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Description of the Business and Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Aggregate Business Acquisitions Completed
The following table summarizes an aggregate disclosure related to business acquisitions completed through September 30, 2017 and is based on the preliminary allocations of the purchase price expected to be finalized by the fourth quarter of 2017, pending completion of the valuation analyses for acquired intangible assets:
 
Total
Consideration
Cash paid, net
of cash
acquired
Contingent Consideration 1
Allocation of
purchase price
to Intangible
assets, net 2
Weighted
average useful
life of acquired intangible assets
Excess purchase
price allocated
to Goodwill
Aggregate total
$
66.0

$
57.7

$
7.5

$
56.4

8.3
$
14.6

1 Contingent consideration as determined by fair value and included in the consideration transferred.
2 Intangible assets primarily consist of technology-based and customer relationship intangible assets. The fair value of these intangible assets was determined using a combination of a royalty savings method and the excess earnings method using Level 3 in the hierarchy as established by ASC 820. The discount rates and royalty rates used in the valuation analysis ranged between 9% and 20% and 1% and 16%, respectively.
Summary of Revenue by Type Within Each Business Segment
The following table summarizes our revenues by type within each of our business segments:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2017
 
2016
 
2017
 
2016
Gaming
 
 
 
 
 
 
 
  Gaming operations
$
176.0

 
$
182.4

 
$
526.8

 
$
552.8

  Gaming machine sales
163.1

 
159.8

 
482.6

 
448.7

Gaming systems
62.0

 
57.6

 
190.6

 
176.8

  Table products
53.5

 
48.4

 
151.8

 
133.5

    Total
$
454.6

 
$
448.2

 
$
1,351.8

 
$
1,311.8

 
 
 
 
 
 
 
 
Lottery
 
 
 
 
 
 
 
  Instant products
$
142.7

 
$
140.3

 
$
435.7

 
$
431.3

  Lottery systems
60.2

 
46.3

 
158.6

 
146.9

    Total
$
202.9

 
$
186.6

 
$
594.3

 
$
578.2

 
 
 
 
 
 
 
 
Interactive
 
 
 
 
 
 
 
  Social Gaming - B2C
$
95.1

 
$
70.3

 
$
266.4

 
$
199.5

  Other
16.3

 
14.9

 
48.1

 
41.7

    Total
$
111.4

 
$
85.2

 
$
314.5

 
$
241.2
Summary of Deferred Revenue Activity
The following table summarizes the deferred revenue activity for the reporting period:
 
Nine Months Ended September 30,
 
2017
 
2016
Deferred revenue balance, beginning of period
$
67.4

 
$
57.8

New deferrals
173.3

 
194.6

Amounts recognized in revenue
(178.4
)
 
(192.8
)
Deferred revenue balance, end of period
$
62.3

 
$
59.6
Schedule of Impact of Adopting Revenue Recognition Guidance
The following table summarizes the anticipated impact to the financial statements based on our assessment completed to date:

Business Segment
Revenue Type
Anticipated Impact
Gaming
Gaming operations










Gaming machine sales


Gaming systems





Table products and other
Ÿ We anticipate the following impact on the net amount of revenue for WAP jackpot payments, which will no longer be treated as an expense but rather as a reduction to revenue: WAP jackpot expense of $5.5 million and $17.9 million for the three and nine months ended September 30, 2017, respectively, and $6.1 million and $22.9 million for the three and nine months ended September 30, 2016, respectively, would have been recognized as a reduction to revenue.

Ÿ We do not anticipate a material impact on timing or amount of revenue, other than the WAP impact disclosed above.


Ÿ We do not anticipate a material impact on timing or amount of revenue.


Ÿ We anticipate impact on timing of revenue recognition primarily related to certain hardware products and professional services, for which timing of revenue recognition might accelerate. While we do not anticipate this will result in a material impact on our consolidated financial statements, we are in the process of quantifying this change.


Ÿ We do not anticipate a material impact on timing or amount of revenue.


We do not anticipate a material impact on timing or amount of revenue on our U.K. gaming operations, which includes gaming operations, machine sales and to a lesser extent gaming system revenue streams.
Lottery
Instant products under POS

























Lottery - other





Ÿ We anticipate there may be a material impact on the timing and amount of revenue for our instant products revenues generated under POS arrangements.

Timing of recognition- currently, we recognize revenue under POS arrangements when such amounts become fixed or determinable, which is when retail sales occur. Under ASC 606, we have concluded that control transfers to the lottery authorities when the lotteries have taken delivery of shipments of instant products. This will accelerate revenue when compared to the current timing of recognition.

Adoption impact- upon adoption of ASC 606, the amount that we expect to receive from our lottery customers for inventory that remains unsold through retail sales will be recognized as an adjustment (both the revenue and cost of such instant products) to retained earnings. As of December 31, 2016, approximately $55 million of revenue related to instant products was not recognized because those tickets had not been sold by lottery retailers; accordingly, under ASC 606 this amount would be recognized directly to retained earnings as opposed to being recognized as future revenue upon the occurrence of retail sales. Because the ultimate effect of this adoption is highly dependent on shipment of instant products under POS arrangements in the fourth quarter, we can not quantify the adoption impact at December 31, 2017.

Future impact- because of the timing change described above, revenues and associated operating income may be materially impacted depending on timing of shipments of instant products. We also expect that future revenues under POS arrangements could be much more volatile than we have experienced under current accounting. However, because the timing of future shipments is not known, we can not estimate the impact on future revenues and associated operating income.

Ÿ We anticipate other immaterial impacts on timing and amount of revenue related to our other instant product and lottery systems arrangements which we anticipate would result in a shift in the timing of revenue recognition from 2017 to 2018 by less than $12 million in the aggregate.
Interactive
All
Ÿ We do not anticipate a material impact on timing or amount of revenue.