as described in "Notes to the Consolidated Financial Statements—3. Revenue Recognition" included in "Item 18. Financial Statements".

Video Lottery Terminals ("VLT") and Amusement with Prize Machines ("AWP")

The Company provides VLTs, VLT central systems and VLT games worldwide. VLTs are usually connected to a central system. In addition, the Company provides AWPs and games to licensed operators in Italy and the rest of Europe. AWPs are typically low-denomination gaming machines installed in retail outlets.

With respect to the Company's machine gaming licenses in Italy, the Company directly manages, and controls throughout the period of use, stand-alone AWPs, as well as VLTs that are installed in various retail outlets and linked to a central system. The Company also provides systems and machines to other machine gaming licensees, either as a product sale or with long-term, fee-based contracts where the service revenue earned is generally based on a percentage of wagers, net of applicable gaming taxes. Due to the nature of the transactions, North America Lottery and International generally categorize revenue from VLTs as product revenue from "Lottery product" or as service revenue from "Machine gaming" and Italy categorizes revenue from VLTs as service revenue from "Machine gaming" as described in "Notes to the Consolidated Financial Statements—3. Revenue Recognition" included in "Item 18. Financial Statements".

Gaming Management Systems
 
The Company offers a comprehensive range of system modules and applications for all areas of casino management. Gaming systems products include infrastructure and applications for casino management, customer relationship management, patron management, and server-based gaming. The Company's main casino management system offering is the Advantage® System, which offers solutions and modules for a wide-range of activities from accounting and payment processing to patron management and regulatory compliance.

The Company's systems feature customized player messaging, tournament management, and integrated marketing and business intelligence modules that provide analytical, predictive, and management tools for maximizing casino operational effectiveness. The server-based solutions enable electronic game delivery and configuration for slot machines, as well as providing casino operators with opportunities to increase profits by enhancing the players’ experience, connecting with players interactively, and creating operational efficiencies. Service Window enables operators to market to customers more effectively by leveraging an additional piece of hardware onto existing machines for delivering in-screen messaging. The Company's systems portfolio also extends to encompass mobile solutions such as the Cardless Connect™ app, which offers a cardless, cashless loyalty solution for casino players. Mobile solutions that drive efficiencies and enable floor monitoring for operators while decreasing response time to player needs include Mobile Host, Mobile Responder, and Mobile Notifier. The Company categorizes revenue from gaming management systems as product revenue from "Systems and other Product sales" as described in "Notes to the Consolidated Financial Statements—3. Revenue Recognition" included in "Item 18. Financial Statements".
 

22


3. Sports Betting
 
In Italy, the Company is a licensee for the operation of direct to consumer retail and internet-based sports betting. Specifically, the Company:

operates an expansive land-based B2C sports betting network through its “Better” brand on a fixed odds or pari-mutuel basis;
establishes odds and assumes the risks related to fixed-odds sports contracts;
collects the wagers; and
makes the payouts.

The Company offers Italian consumers betting on sports events (including basketball, horse racing, soccer, cycling, downhill skiing, cross country skiing, tennis, sailing, and volleyball), motor sports (car and motorcycle racing), non-sports events connected with the world of entertainment, music, culture, and current affairs of primary national and international interest, as well as Virtual (computer generated) events.
The Company also provides sports betting technology and management services to licensed sports betting operators in eleven states in the U.S. through both the NAGI and NALO business segments. The Company does not operate direct to consumer sports betting in the U.S.
The Company offers a combination of technology and services to U.S. licensed sports book operators in each state where sports betting is legal. The offering may be different in each market in order to comply with local regulations and market conditions. The Company currently packages services in two ways:
“software as a service” solutions offering modular services hosted and maintained in each U.S. state or tribal jurisdiction where Sports Betting is legal. These solutions provide the technology requirement for companies wishing to operate for themselves land-based (retail), digital and mobile fixed odds and pari-mutuel sports wagering, including trading and risk management tools, point of sale, websites, mobile apps and player account management software; and,
“turnkey” managed service solutions which combine the Company’s end-to-end sports betting management technology with a portfolio of value-added services including offer management, patron support, payments, fraud management, and other advisory functions to support operations by land-based, digital and omni-channel sports betting operators.

The Company also manufactures and sells a range of retail point of sale products for use by its sports betting customers in the U.S. which includes a variety of self-service kiosks and over the counter betting solutions.
Sports betting operators who are customers of the Company in the U.S. include: FanDuel (Flutter plc), PointsBet, FoxBet (Stars Group), Delaware North and the Rhode Island Lottery. The Company’s primary competitors in the U.S. sports betting market include Scientific Games, Kambi and SBTech.
The Company’s primary competitors in B2C Sports Betting in Italy are Bet365, Betfair/PaddyPower, Eurobet, Sisal, SNAITECH, and William Hill.

The Company categorizes revenue from sports betting as service revenue from "Other services" as described in "Notes to the Consolidated Financial Statements—3. Revenue Recognition" included in "Item 18. Financial Statements".

4. Digital

Digital gaming and lottery (or iGaming) enables game play via the internet for real money or for fun (social). The Company designs, assembles, and distributes a full suite of configurable products, systems, contents and services and holds more than 20 licenses that authorize the provision of digital gaming products and services worldwide. In Italy, the Company acts as both a complete internet gaming operator and mobile casino, sports betting and poker operator. The Company's digital products include poker, bingo, and online casino table and slot games with features such as single and multiplayer options with branded titles and select third-party content. The Company provides social casino content as part of a multi-year strategic partnership with DoubleU Games. The Company’s complete suite of PlayLottery solutions, services, and professional expertise allows lotteries to fully engage their players on any digital channel in regulated markets. Existing lottery game portfolios are extended to the digital channel to provide a spectrum of engaging content such as eInstant tickets.

23


 
The Company’s iGaming systems and digital platforms offer customers an integrated system that provides player account management, advanced marketing and analytical capabilities, and a highly reliable and secure payment system. IGT Connect™ integrates third-party player account management systems, third-party game engines, and regulatory systems. The Company also offers a remote game server, which is a fast gateway to extensive casino and eInstant content, and digital and social gaming services that enhance player experiences and create marketing opportunities around either the Company's games or third-party games.

The Company's diverse iGaming B2B customer base (more than 150 operators) includes Caesar's Entertainment, the Georgia Lottery, and William Hill, among others. Digital and social gaming products and services are provided through the NAGI, NALO, International, and Italy business segments. The Company faces competition from operators, such as 888 Holdings and bwin.party, and broad-based traditional B2B providers, such as Playtech plc and Microgaming. The Company also faces competition in the digital space from other machine gaming suppliers, such as Scientific Games. In sports betting, the Company faces competition from other specialist B2C providers such as Kambi PLC.

The Company categorizes revenue from digital products as product revenue from "Systems and other Product sales" and categorizes revenue from digital services as service revenue from "Other services" as described in "Notes to the Consolidated Financial Statements—3. Revenue Recognition" included in "Item 18. Financial Statements".
 
5. Commercial Services
 
The Company develops innovative technology to enable lotteries to offer commercial services over their existing lottery infrastructure or over standalone networks separate from the lottery. Leveraging its distribution network and secure transaction processing experience, the Company offers high-volume processing of commercial transactions including: prepaid cellular telephone recharges, bill payments, e-vouchers and retail-based programs, electronic tax payments, stamp duty services, prepaid card recharges, and money transfers. These services are primarily offered outside of North America. In Italy, the Company's commercial payment and eMoney services network comprises points-of-sale divided among the primary retailers of lottery products: tobacconists, bars, petrol stations, newspaper stands, and motorway restaurants. The Company categorizes revenue from commercial services as service revenue from "Other services" as described in "Notes to the Consolidated Financial Statements—3. Revenue Recognition" included in "Item 18. Financial Statements".

Business Segment Revenue

Revenues for the Company by business segment are as follows:
 
 
For the year ended December 31,
($ thousands)
 
2019
 
2018
Service revenue
 
619,265

 
624,476

Product sales
 
451,382

 
378,693

North America Gaming and Interactive
 
1,070,647

 
1,003,169

 
 
 
 
 
Service revenue
 
1,072,383

 
1,111,069

Product sales
 
92,816

 
80,833

North America Lottery
 
1,165,199

 
1,191,902

 
 
 
 
 
Service revenue
 
460,307

 
495,497

Product sales
 
379,881

 
324,486

International
 
840,188

 
819,983

 
 
 
 
 
Service revenue
 
1,708,069

 
1,814,549

Product sales
 
981

 
930

Italy
 
1,709,050

 
1,815,479

 
 
 
 
 
Other
 
722

 
723

 
 
 
 
 
Total revenue
 
4,785,806

 
4,831,256

  

24


For a further description of the principal services and products the Company provides by business segment, including a breakdown of the Company's revenues by geographic market, see “Item 5.A Operating and Financial Review and Prospects—Operating Results” and “Notes to the Consolidated Financial Statements—19. Segment Information.”
Seasonality
In general, the Company’s business is not materially affected by seasonal variation. However, in the sports betting business, the volume of bets that are collected over the year can be affected by the schedules of sporting events and the particular season of such sports. The volume of bets collected may also be affected by schedules of significant sporting events that occur at regular, but infrequent, intervals, such as the FIFA Football World Cup. In the lottery business, lottery consumption and gaming may decrease over the summer months due to the tendency of consumers to be on vacation during that time. Seasonal gaming trends generally show higher play levels in the spring and summer months and lower levels in the fall and winter months. Gaming product sales may be uneven throughout the year, and can be affected by factors including the timing of large transactions and new casino openings.
Source of Materials
The Company uses a variety of raw materials to assemble gaming devices (e.g., metals, wood, plastics, glass, electronic components, and LCD screens). Moreover, there is significant paper, toner, and ink consumption in the Company's offices and at our two ticket printing facilities. A large portion of the materials used involve packaging, most of which is cardboard and paper.
Management believes that adequate supplies and alternate sources of the Company’s principal raw materials are available, and does not believe that the prices of these raw materials are especially volatile. The Company generally has global material suppliers and uses multi-sourcing practices to promote component availability.
Product Development
The Company devotes substantial resources to research and development and incurred $266.2 million and $263.3 million of related expenses in 2019 and 2018, respectively. The Company's research and development efforts cover multiple creative and engineering disciplines for its lottery and gaming businesses, including creative game content, hardware, and software; and land-based, online social, and digital real-money applications. These products are created primarily by employee designers, engineers, and artists, as well as third-party content creators. Third-party technologies are used to improve the yield from development investment and concentrate increased resources on product differentiation engineering.
Product assembly operations primarily involve the configuration and assembly of electronic components, cables, harnesses, video monitors, and prefabricated parts purchased from outside sources.
Intellectual Property
The Company’s intellectual property (“IP”) portfolio of patents, trademarks, copyrights, and other licensed rights is significant. At December 31, 2019, the Company held 4,686 patents and 8,034 trademarks filed and registered worldwide. The Company's IP portfolio is widely diversified with patents related to a variety of products, including game designs, bonus and secondary embedded game features, device components, systems features, and web-based or mobile functionality. The Company also relies on trade secret protection, believing that its technical “know-how” and the creative skills of its personnel are of substantial importance to its success.
Most of the Company’s products are marketed under trademarks and copyrights that provide product recognition and promote widespread acceptance. The Company seeks protection for its copyrights and trademarks in the U.S. and various foreign countries, where applicable, and uses IP assets offensively and defensively to protect its innovation. The Company also has a program where it licenses its patents to others under terms designed to promote standardization in the gaming industry.
In addition, some of the Company’s most popular games and features, including Wheel of Fortune®, are based on trademarks, patents and/or other intellectual property licensed from third parties. The Company routinely obtains, retains, and expands licenses for popular intellectual property.
Software Development
The Company has developed software for use in the management of a range of lottery, gaming, and betting functions and products, including leveraging integration with third-party software components. Software developed by the Company is used in a variety

25


of applications including (i) in centralized systems for the management of lotteries, machine gaming and betting, and other commercial services; (ii) to enhance functions connected to services provided through websites and mobile applications including lotteries, sports betting, instant win, and casino style games; and (iii) in a variety of back-office functions. Software developed by the Company is also used in machines for: management of lotteries, machine gaming, betting and online payments; provision of gaming and non-gaming content; and integration with other devices such as mobile phones and tablets.
Regulatory Framework
The gaming and lottery industries are subject to extensive and evolving governmental regulation in the U.S. and other jurisdictions. Gaming laws are based upon declarations of public policy designed to ensure that gaming is conducted honestly, competitively and free of criminal and corruptive elements. While the regulatory requirements vary from jurisdiction to jurisdiction, the majority typically require some form of licensing or regulatory suitability of operators, suppliers, manufacturers and distributors as well as their major shareholders, officers, directors and key employees. Regulators review many aspects of an applicant including financial stability, integrity and business experience. Additionally, the Company’s gaming products and technologies require certification or approval in most jurisdictions where the Company conducts business.
A comprehensive network of internal and external resources and controls is required to achieve compliance with the broad governmental oversight of the Company’s business. The Company has a robust internal compliance program to ensure compliance with applicable requirements imposed in connection with its gaming and lottery activities, as well as legal requirements generally applicable to all publicly traded companies. The Company employs more than 150 people to support global compliance which is directed on a day-to-day basis by the Company’s Senior Vice President, Chief Compliance and Risk Management Officer. Legal advice is provided by attorneys from the Company’s legal department as well as outside experts. The compliance program, accountable to the Parent’s board of directors, is overseen by the Global Compliance Governance Committee, which comprises employee and nonemployee directors and a non-employee gaming law expert. Through these efforts, the Company seeks to assure both regulators and investors that all its operations maintain the highest levels of integrity.
Gaming
The assembly, sale and distribution of gaming devices, equipment, and related technology and services are subject to federal, state, tribal, and local regulations in the U.S. and foreign jurisdictions. The initial regulatory requirement in most jurisdictions is to obtain the privileged licenses that allow the Company to participate in gaming activities. The Company’s operating entities and key personnel have obtained or applied for all known government licenses, permits, registrations, findings of suitability, and approvals necessary to assemble, distribute and/or operate gaming products in all jurisdictions where it does business. Although many gaming regulations across jurisdictions are similar or overlapping, the Company must satisfy all conditions individually for each jurisdiction. Obtaining the required licenses at a corporate and individual level is a thorough process, in which the authorities review detailed information about the companies and individuals applying for suitability, as well as the processes used in the assembly, sale, and distribution of gaming devices. Once the license has been granted, regulatory oversight ensures that the licensee continue to operate with honesty and integrity.
Frequently, gaming regulators not only govern the activities within their jurisdiction or origin, but also monitor activities in other jurisdictions to ensure that the Company complies with local standards on a worldwide basis. A violation in one jurisdiction could result in disciplinary action in another.
The Company holds over 450 gaming licenses across approximately 340 jurisdictions. Key regulatory authorities that have licensed the Company include, among others, the United Kingdom Gambling Commission, the Nevada State Gaming Control Board and the New Jersey Division of Gaming Enforcement. The Company has never been denied a gaming related license, nor had any of its licenses suspended or revoked.
Lottery
Lotteries in the U.S. are regulated by state or other applicable law. There are currently 46 U.S. jurisdictions (including the District of Columbia) that authorize the operation of lotteries. The ongoing operations of lotteries and lottery operators are typically subject to extensive and broad regulation, which vary state-by-state. Lottery regulatory authorities generally exercise significant discretion, including with respect to the determination of the types of games played, the price of each wager, the manner in which the lottery is marketed and the selection of suppliers of equipment, technology, and services, as well as the retailers of lottery products. To ensure the integrity of contract awards and lottery operations, most jurisdictions require detailed background disclosure on a continuous basis from vendors and their officers, directors, subsidiaries, affiliates, and principal stockholders. Background investigations of the vendors’ employees who will be directly responsible for the operation of lottery systems are also generally conducted. Certain jurisdictions also require extensive personal and financial disclosure and background checks from persons and

26


entities beneficially owning a specified percentage of a vendor’s securities. The awarding of lottery contracts and ongoing operations of lotteries in international jurisdictions are also extensively regulated, although international regulations typically vary from those prevailing in the U.S.
Digital and Sports Betting
In 2019, there was continued growth in sports wagering across the U.S. In addition to the states and tribal jurisdictions that adopted Sports Betting in 2018, more states legalized and adopted regulations to govern sports wagers in 2019: Colorado, Iowa, Indiana, Illinois, New York, and additional Tribal jurisdictions. Some of these states launched in 2019, with others expected to launch in 2020. More states are expected to address the legalization of sports wagering in upcoming legislative sessions. The channels for offering sports wagering differ from state to state, with most states seeking to offer sports wagering both in person and through some electronic means, such as via a mobile phone app.
In the U.S., the Unlawful Internet Gambling Enforcement Act of 2006 (“UIGEA”) prohibits, among other things, the acceptance by a business of a wager by means of the internet where such wager is prohibited by any applicable law where initiated, received or otherwise made. Under UIGEA, severe criminal and civil sanctions may be imposed on the owners and operators of such systems and on financial institutions that process wagering transactions. The law contains a safe harbor for wagers placed within a single state (disregarding intermediate routing of the transmission) where the method of placing the bet and receiving the bet is authorized by that state’s law, provided the underlying regulations establish appropriate age and location verification.
Also in the U.S., the Wire Act prohibits several types of wager-related communications over a “wire communications facility.” In 2011, the U.S. Department of Justice (the “DOJ”) issued an opinion interpreting the Wire Act as applicable only to sports wagering and that UIGEA does not supersede or otherwise limit the scope of the Wire Act (the “2011 Opinion”). In January 2019, the DOJ published the 2019 Opinion, concluding that the Wire Act was applicable to other forms of gambling that cross state lines, though the precise scope of the 2019 Opinion is unclear, and the DOJ has not yet addressed how it plans to enforce the Wire Act. The DOJ initially issued a memorandum stating that it will not enforce the 2019 Opinion prior to June 14, 2019. Further, the New Hampshire Lottery Commission and certain private parties (the “Plaintiffs”) commenced litigation in federal district court in New Hampshire challenging the 2019 Opinion. In response to this and other lawsuits, the DOJ issued a memorandum in April 2019 acknowledging that the 2019 Opinion did not consider whether the Wire Act applies to State lotteries and their vendors, and the DOJ is now considering this issue. In connection with such acknowledgment, the DOJ also extended the non-prosecution period for State lotteries and their vendors indefinitely while they consider the question. If the DOJ concludes that the Wire Act does apply to State lotteries and/or their vendors, they would extend the non-prosecution period for an additional period of 90 days after the DOJ publicly announces such position (the “Lottery Forbearance”).
On June 3, 2019, the U.S. District Court for the District of New Hampshire ruled in favor of the Plaintiffs and opined that the Wire Act applies only to sports betting and related activities (the “NH Decision”). The NH Decision also set aside the 2019 Opinion leaving the 2011 Opinion as DOJ’s only stated position on the subject. In response to the NH Decision, the DOJ extended the forbearance period to December 31, 2019; such forbearance period was further extended through June 30, 2020. The Lottery Forbearance remains unchanged. On August 16, 2019, the DOJ filed a Notice of Appeal with respect to the NH Decision. DOJ filed its opening brief with the First Circuit Court of Appeal on December 20, 2019. Plaintiffs’ opening briefs are due February 26, 2020. It is unclear when the DOJ will conclude its consideration of whether the Wire Act applies to State lotteries and their vendors, or whether other courts would come to the same conclusions set forth in the NH Decision. The Company’s management is evaluating the NH Decision, the 2019 Opinion, the DOJ appeal and their implications to the Company, its customers, and the industries in which the Company operates.
Delaware, New Jersey, Pennsylvania and West Virginia have authorized internet casino gaming and Nevada has authorized online poker. Additionally, a few state lotteries offer internet instant game sales to in-state lottery customers and several states allow subscription sales of draw games over the internet.
The Company participates in digital gaming and sports wagering in the U.S. as a content and technology provider within fully regulated gaming and lottery frameworks.
Digital gaming in the E.U. is characterized by diverse regulatory frameworks with some E.U. countries having monopolistic regimes run by a sole operator and others having established licensing systems for more than one operator. The Company carefully evaluates each E.U. jurisdiction to ensure adherence to applicable laws and regulations.  As local regulations and related guidance from authorities change, the Company re-evaluates its position in any given country. In 2018, the E.U. Court of Justice announced that it was dropping all enforcement proceedings related to gambling which allows the individual E.U. country rulings to stand, regardless of whether or not they violate E.U. laws. As a result, the Company has made adjustments to its strategy, to respect the individual E.U. country rulings.

27


Italian Gaming and Betting Regulations
The Company operates in Italy in the lottery, gaming, and betting sectors and is subject to regulatory oversight by the Agenzia delle Dogane e Dei Monopoli ("ADM"). At December 31, 2019, the Company held licenses for (1) the activation and operation of the network for Italy's Lotto game, (2) the operation of instant and traditional lotteries, (3) the activation and operation of the network for the telematic operation of legalized AWPs and VLTs, (4) the land based collection of pari-mutuel and fixed odds betting through physical points of sale and digital channels and (5) the digital gaming collection operated through digital channels, including digital sports betting, skill games, casino games, and digital Bingo.
Gaming in Italy is an activity reserved to the State. Any game that is carried out without proper authorization is illegal and subject to criminal penalties. Italian law grants the Ministry of Economy and Finance, through ADM, the power to introduce games and to manage gaming and betting activities directly or by granting licenses to qualified operators selected by means of public tenders as further explained below. The process of creating and granting gaming and betting licenses in Italy is heavily regulated.
Gaming and betting licenses are granted pursuant to a public tender procurement process. The license provides for all of the licensee’s requirements, in accordance with the provisions of Italian law and regulation, activities and duties, including collection of the game’s revenues, the payment of winnings, the payment of the point of sale, payment of gaming taxes and all the other amounts due to the State, the drawings and the management of all of the technological assets to operate gaming, requirements of the technological infrastructure and the relevant service levels. Licenses are for a determined time period, generally nine years, and are not renewable unless indicated in the licensing agreement; in such event, the renewal is not guaranteed to be on the same terms. In certain cases, the license may be extended at the option of the ADM on the same terms. Under other circumstances, which are typically defined in the licensing agreement, the license may be revoked or terminated. Most cases of early termination are related to the breach of the terms of the licensing agreement or the non-fulfillment of conditions of that agreement as well as the loss of the requirements prescribed by Italian law and regulation for the assignment and the maintenance of gaming licenses. In some cases, the early termination of the license allows the State to draw upon the entire amount of the performance bond presented by the licensee. Upon governmental request, the licensee has an obligation to transfer, free of charge, the assets subject of the license to the State at the end of the term of the license or in the event of its revocation or early termination. Each single license contains specific provisions enacting such general obligation.


28


C.
Organizational Structure
A listing of the Parent’s directly and indirectly owned subsidiaries at February 24, 2020 is set forth in Exhibit 8.1 to this annual report on Form 20-F. At February 24, 2020, De Agostini had an economic interest of approximately 50.59% and, due to its election to exercise the special voting shares associated with its ordinary shares pursuant to the loyalty plan, a voting interest in the Parent of approximately 67.18% of the total voting rights. See “Item 7. Major Shareholders and Related Party Transactions” for additional information.
The following is a diagram of the Parent and certain of its subsidiaries and associated companies at February 24, 2020

NEWORGCHARTA01.GIF

29


D. 
Property, Plant and Equipment
The Parent's principal office is located at Marble Arch House, 66 Seymour Street, 2nd Floor, London W1H 5BT, U.K., telephone number +44 (0) 207 535 3200. At February 24, 2020, the Company leased approximately 123 properties in the U.S. and 280 properties outside of the U.S., and owned a number of facilities and properties, including:
an approximately 113,000 square foot production and research and development office building in Moncton, New Brunswick, Canada;
an approximately 52,500 square foot research and development lab and engineering office in Reno, Nevada;
an approximately 51,000 square foot production and assembly facility and office in Gross St. Florian, Austria; and
an approximately 13,000 square foot enterprise data center in West Greenwich, Rhode Island.
The following table shows the Company's material properties at February 24, 2020:
U.S. Properties
Location
Square
Feet
Use and Productive Capacity
Extent of
Utilization
Holding
Status
9295 Prototype Drive,
Reno, NV
1,251,179
Office; Warehouse, Game Studios; Hardware/Software Engineering; Global Production Center; Electronic Gaming Machine and Instant Ticket Vending Machine Production
100
%
Leased
6355 S. Buffalo Drive,
Las Vegas, NV
222,268
U.S. Principal Operating Facility, Game Studio, Systems Software, Showroom
100
%
Leased
55 Technology Way,
West Greenwich, RI
170,000
WG Technology Center: Office; Research and Testing; Storage and Distribution
100
%
Leased
4000 South Frontage Road, Suite 101
Lakeland, FL
141,960
Printing Plant: Printing facility; Storage and Distribution; Office
100
%
Leased
10 Memorial Boulevard,
Providence, RI
124,769
U.S. Principal Operating Facility
100
%
Leased
300 California Street, Floor 8,
San Francisco, CA
15,457
Office; PlayDigital HQ
100
%
Leased
8520 Tuscany Way, Bldg. 6, Suite 100,
Austin, TX
81,933
Texas Warehouse and National Response Center: Contact Center; Storage and Distribution; Office
95
%
Leased
5300 Riata Park Court, Bldg. E, Suite 100,
Austin, TX
42,537
Austin Tech Campus: Research and Test; Office
90
%
Leased
8200 Cameron Road, Suite E120,
Austin, TX
41,705
Data Center of the Americas: Data Center; Network Operations; Office
80
%
Leased
47 Technology Way,
West Greenwich, RI
13,050
Enterprise Data Center: Data Center; Network Operations
75
%
Owned
75 Baker Street,
Providence, RI
10,640
RI National Response Center: Office; Contact Center
100
%
Leased

30


Non-U.S. Properties
Location
Square
Feet
Use and Productive Capacity
Extent of
Utilization
Holding
Status
Via delle Monachelle S.N.C.
Pomezia, Rome, Italy
170,456
Instant Ticket Warehouse; Instant Ticket Production
100
%
Leased
Galwin 2
1046 AW Amsterdam, Netherlands
125,128
Electronic Gaming Machine Production; Gaming Distribution/Repair; Research and Test; Office
90
%
Leased
Viale del Campo Boario 56/D 00154
Roma, Italy
123,740
Principal Operating Facility in Italy: Office Italy Data Center: Data Center; Network Operations
100
%
Leased
328 Urquhart Ave,
Moncton, New Brunswick, Canada
113,000
Canada HQ; Office; Research and Testing; VLT Production
100
%
Owned
Viale del Campo Boario 19 00154
Roma, Italy
96,840
Office; Software Development
95
%
Leased
Seering 13-14,
Unterpremstatten, Austria
73,750
Austria Gaming HQ; Office; Research and Test
90
%
Leased
29 Suzhoujie Street, Viva Plaza, Haidian District, Room No. 1-20, 11th and 18th Floors, Beijing 100080, China
54,058
Game Studio; Systems Software; Office
85
%
Leased
Al. Jerozolimskie, 92
Brama Building,
Warsaw, Poland
71,904
International Tech Hub; Office; Research and Test
95
%
Leased
USCE Tower
Bulevar Mihajla, Pupina No. 6
Belgrade, Serbia
42,764
Software Development Office, Lottery and Gaming Products
95
%
Leased
11 Talavera Rd.
Building  B,
Sydney, Australia
27,432
Office; Sales & Marketing; Financial Support
100
%
Leased
10 Finsbury Square, 3rd Floor
London EC2A 1AD, United Kingdom
17,340
International Management HQ, Play Digital

100
%
Leased
Marble Arch House,
66 Seymour Street, 2nd Floor,
London W1H 5BT, United Kingdom
11,495
Registered Global Headquarters of the Parent
75
%
Leased
 
The Company's facilities are in good condition and are adequate for its present needs and there are no known environmental issues that may affect the Company's utilization of its real property assets.
The Company does not have any plans to construct, expand or improve its facilities in any material manner other than general maintenance of facilities.  As such, no increase in productive capacity is anticipated.
None of the Company's properties are subject to mortgages or other security interests.

Item 4A.
Unresolved Staff Comments

None.


31


Item 5. 
Operating and Financial Review and Prospects
 
The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the Consolidated Financial Statements, including the notes thereto, included in this annual report, as well as “Presentation of Financial and Certain Other Information,” “Item 3.A. Selected Financial Data,”  “Item 3.D. Risk Factors” and “Item 4.B. Business Overview.”
 
The following discussion includes information for the fiscal years ended December 31, 2019 and 2018. Refer to Part I, Item 5 of the annual report on Form 20-F for the fiscal year ended December 31, 2018, filed with the SEC on March 8, 2019, for the Operating and Financial Review and Prospects for the fiscal year ended December 31, 2017.

The following discussion includes certain forward-looking statements. Actual results may differ materially from those discussed in such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this annual report, including in “Item 5.G. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995” and “Item 3.D. Risk Factors.”

A.            Operating Results

Business Overview
 
The Company is a global leader in gaming that delivers entertaining and responsible gaming experiences for players across all channels and regulated segments, from Gaming Machines and Lotteries to Sports Betting and Digital. Leveraging compelling content, substantial investment in innovation, player insights, operational expertise, and leading-edge technology, the Company's solutions deliver gaming experiences that engage players and drive growth. The Company has a well-established local presence and relationships with governments and regulators in more than 100 countries around the world, and creates value by adhering to the highest standards of service, integrity, and responsibility. The Company's operations for the period presented here-in are classified into four principal business segments operating in three regions: North America Gaming and Interactive, North America Lottery, International, and Italy.

Key Factors Affecting Operations and Financial Condition
 
The Company's worldwide operations can be affected by industrial, economic, and political factors on both a regional and global level. The following are the principal factors which have affected the Company's results of operations and financial condition and/or which may affect results of operations and financial condition for future periods.
 
Product Sales: Product sales fluctuate from year to year due to the mix, volume, and timing of the transactions. Product sales amounted to $925.1 million and $784.9 million, or approximately 19.3% and 16.2% of total revenues, for the years ended December 31, 2019 and 2018, respectively.

Jackpots and Late Numbers: The Company believes that the performance of lottery products is influenced by the size of available jackpots in jurisdictions that offer such jackpots. In general, when jackpots increase, sales of lottery tickets also increase, further increasing the jackpot. The Company also believes that consumers in Italy monitor “late numbers” (numbers that have not been drawn for more than 100 draws) and when there is a good pipeline of late numbers, wagers in Italy increase. Under both circumstances, the Company's service revenues are positively impacted.

Non-Cash Goodwill Impairments: In 2019, the Company determined that there was an impairment in the International reporting unit’s goodwill due to the deterioration in the Company's forecasted cash flows of the International reporting unit and a higher weighted-average cost of capital. A $99.0 million non-cash goodwill impairment loss with no income tax benefit was recorded to reduce the carrying amount of the International reporting unit to fair value. The goodwill remaining in the International reporting unit after the impairment was $1.308 billion for the year ended December 31, 2019. The impairment loss had no impact on the Company’s cash flows, ability to service debt, compliance with financial covenants, or underlying liquidity.

Effects of Foreign Exchange Rates: The Company is affected by fluctuations in foreign exchange rates (i) through translation of foreign currency financial statements into U.S. dollars for consolidation, which is referred to as the translation impact, and (ii) through transactions by subsidiaries in currencies other than their own functional currencies, which is referred to as the transaction impact. Translation impacts arise in the preparation of the consolidated financial statements; in particular, the consolidated financial statements are prepared in U.S. dollars while the financial statements of each of the Company's subsidiaries are generally prepared in the functional currency of that subsidiary. In preparing consolidated financial statements, assets and liabilities measured in the functional currency of the subsidiaries are translated into U.S. dollars using the exchange rate prevailing

32


at the balance sheet date, while income and expenses are translated using the average exchange rates for the period covered. Accordingly, fluctuations in the exchange rate of the functional currencies of the Company's subsidiaries against the U.S. dollar impacts the Company's results of operations. The Company is particularly exposed to movements in the euro/U.S. dollar exchange rate. Although the fluctuations in exchange rates have had a significant impact on the Company's revenues, net income, and net debt, the impact on operating income and cash flows is less significant as revenues are typically matched to costs denominated in the same currency.

The Wire Act: The Company's management is evaluating the Wire Act and related legal developments, and their implications to the Company, its customers, and the industries in which the Company operates, as more fully described in “Item 3.D Risk Factors” and “Item 4.B Business Overview”. If the Wire Act is broadly interpreted and enforced to prohibit activities in which the Company and its customers are engaged, the Company could be subject to investigations, criminal and civil penalties, sanctions and/or other remedial measures and/or the Company may be required to substantially change the way it conducts its business, any of which could have a material adverse effect on the Company’s results of operations, business, financial condition, or prospects.

Critical Accounting Estimates
 
The Company's consolidated financial statements are prepared in conformity with GAAP which require the use of estimates, judgments, and assumptions that affect the carrying amount of assets and liabilities and the amounts of income and expenses recognized. The estimates and underlying assumptions are based on information available at the date that the financial statements are prepared, on historical experience, judgments, and assumptions considered to be reasonable and realistic.
 
The Company periodically and continuously reviews the estimates and assumptions. Actual results for those areas requiring management judgment or estimates may differ from those recorded in the consolidated financial statements due to the occurrence of events and the uncertainties which characterize the assumptions and conditions on which the estimates are based.
 
The areas that require greater subjectivity of management in making estimates and judgments and where a change in such underlying assumptions could have a significant impact on the Company's consolidated financial statements are fully described in "Notes to the Consolidated Financial Statements—2. Summary of Significant Accounting Policies" included in "Item 18. Financial Statements". Certain critical accounting estimates are discussed below.
 
Revenue Recognition
 
The Company recognized service and product revenues of $3,860.7 million and $925.1 million, respectively, for the year ended December 31, 2019. The Company often enters into contracts with customers that consist of a combination of services and products that are accounted for as one or more distinct performance obligations. Management applies judgment in identifying and evaluating the contractual terms and conditions that impact the identification of performance obligations and the pattern of revenue recognition. The Company's revenue recognition policy, which requires significant judgments and estimates, is fully described in "Notes to the Consolidated Financial Statements—2. Summary of Significant Accounting Policies" included in "Item 18. Financial Statements".

Impairments related to Goodwill

The process of evaluating potential impairments related to goodwill requires the application of significant judgment. Goodwill is tested for impairment annually, in the fourth quarter, or whenever events or changes in circumstances indicate the carrying amount may not be recoverable. If an event occurs that would cause revisions to the estimates and assumptions used in analyzing the fair value of goodwill, the revision could result in a non-cash impairment loss that could have a material impact on financial results.

The goodwill impairment test compares the fair value of the Company’s four reporting units (which are the same as its reportable segments) with its carrying amount and an impairment loss is recognized for the amount by which the carrying amount exceeds the reporting unit's fair value.

In performing the goodwill impairment test, the Company estimates the fair value of the reporting units using an income approach based on projected discounted cash flows. The procedures the Company follows include, but are not limited to, the following:

Analysis of the conditions in, and the economic outlook for, the reporting units;
Analysis of general market data, including economic, governmental, and environmental factors;
Review of the history, current state, and future operations of the reporting units;
Analysis of financial and operating projections based on historical operating results, industry results, and expectations;

33


Analysis of financial, transactional, and trading data for companies engaged in similar lines of business to develop appropriate valuation multiples and operating comparisons; and
Calculation of the Company's market capitalization, total invested capital, the implied market participant acquisition premium, and supporting qualitative and quantitative analysis.

Under the income approach, the fair value of the reporting unit is determined based on the present value of each unit's estimated future cash flows, discounted at a risk-adjusted rate. The Company uses internal forecasts to estimate future cash flows and estimates long-term future growth rates based on internal projections of the long-term outlook for each reporting unit. Actual results may differ from those assumed in forecasts. The discount rates are based on a weighted-average cost of capital analysis computed by calculating the after-tax cost of debt and the cost of equity and then weighted based on the concluded capital structure of the respective reporting unit. The Company uses discount rates that are commensurate with the risks and uncertainty inherent in each reporting unit and in internally developed forecasts. Discount rates used in the reporting unit valuations ranged from 7.4% to 10.6%.

Estimating the fair value of reporting units requires the Company's management to use its judgment in making estimates and making forecasts that are based on a number of factors including forecasted revenue, forecasted operating profits, terminal growth rates, and weighted-average costs of capital.


34


Results of Operations

Comparison of the years ended December 31, 2019 and 2018
 
 
For the year ended
 
 
 
 
December 31, 2019
 
December 31, 2018
 
Change
($ thousands)
 
$
 
% of
Revenue
 
$
 
% of
Revenue
 
$
 
%
Service revenue
 
3,860,746

 
80.7

 
4,046,314

 
83.8

 
(185,568
)
 
(4.6
)
Product sales
 
925,060

 
19.3

 
784,942

 
16.2

 
140,118

 
17.9

Total revenue
 
4,785,806

 
100.0

 
4,831,256

 
100.0

 
(45,450
)
 
(0.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of services
 
2,380,355

 
49.7

 
2,450,658

 
50.7

 
(70,303
)
 
(2.9
)
Cost of product sales
 
553,293

 
11.6

 
491,030

 
10.2

 
62,263

 
12.7

Selling, general and administrative
 
846,047

 
17.7

 
844,059

 
17.5

 
1,988

 
0.2

Research and development
 
266,241

 
5.6

 
263,279

 
5.4

 
2,962

 
1.1

Goodwill impairment
 
99,000

 
2.1

 
118,000

 
2.4

 
(19,000
)
 
(16.1
)
Other operating expense, net
 
3,742

 
0.1

 
17,239

 
0.4

 
(13,497
)
 
(78.3
)
Total operating expenses
 
4,148,678

 
86.7

 
4,184,265

 
86.6

 
(35,587
)
 
(0.9
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income
 
637,128

 
13.3

 
646,991

 
13.4

 
(9,863
)
 
(1.5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
(410,129
)
 
(8.6
)
 
(417,387
)
 
(9.3
)
 
7,258

 
(1.7
)
Foreign exchange gain, net
 
39,839

 
0.8

 
129,051

 
(9.0
)
 
(89,212
)
 
(69.1
)
Other income (expense), net
 
17,929

 
0.4

 
(54,607
)
 
(1.1
)
 
72,536

 
(132.8
)
Total non-operating expenses
 
(352,361
)
 
(7.4
)
 
(342,943
)
 
(7.1
)
 
(9,418
)
 
2.7

 
 
 
 
 
 
 
 
 
 
 
 
 
Income before provision for income taxes
 
284,767

 
6.0

 
304,048

 
6.3

 
(19,281
)
 
(6.3
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for income taxes
 
173,109

 
3.6

 
189,401

 
3.9

 
(16,292
)
 
(8.6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
111,658

 
2.3

 
114,647

 
2.4

 
(2,989
)
 
(2.6
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Less: Net income attributable to non-controlling interests
 
130,683

 
2.7

 
115,671

 
2.4

 
15,012

 
13.0

Less: Net income attributable to redeemable non-controlling interests
 

 

 
20,326

 
0.4

 
(20,326
)
 
(100.0
)
Net loss attributable to IGT PLC
 
(19,025
)
 
(0.4
)
 
(21,350
)
 
(0.4
)
 
2,325

 
(10.9
)

35



Service revenue 
 
 
For the year ended December 31,
 
Change
($ thousands)
 
2019
 
2018
 
$
 
%
North America Gaming and Interactive
 
619,265

 
624,476

 
(5,211
)
 
(0.8
)
North America Lottery
 
1,072,383

 
1,111,069

 
(38,686
)
 
(3.5
)
International
 
460,307

 
495,497

 
(35,190
)
 
(7.1
)
Italy
 
1,708,069

 
1,814,549

 
(106,480
)
 
(5.9
)
 Operating Segments
 
3,860,024

 
4,045,591

 
(185,567
)
 
(4.6
)
Corporate Support
 

 

 

 
-

Purchase Accounting
 
722

 
723

 
(1
)
 
(0.1
)
 
 
3,860,746

 
4,046,314

 
(185,568
)
 
(4.6
)
 
North America Gaming and Interactive

The following table sets forth changes in service revenue in the North America Gaming and Interactive segment:
 
 
For the year ended December 31,
 
Change
($ thousands)
 
2019
 
2018
 
$
 
%
Machine gaming
 
406,673

 
420,447

 
(13,774
)
 
(3.3
)
Other services
 
212,592

 
204,029

 
8,563

 
4.2

 
 
619,265

 
624,476

 
(5,211
)
 
(0.8
)

The principal drivers of the decrease in service revenue for the year ended December 31, 2019 compared to the year ended December 31, 2018 were as follows:

A decrease of $13.8 million in Machine gaming, primarily driven by an 11% year-over-year reduction in the installed base units that includes the impact of a strategic agreement with a distributor in Oklahoma, partially offset by higher average yields; and
An increase of $8.6 million in Other services, principally due to the expansion of the U.S. Sports Betting market and new iGaming contracts resulting in an increase of $16.2 million, partially offset by a $9.3 million decrease in social gaming.

North America Lottery

The following table sets forth changes in service revenue in the North America Lottery segment:
 
 
For the year ended December 31,
 
Change
($ thousands)
 
2019
 
2018
 
$
 
%
Operating and Facilities Management Contracts
 
807,354

 
828,641

 
(21,287
)
 
(2.6
)
Lottery Management Agreements
 
108,032

 
129,104

 
(21,072
)
 
(16.3
)
Machine gaming
 
97,013

 
99,679

 
(2,666
)
 
(2.7
)
Other services
 
59,984

 
53,645

 
6,339

 
11.8

 
 
1,072,383

 
1,111,069

 
(38,686
)
 
(3.5
)


36


The principal drivers of the decrease in service revenue for the year ended December 31, 2019 compared to the year ended December 31, 2018 were as follows:

A decrease of $21.3 million in Operating and Facilities Management Contracts, primarily driven by a 29.3% reduction in same store revenues (revenue from existing customers as opposed to new customers) from multi-state jackpot games and a $45.5 million reduction in revenue due to the conclusion of the Illinois supply contract in the first quarter of 2019, partially offset by an increase in same store revenue growth of 4.6% due to increases in instant ticket and draw games;
A decrease of $21.1 million in lottery management agreements ("LMAs"), principally driven by lower multi-state jackpot activity resulting in a lower amount of expected LMA incentives to be earned; and
An increase of $6.3 million in Other services, principally due to a $5.5 million increase in sports betting revenue.

International

The following table sets forth changes in service revenue in the International segment:
 
 
For the year ended December 31,
 
Change
($ thousands)
 
2019
 
2018
 
$
 
%
Operating and Facilities Management Contracts
 
284,417

 
282,864

 
1,553

 
0.5

Machine gaming
 
111,839

 
139,936

 
(28,097
)
 
(20.1
)
Other services
 
64,051

 
72,697

 
(8,646
)
 
(11.9
)
 
 
460,307

 
495,497

 
(35,190
)
 
(7.1
)

The principal drivers of the decrease in service revenue for the year ended December 31, 2019 compared to the year ended December 31, 2018 were as follows:

An increase of $1.6 million in Operating and Facilities Management Contracts, principally due to higher same store revenue of $8.5 million, partially offset by unfavorable foreign currency translation of $10.4 million;
A decrease of $28.1 million in Machine gaming, principally driven by an 8.7% year-over-year reduction in the commercial gaming installed base units and $8.2 million of unfavorable foreign currency translation, partially offset by a 20.6% year-over-year increase in the video lottery terminal ("VLT") installed base units; and
A decrease of $8.6 million in Other services, principally driven by lower Commercial Services revenue of $7.9 million driven by unfavorable foreign exchange translation of $4.8 million and the sale of the Company’s BillBird subsidiary in the fourth quarter of 2019.

Italy

The following table sets forth changes in service revenue in the Italy segment:
 
 
For the year ended December 31,
 
Change
($ thousands)
 
2019
 
2018
 
$
 
%
Operating and Facilities Management Contracts
 
760,185

 
793,303

 
(33,118
)
 
(4.2
)
Machine gaming
 
572,242

 
672,202

 
(99,960
)
 
(14.9
)
Other services
 
375,642

 
349,044

 
26,598

 
7.6

 
 
1,708,069

 
1,814,549

 
(106,480
)
 
(5.9
)

Operating and Facilities Management Contracts - Lotto

Lotto revenue for the year ended December 31, 2019 decreased by $16.3 million compared to the year ended December 31, 2018, principally due to $24.6 million of unfavorable foreign currency translation, partially offset by a 1.7% increase in wagers.


37


Wagers for the years ended December 31, 2019 and 2018 are as follows:
 
 
For the year ended December 31,
 
Change
(€ millions)
 
2019
 
2018
 
 
%
10eLotto wagers
 
5,860

 
5,728

 
132

 
2.3

Core wagers
 
1,941

 
1,877

 
64

 
3.4

Wagers for late numbers
 
163

 
227

 
(64
)
 
(28.2
)
Million day
 
187

 
185

 
2

 
1.1

Total wagers
 
8,151

 
8,017

 
134

 
1.7


Operating and Facilities Management Contracts - Instant tickets
 
Instant tickets revenue for the year ended December 31, 2019 decreased by $16.8 million compared to the year ended December 31, 2018, principally driven by unfavorable foreign currency translation of $16.4 million. Total wagers were consistent with the prior year driven by strong performance of new products, offsetting the conclusion of several games.

Wagers for the years ended December 31, 2019 and 2018 are as follows:
 
 
For the year ended December 31,
 
Change
(€ millions)
 
2019
 
2018
 
 
%
Total wagers
 
9,194

 
9,207

 
(13
)
 
(0.1
)

Machine gaming
 
Machine gaming for the year ended December 31, 2019 decreased by $100.0 million compared to the year ended December 31, 2018, primarily driven by:

A decrease of $68.0 million in VLTs due primarily to increases in gaming machine taxes related to the Prelievo Unico Erariale (“PREU”) and unfavorable foreign exchange translation of $19.4 million, partially offset by a reduction in the return to players;
A decrease of $32.0 million in amusement with prize machines ("AWPs") due primarily to an 11.6% decrease in the average number of AWPs and unfavorable foreign exchange translation of $10.6 million.

Total wagers for the years ended December 31, 2019 and 2018 are as follows:
 
 
For the year ended December 31,
 
Change
(€ millions)
 
2019
 
2018
 
 
%
VLT wagers
 
5,669

 
5,838

 
(169
)
 
(2.9
)
AWP wagers
 
3,690

 
3,717

 
(27
)
 
(0.7
)
Total wagers
 
9,359

 
9,555

 
(196
)
 
(2.1
)
 
Total wagers and machines installed correspond to the management of VLTs and AWPs under the Company's licenses.
 
Other services

Other services for the year ended December 31, 2019 increased by $26.6 million compared to the year ended December 31, 2018, primarily driven by:

An increase of $30.1 million in Commercial Services due to an increase in POS fees as a result of a new service offering, partially offset by unfavorable foreign currency translation of $8.6 million; and
A decrease of $1.7 million in Sports Betting primarily due to unfavorable foreign currency translation of $8.4 million, partially offset by a 6.6% increase in wagers (€908 million for the year ended December 31, 2019 compared to €852 million for the year ended December 31, 2018).


38


Product sales
 
 
For the year ended December 31,
 
Change
($ thousands)
 
2019
 
2018
 
$
 
%
North America Gaming and Interactive
 
451,382

 
378,693

 
72,689

 
19.2
North America Lottery
 
92,816

 
80,833

 
11,983

 
14.8
International
 
379,881

 
324,486

 
55,395

 
17.1
Italy
 
981

 
930

 
51

 
5.5
 Operating Segments
 
925,060

 
784,942

 
140,118

 
17.9
Purchase Accounting
 

 

 

 
-
 
 
925,060

 
784,942

 
140,118

 
17.9

North America Gaming and Interactive
 
The following table sets forth changes in product sales in the North America Gaming and Interactive segment:
 
 
For the year ended December 31,
 
Change
($ thousands)
 
2019
 
2018
 
$
 
%
Gaming machines
 
321,217

 
261,696

 
59,521

 
22.7
Systems and other
 
130,165

 
116,997

 
13,168

 
11.3
 
 
451,382

 
378,693

 
72,689

 
19.2

The principal drivers of the increase in product sales for the year ended December 31, 2019 compared to the year ended December 31, 2018 were as follows:

An increase of $59.5 million in Gaming machines, primarily related to an increase of $30.1 million due to a higher volume of terminal sales, and an increase of $29.4 million due to higher average selling prices (“ASP”); and
An increase of $13.2 million in Systems and other, principally associated with an increase of $18.4 million in the license of software and other intellectual property rights, offset by fewer system add-on sales.

North America Lottery

The following sets forth changes in product sales in the North America Lottery segment:
 
 
For the year ended December 31,
 
Change
($ thousands)
 
2019
 
2018
 
$
 
%
Lottery product
 
91,287

 
80,405

 
10,882

 
13.5
Systems and other
 
1,529

 
428

 
1,101

 
> 200.0
 
 
92,816

 
80,833

 
11,983

 
14.8

The principal drivers of the increase in product sales for the year ended December 31, 2019 compared to the year ended December 31, 2018 were as follows:

An increase of $10.9 million in Lottery product, principally due to an increase in the sale of systems and point of sale machines of $27.8 million to existing lottery customers and a $3.7 million increase in instant ticket printing sales to new and existing customers, partially offset by $19.6 million of lower product sales to Massachusetts.
 

39


International

The following sets forth changes in product sales in the International segment:
 
 
For the year ended December 31,
 
Change
($ thousands)
 
2019
 
2018
 
$
 
%
Lottery product
 
18,501

 
46,323

 
(27,822
)
 
(60.1
)
Gaming machines
 
259,424

 
193,092

 
66,332

 
34.4

Systems and other
 
101,956

 
85,071

 
16,885

 
19.8

 
 
379,881

 
324,486

 
55,395

 
17.1

 
The principal drivers of the increase in product sales for the year ended December 31, 2019 compared to the year ended December 31, 2018 were as follows:

A decrease of $27.8 million in Lottery product, primarily related to a large multi-year software license in the third quarter of 2018 that did not recur in 2019;
An increase of $66.3 million in Gaming machines, principally due to approximately 4,800 additional VLTs sold, primarily in Sweden, and approximately 2,500 additional commercial gaming machines (an 18.3% increase from the year ended December 31, 2018), partially offset by higher incentives and $6.9 million of unfavorable foreign currency translation; and
An increase of $16.9 million in Systems and other primarily due to $14.3 million higher gaming software licenses, partially offset by unfavorable foreign currency translation of $4.6 million.

Operating expenses
 
 
For the year ended December 31,
 
Change
($ thousands)
 
2019
 
2018
 
$
 
%
Cost of services
 
2,380,355

 
2,450,658

 
(70,303
)
 
(2.9
)
Cost of product sales
 
553,293

 
491,030

 
62,263

 
12.7

Selling, general and administrative
 
846,047

 
844,059

 
1,988

 
0.2

Research and development
 
266,241

 
263,279

 
2,962

 
1.1

Goodwill impairment
 
99,000

 
118,000

 
(19,000
)
 
(16.1
)
Other operating expense, net
 
3,742

 
17,239

 
(13,497
)
 
(78.3
)
Total operating expenses
 
4,148,678

 
4,184,265

 
(35,587
)
 
(0.9
)

Information on the material changes in operating expenses are as follows:

Cost of services

Cost of services decreased for the year ended December 31, 2019 compared to the year ended December 31, 2018, principally due to:
An increase of $24.4 million in the North America Gaming and Interactive segment, principally due to an increase of $14.5 million in amortization and depreciation and a $3.0 million increase in licensing and royalties;
An increase of $6.8 million in the North America Lottery segment, principally due to an increase of $4.8 million in amortization and depreciation;
A decrease of $0.5 million in the International segment, principally due to a $4.6 million legal settlement offset by favorable foreign currency translation of $12.3 million;
A decrease of $89.0 million in the Italy segment, primarily related to favorable foreign currency translation of $53.9 million, a $26.1 million reduction in the amount of marketing and advertising ($25.1 million net of foreign currency translation) driven by regulations in Italy banning certain types of advertising, a $34.5 million decrease ($13.6 million net of foreign currency translation) in fees paid on gaming machines partially offset by an increase in fees received from commercial services, and an $8.0 million reduction in outside services ($3.5 million net of foreign currency translation); and
A decrease of $11.6 million in Purchase Accounting, principally associated with a decrease in depreciation and amortization primarily related to fully depreciated developed technologies acquired in the 2015 acquisition of IGT.

40



Cost of product sales

Cost of product sales increased for the year ended December 31, 2019 compared to the year ended December 31, 2018, principally due to:
A $12.6 million increase in the North America Gaming and Interactive segment, primarily related to an increase of $5.8 million due to product sale mix, a $5.3 million increase in inventory obsolescence costs and a $4.9 million increase in manufacturing costs, partially offset by a $4.8 million reduction in freight costs; and
A $47.3 million increase in the International segment, principally due to an increase of $41.2 million due to product sale mix and a $10.2 million increase in manufacturing costs, partially offset by favorable foreign currency translation of $7.5 million.

Selling, general and administrative

Selling, general and administrative expense increased for the year ended December 31, 2019 compared to the year ended December 31, 2018, principally due to:
A $9.8 million increase in the North America Gaming and Interactive segment, principally due to a $15.5 million increase in litigation costs;
A $7.2 million decrease in the International segment, principally due to a $13.5 million reduction in bad debt expense and $3.6 million of favorable foreign currency translation, partially offset by a non-recurring benefit in 2018 of $7.5 million related to the earn out of an acquisition;
A $3.6 million increase in the Italy segment, primarily related to a $10.5 million increase in depreciation and amortization, partially offset by a $7.3 million decrease in payroll related costs and $4.1 million of favorable foreign translation; and
A $3.8 million decrease in Corporate Support, primarily due to favorable foreign currency translation of $6.9 million, partially offset by $4.0 million of higher software license costs.

Research and development

Research and development expense increased for the year ended December 31, 2019 compared to the year ended December 31, 2018, principally due to:
A $4.8 million increase in the North America Gaming and Interactive segment, primarily related to an increase of $7.3 million in outside services, partially offset by $5.6 million of favorable foreign currency translation.

Goodwill impairment

In 2019, the Company incurred a $99.0 million impairment loss in the International segment as discussed in the Critical Accounting Estimates section. The Company determined that there was an impairment in the International reporting unit’s goodwill due to lower forecasted cash flows along with a higher weighted-average cost of capital.

In 2018, the Company incurred a $118.0 million impairment loss in the International segment as discussed in the Critical Accounting Estimates section. The Company determined that there was an impairment in the International reporting unit’s goodwill due to the results of 2018 being lower than forecasted along with a higher weighted-average cost of capital.

Impairments for the years ended December 31, 2019 and 2018 are recorded within Purchase Accounting.

Other operating expense, net
 
 
For the year ended December 31,
($ thousands)
 
2019
 
2018
Restructuring expense
 
24,855

 
14,781

Transaction expense, net
 
5,588

 
51

Impairment (non-goodwill)
 
994

 
2,407

Gain on sale of assets to distributor
 
(27,695
)
 

 
 
3,742

 
17,239



41


In 2019, the Company entered into a long-term strategic agreement with a distributor in Oklahoma that included the sale of
used, non-premium equipment, which resulted in a gain of $27.7 million for the year ended December 31, 2019.

Operating income
 
 
For the year ended December 31,
 
Change
($ thousands)
 
2019
 
2018
 
$
 
%
North America Gaming and Interactive
 
263,968

 
218,860

 
45,108

 
20.6

North America Lottery
 
256,192

 
296,527

 
(40,335
)
 
(13.6
)
International
 
126,825

 
142,077

 
(15,252
)
 
(10.7
)
Italy
 
520,673

 
541,254

 
(20,581
)
 
(3.8
)
 Operating Segments
 
1,167,658

 
1,198,718

 
(31,060
)
 
(2.6