Segment Reporting and Geographic Information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

26. Segment Reporting and Geographic Information

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

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

The Company operates its business along four operating segments, which are segregated based on the basis of revenue stream: Gaming, Virtual Sports, Interactive and Leisure. The Company believes this method of segment reporting reflects both the way its business segments are managed and the way the performance of each segment is evaluated.

In prior years, and up to and including the interim period nine months ended September 30, 2020, the Company operated its business along three operating segments: Server Based Gaming, Virtual Sports (which included Interactive) and Acquired Businesses. During the period subsequent to September 30, 2020, the Company has completed the process of changing its internal structure, which has been ongoing since the NTG Acquisition, and as a result has changed the composition of its operating segments. The Company now operates its business along four operating segments, which are segregated based on the basis of revenue stream: Gaming, Virtual Sports, Interactive and Leisure. The Company believes this method of segment reporting reflects both the way its business segments are now managed and the way the performance of each segment is now evaluated.

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

The following tables present revenue, cost of sales, excluding depreciation and amortization, selling, general and administrative expenses, depreciation and amortization, stock-based compensation expense and acquisition related transaction expenses, operating profit/(loss), total assets and total capital expenditures for the years ended December 31, 2020 and December 31, 2019, respectively, by business segment. Certain unallocated corporate function costs have not been allocated to the Company’s reportable operating segments because these costs are not allocable and to do so would not be practical. Corporate function costs consist primarily of selling, general and administrative expenses, depreciation and amortization, capital expenditures, right of use assets, cash, prepaid expenses and property and equipment and software development costs relating to corporate/shared functions. All acquisition and integration related transaction expenses are allocated as corporate function costs. Amounts previously disclosed for the year ended December 31, 2019 have been recharacterized in line with the current operating segments and categories.

In addition, as part of the recharacterization exercise, certain items of Revenue, Cost of Sales and Selling and Administrative Expenses have been recharacterized to ensure consistency with similar items across the Group. The revenue recharacterizations are to ensure spares and similar items are reflected with other items of hardware (Product Sales). The resulting impact on previously reported information for the year ended December 31, 2019 is as follows: Service Revenue, previously reported $134.9 million, now $134.5 million; Product Sales Revenue, previously reported $18.5 million, now $18.9 million; Cost of Service, previously reported $23.5 million, now $25.4 million; Cost of Product Sales, previously reported $12.6 million, now $12.9 million; Selling, General and Administrative Expenses, previously reported $72.6 million, now $70.4 million. The recharacterization has no impact on the previously reported Net Operating Loss, Net Loss or Net Comprehensive Loss for the year ended December 31, 2019.

Segment Information

Year Ended December 31, 2020

	Gaming			Virtual Sports			Interactive			Leisure			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	92.2		$	32.4		$	13.3		$	40.8		$	—		$	178.7
Product sales		18.3			—			—			2.8			—			21.1
Total revenue		110.5			32.4			13.3			43.6			—			199.8
Cost of sales, excluding depreciation and amortization:
Cost of service		(15.7	)		(2.9	)		(1.9	)		(9.6	)		—			(30.1	)
Cost of product sales		(12.4	)		—			—			(2.0	)		—			(14.4	)
Selling, general and administrative expenses		(24.5	)		(4.4	)		(3.9	)		(30.8	)		(21.2	)		(84.8	)
Stock-based compensation expense		(0.8	)		(0.4	)		(0.3	)		(0.1	)		(3.2	)		(4.8	)
Acquisition and integration related transaction expenses		—			—			—			—			(7.0	)		(7.0	)
Depreciation and amortization		(27.6	)		(3.7	)		(2.3	)		(16.9	)		(1.8	)		(52.3	)
Segment operating income (loss)		29.5			21.0			4.9			(15.8	)		(33.2	)		6.4
Net operating income																$	6.4
Total assets at December 31, 2020	$	93.9		$	64.4		$	8.5		$	87.0		$	70.3		$	324.1
Total goodwill at December 31, 2020	$	1.4		$	48.0		$	0.4		$	33.9		$	—		$	83.7
Total capital expenditures for the year ended December 31, 2020	$	8.9		$	4.8		$	2.7		$	8.7		$	4.9		$	30.0

Year Ended December 31, 2019

	Gaming			Virtual Sports			Interactive			Leisure			Corporate Functions			Total
	(in millions)
Revenue:
Service	$	73.8		$	33.4		$	4.7		$	22.6		$	—		$	134.5
Product sales		17.7			—			—			1.2			—			18.9
Total revenue		91.5			33.4			4.7			23.8			—			153.4
Cost of sales, excluding depreciation and amortization:
Cost of service		(18.1	)		(2.6	)		(0.7	)		(4.0	)		—			(25.4	)
Cost of product sales		(12.0	)		—			—			(0.9	)		—			(12.9	)
Selling, general and administrative expenses		(29.7	)		(6.0	)		(4.0	)		(12.7	)		(18.0	)		(70.4	)
Stock-based compensation expense		(1.0	)		(0.6	)		(0.2	)		(0.1	)		(7.1	)		(9.0	)
Acquisition and integration related transaction expenses		—			—			—			—			(6.7	)		(6.7	)
Depreciation and amortization		(30.4	)		(2.6	)		(2.9	)		(3.8	)		(2.3	)		(42.0	)
Segment operating income (loss)		0.3			21.6			(3.1	)		2.3			(34.1	)		(13.0	)
Net operating loss																$	(13.0	)
Total assets at December 31, 2019	$	112.7		$	61.3		$	6.7		$	100.6		$	46.1		$	327.4
Total goodwill at December 31, 2019	$	1.3		$	46.4		$	0.4		$	32.8		$	—		$	80.9
Total capital expenditures for the year ended December 31, 2019	$	14.0		$	4.5		$	1.4		$	2.7		$	2.6		$	25.2

Geographic Information

Geographic information for revenue is set forth below:

	Year Ended December 31, 2020		Year Ended December 31, 2019
	(in millions)
Total revenue
UK	$	152.3	$	103.7
Greece		17.0		20.7
Italy		8.5		16.2
Rest of world		22.0		12.8
Total	$	199.8	$	153.4

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

	December 31, 2020		December 31, 2019
	(in millions)
UK	$	101.8	$	116.1
Greece		18.2		26.5
Italy		2.1		2.3
Rest of world		9.3		6.3
Total	$	131.4	$	151.2

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