Good morning. Welcome to the Scientific Games 2021 first quarter investor conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. There will be an opportunity for questions later. Please note this event is being recorded. I would now like to turn the conference over to Jim Bombassei, Senior Vice President of Investor Relations for Scientific Games. Mr. Bombassei, you may begin.
Thank you, operator, and good morning, everyone. During today's call, we will discuss our first quarter 2021 results and operating performance, followed by a question and answer period. With me this morning are Barry Cottle and Mike Eklund. Our call today will contain statements that include forward-looking statements under the Private Securities Litigation Reform Act of 1995. These statements involve certain risks and uncertainties that can cause actual results to differ materially from those discussed during the call. For information regarding these risks and uncertainties, please refer to our earnings release issued earlier this morning, the materials relating to this call posted on our website, and our filings with the SEC. We will also discuss certain non-GAAP financial measures.
A description of each non-GAAP measure and a reconciliation of each non-GAAP measure to the most directly comparable GAAP measure can be found in our earnings press release, as well as in the investor section on our website. As a reminder, this conference call is being recorded. A replay of this webcast and accompanying materials will be archived in the Investors section on our website at scientificgames.com. Also, supplemental reference slides are available on our investor relations website. These slides are meant to facilitate your review of the company's results. Now let me turn the call over to Barry.
Thanks, Jim. Good morning, everyone. Thank you for joining us. We are extremely pleased with our progress this quarter, delivering another quarter of strong execution, which enabled us to return to year-over-year growth on both the top and bottom line. We were able to achieve this despite continued restrictions and closures, particularly in U.K. and Europe, building on the strong progress we made in 2020. These results speak to the strength of our portfolio of businesses, our execution, and focus on delivering compelling content and solutions, all enabled by best-in-class technology and talent. In particular recognition to our talented team with their continued passion and dedication. I could not be more proud of what they've achieved thus far, and I'm excited about the foundation we are building for our success going forward.
I also want to share with you the great progress we're making on the strategic review with our board. First, let me turn to the quarterly results. In the quarter, we are very pleased to deliver strong financial results, as well as key operational progress across our portfolio of businesses, demonstrated by double-digit growth at lottery, digital, and SciPlay, as well as continued gaming momentum in North America, enabling us to grow a very strong 35% in AEBITDA year-over-year. We continue to be extremely disciplined in managing our balance sheet with an eye on enhancing cash flow, growing free cash flow to $80 million in the quarter and enabling us to pay down $250 million in debt, delivering on our ongoing commitment to de-lever. Turning to the businesses. In gaming, we're seeing great progress.
While continued restrictions and closures, particularly internationally, impacted the business in Q1, we are starting to see a strong sense of recovery in the U.S. market. Given the success and cadence of our new product roadmap, we see gaming poised for growth in second quarter, both year-over-year and sequentially. In particular, we're seeing strong success from our strategy of bringing in great talent and executing against our new global R&D and product roadmap, focusing on the largest profit pools to capture share. We're also growing and expanding our proven game franchises and our marquee licensed brands. In our North American gaming operations, with the success of Kascada, the first global cabinet launched under the new strategy, and games like Coin Combo and Monopoly Money Grab, we have grown our North American premium game ops install base for the third consecutive quarter.
Kascada is performing at 2.3x the house average, impressively, it is on pace to achieve 1,000 units in half the time of our most successful cabinet in recent history, the J43. This is despite the backdrop of continued restrictions and closures. In early Q3, we will launch the Mural cabinet with games like Willy Wonka Dreamer of Dreams and 88 Fortunes Emperor's Coins with premier casinos in the major U.S. markets. 88 Fortunes is a great example of one of many Scientific Games franchises where we have leveraged its success across all our markets. It is a top-performing game in land-based, one of the top games on our iGaming platform, including ranking number one in the U.S., a consistent performer for our instant lottery business, and it is one of SciPlay's core social casino games. Turning to the North American for sale market.
We grew our ship share two percentage points to 25% last year. Dancing Drums Prosperity is performing great out of the gate at 1.9 times the house average on Eilers, and in our internal data, we're seeing performance as high as 2.7x , which should lead us to continued success in this market segment. In Australia, a key profit pool outside of North America, we're seeing positive momentum in our ship share off the back of successful launch of Kraken Unleashed, which is performing at 1.5x the house average. Another sign of our real momentum is our competitive position in Eilers rankings. We have the number one share of top new games in both the WAP category and the for sale category.
In the new games WAP category, we have four of the top five ranked games, and all three titles launched on Kascada are registering in Eilers top new premium released games list. This continued progress is a validation of the broader strategy and operating structure that our new gaming team has implemented. Moving to lottery. We're off to a very strong start to 2021, with exceptional top and bottom line results driven by record industry growth, elevated jackpot activity, and our market-leading portfolio of products and services. The instant lottery business shined this quarter, and we continue to be the clear market leader with our unique solutions, helping to drive record performance for our customers. 43 of 45 U.S. instant game lotteries experienced double-digit sales growth in the quarter, and we are the primary provider to nine of the top 10.
We have a unique proposition for our customers with our innovative retail and digital products. Lotteries with our innovative solutions, including Scientific Games Enhanced Partnership, or SGEP, continue to lead the industry in performance, both in the U.S. and at our top international accounts, including Italy and the U.K. Our retail solutions continue to lead the lottery industry's modernization with checkout line, cashless and self-service solutions. This quarter, we signed a deal to provide SCiQ InLane at Kroger stores in Kentucky. It's a game changer for expanding instant ticket distribution into grocery store checkout lanes, allowing shoppers to add games to their grocery purchase in one convenient transaction. More rollouts are planned with Kroger and other major grocery retailers in other states. We've also been strengthening our global pipeline.
In Q1 alone, we signed and extended more than 30 years of instant lottery contracts, including a new contract in Portugal, which is a top 20 market globally. In terms of our digital and iLottery business, our flagship Pennsylvania program saw iLottery sales grow 50% year-over-year. iLottery is not just a U.S. story. We provide iLottery to 21 customers globally, with new iLottery expansions in Canada and Hungary in Q1. With at least 10 additional U.S. states anticipated to authorize iLottery over the next couple of years, we are very well positioned to benefit. Turning to SciPlay. We are very excited about both the strong performance in the quarter and the long-term outlook as we invest for the future by expanding in a $20 billion plus casual game market with the soft launch of Solitaire Pets Adventure in April.
In the quarter, SciPlay delivered strong revenue and AEBITDA growth of 28% and 32% respectively. Impressively, we were able to build on the momentum from last year, growing both year-over-year and sequentially. The strength was broad-based, with growth across the game portfolio as we continue to outperform the market. The basis for the strength continues to be our payer focus and Live Ops strategy, powered by our SciPlay engine. We achieved another record with payer conversion hitting 8.1%, while both monthly paying users and average monthly revenue per user continued to be well above pre-COVID levels. With the strength of our core social casino games and growing presence in the casual gaming space, we are very optimistic about the evolution of SciPlay and its path going forward.
Strong momentum continues in both our iGaming and sports businesses with a record quarter for digital revenue and AEBITDA. We have the largest high-quality offerings of must-have iGaming content and one of the most reliable and flexible set of tech solutions in the industry, powering leading tier one operators around the world for both iGaming and sports betting. In iGaming, we saw accelerating growth in the quarter, driven by 226% growth year-over-year in the U.S. This success was driven by our broad content offering, led by our original land-based franchises, including 88 Fortunes, our successful launch in Michigan, and supported by continued strength in the U.K. and Europe. Our results this quarter clearly demonstrate the strength of our strong franchise offerings, our innovative original content, and our market-leading distribution platform, OGS.
We had a leading market share at quarter end of 24% in the three U.S. states where we are live, maintaining our strong share in New Jersey, continuing to grow our share in Pennsylvania, and increasing our share in Michigan in the month of March by 500 basis points to 22%. Our original content, in particular our land-based franchises, play an important role in fueling this success. 88 Fortunes is the top-performing game on our iGaming platform in every state in which we operate. In fact, in the U.S., of the top-performing games on our iGaming platform in Q1, our original content accounted for 11 of the top 20 games in Michigan, 12 of the top 20 in New Jersey and a remarkable 15 of the top 20 in Pennsylvania. The affinity players have for original franchises is not just a U.S. story.
Taking a look globally, in 2020, our original land-based franchises generated approximately 30% of the $2.2 billion in total GGR on our iGaming platform and accounted for seven of the top 10 performing titles. While the R&D investment to create these original franchises is largely incurred at our gaming business, we're able to leverage that investment, monetizing our franchises across gaming, lottery, social, and our iGaming businesses, enhancing our returns and engaging players with these franchises wherever they want to play. Looking ahead, we will be launching in West Virginia soon, and we see tremendous opportunity in iGaming as more U.S. states legalize, as we continue to grow our footprint, and as we expand internationally. In our sports betting business, we continue to build on our momentum, driven by 94% revenue growth in the U.S.
As a market leader powering premium sports books and fan engagement on a global basis, we are a proven choice for tier one operators. We're poised to benefit from our continued growth in the total addressable market, both in the U.S. and globally. We are a partner to 24 operators on four continents with a demonstrated track record of success and unmatched capabilities. On the back of a number of renewal and deal wins in 2020, we deployed four sports books in the U.S. in the quarter and launched in Michigan and Virginia. Post-quarter end, we launched in Indiana, Illinois, and Tennessee, bringing our U.S. total to 24 sports books. We are rolling out our sports betting engine with FanDuel as a part of our recently expanded partnership. We became operational in two states in the quarter and another two so far in Q2.
We will be rolling out in multiple additional states over the course of 2021. Overall in the U.S., we're now live in 12 states and have plans to launch in Nevada soon. With recent legislative progress in New York, Maryland, Arizona, and Florida to legalize online sports betting and unprecedented demand for our platform and products outside the U.S., including Canada, Latin America, EMEA, and Asia Pacific, we see tremendous momentum. Our success has been driven by our robust offering, providing customers with the broadest and most flexible set of tech solutions in the industry. Our deep tech stack continues to demonstrate its reliability, performing flawlessly at the biggest sporting events around the globe. With our proven ability to scale quickly and launch in new markets, we couldn't be more excited about the opportunities ahead. Now I want to provide some comments on our strategic review.
This is an exciting time for Scientific Games. Over the past seven months, we've been working hard on a strategic review of our businesses with the help of our board, particularly Jamie Odell and Toni Korsanos, who's already successfully led the kind of strategic transformation we are embarking on. I'm pleased to share that this review is nearly complete and has confirmed the value and growth opportunities of each of our businesses. Our vision is to become a content and digital-led growth company, focused on building great games that define the future of gaming, supported by platforms that power the best operators in the world. We will achieve this vision through three core strategic pillars that will deliver on our promise to unlock value for shareholders and position Scientific Games for sustainable growth. Portfolio optimization, growth opportunities, and delevering.
In terms of portfolio optimization, our strategic review has confirmed the value of our five market-leading businesses, which have strong momentum and are positioned for significant growth. In gaming, our outstanding new management team has positioned us to come out of the pandemic as a much stronger competitor and gain significant market share. For iGaming, our business is the market-leading content provider and is executing at a high level and benefiting from accelerating industry tailwinds and our strong original content offering. Growth opportunities are high in the U.S., with a long-term TAM estimated to exceed $15 billion. In lottery, we are the market leader worldwide. Our largest customers have been with us more than 30 years on average, as we have driven increasing value for our customers through innovative systems and products. Lottery delivered outsized results during the pandemic, and again in this quarter.
Our content-focused iLottery business has many years of high-growth potential ahead with the U.S. iLottery market estimated to grow four-fold to $11 billion by 2025. Our sports business offers the preeminent platform used to power sports betting around the world, and we are investing to create unique content for our customers. We see strong growth opportunities ahead in the U.S. as more and more states legalize online sports betting. SciPlay outperformed the market last year and again this quarter, building off strong gains from 2020. With SciPlay's social casino business continuing to perform well, it has strong growth opportunities as it expands in the $20 billion casual marketplace and builds out its pipeline of games. Our best path to delivering significant value is driving a higher mix of both content, which provides differentiation and margin, and digital across the portfolio. We will leverage our key strengths to unlock value.
Talented teams across the company creating great games and franchises that engage players wherever they want to play. Market-leading businesses that are well-positioned to capture growth opportunities from emerging trends. Innovative technologies that enhance the player experience, power great platforms, and create value for our customers. Our second strategic pillar is to capitalize on our largest growth opportunities. We will become a sustainable growth company by making smart organic and inorganic investments in our portfolio, building on key growth opportunities, including gaming's winning new content and cabinets, iGaming's content, iLottery expansion in the U.S., the sports platform, and SciPlay expansion into the booming casual market. We will make that happen across the portfolio by leaning in on content, which provides differentiation and margin in high-growth markets such as digital with large and growing TAMs.
We recognize the incredible opportunity the digital transition in our industry presents, and we are seizing this opportunity. In fact, we are targeting our digital businesses to be comparable in size to our land-based gaming businesses within three years. Lastly, we remain committed to delevering. Within two years, we expect to significantly reduce our leverage ratio to be in line with our public company peers, substantially enhancing our ability to invest in growth opportunities that drive value for our shareholders. As I began my remarks, I want to reiterate, this is an exciting time for Scientific Games. I've never been more optimistic and confident in our future. We plan to announce specific actions and milestones around our three strategic pillars, portfolio optimization, growth opportunities, and delevering by our second quarter earnings call.
We expect that these actions will be executed over the next year, and we are confident you will share our excitement as you hear more about our plans. Now, let me turn the call over to Mike to speak to the financial results.
Thanks, Barry, and good morning, everyone. We appreciate all of you taking the time to join our call today. Before I jump into the financials, I want to quickly echo Barry's excitement and the optimism we all share at Scientific Games about our future and the tremendous opportunity we have in front of us to drive significant value for our customers, our employees, and our shareholders. I'm extremely proud of our employees around the globe. Frankly, it was their energy and enthusiasm that was instrumental in achieving the strong operational and financial performance in the first quarter. Now let's turn to the quarterly results. There are four things I want to highlight for you this morning. First, our strong execution led to a return to growth on both the top and the bottom line.
Revenue grew 1%, importantly, marking the first increase in revenue since 2019, and AEBITDA grew an impressive 35% versus the prior year. Importantly, all four of our business units had double-digit AEBITDA growth in the quarter. Second, we continue to be laser-focused on managing our balance sheet. We generated free cash flow of $80 million in the quarter, which was a $25 million improvement year-over-year and represents a free cash flow conversion rate of 30%. This increased efficiency in cash flow is a clear priority for me and our teams around the world, as we believe it is one of the best ways to deliver value for our shareholders. Third, we are making steady progress on our commitment to delever. As you heard Barry mention earlier, we paid down $250 million in debt year-to-date, including paying down $100 million in the quarter and $150 million in April.
In fact, since October, we have now paid down $361 million on the revolver, and we expect to continue to make significant progress on this front going forward as the economy continues to reopen and we drive increased productivity in the business. Finally, and fourth, we continue to be diligent in managing our cost base. We are on track for the $50 million in additional run rate savings we communicated to you last quarter. As a reminder, this is in addition to the $50 million in permanent savings we achieved last year. Now let's turn to the quarterly business unit results, starting with gaming. The gaming team grew AEBITDA both year-over-year and sequentially, up 13% and 3% respectively. This was despite the continued restrictions and closures with the U.K. and Europe largely closed for the entirety of the quarter.
The growth in AEBITDA benefited from a more favorable product mix and the cost actions we've taken, as well as comparing against certain charges that impacted the prior year quarter. Gaming revenue declined 23% year-over-year due to our geographic and product mix. As you know, we have an industry-leading position in the U.K. and in Europe and in our table games business, both of those of which are experiencing a slower recovery. On a sequential basis, the revenue decline was largely the result of the declines in Europe and the U.K. that we just discussed, and also in line and consistent with the guidance we provided last quarter.
Digging into the quarterly performance, we are starting to see a strong recovery in the U.S. market, and we are well-positioned as we continue to place more Kascada units on casino floors, and we will be launching the highly anticipated Mural cabinet shortly.
We had no major casino openings or expansions in the quarter. We saw very strong year-over-year coin in our gaming operations segment, with about 84% of our North American install base active. Looking ahead, with the market opening back up, especially in the U.S., and the continued gains as we execute on our new strategy and product roadmap, we anticipate that in the second quarter, gaming will see both year-over-year and sequential growth in both revenue and AEBITDA. With that, let's turn to Lottery. The strength of the business accelerated yet again in the first quarter, with revenue up 17% and AEBITDA up a very strong 53%. Growth was driven by a number of factors. First, record U.S. industry instant sales and strong sales across Europe. Second, above-market performance from our SGEP lotteries. Third, the elevated Powerball and Mega Millions jackpots we all saw early in the quarter.
Fourth, the continued strong iLottery performance. The margin improvement in the quarter was fueled largely by the strong top-line growth, and our international joint ventures had a very good result in the quarter. While we anticipate continued strength at Lottery in the second quarter, it's hard to predict exactly how long the COVID tailwinds we've seen since the second half of 2020 will continue. Now on to SciPlay. The SciPlay team delivered another quarter of strong results, building off the gains from last year. Revenue grew 28%, and AEBITDA increased 32%. Impressively, the SciPlay team delivered sequential growth on the back of what was already a very strong fourth quarter. The performance was broad-based and again enabled by their live ops strategy and payer focus and the overall strength of the evergreen franchises.
Turning to digital, they had a record quarter delivering $86 million of revenue and $29 million of AEBITDA, up 12% and 26% respectively. For those of you that may recall, in Q1 of last year, we had disclosed two one-time items that made our comps coming into Q1 a little bit harder. If you normalize for these, the sports platforms and iGaming revenues grew 35% year-over-year and 18% sequentially. That growth and performance was driven by the strong performance of our first-party content, our successful launch into Michigan, and the strength in our U.K. and European businesses. On our segment KPI page that you'll find in our earnings release, we have provided the normalized numbers for your reference.
While digital continues to benefit from the tailwinds in iGaming and sports betting, as well as our broad content offering, we anticipate there will be some impact on the business as restrictions and closures begin to ease. As we look to the second quarter, we will also increase our expenses related to the acceleration and the deployment of sports books in the U.S. Now turning to our debt, the balance sheet, and cash flows. We continued to execute on our commitment to delever and maximize our free cash flow. We ended the quarter with $8.3 billion in net debt, which is approximately $200 million lower than Q1 of 2020. Since October, as we previously mentioned, we have paid down a total of $361 million on our revolver, and we expect to make significant progress deleveraging going forward given our increased productivity and as the macro environment improves.
Our weighted average cost of debt at the end of the quarter was 5%, which compares to 5.7% in Q1 of 2020. The 70-basis-point improvement was due to LIBOR rates declining over the past year as well as lower net debt. We ended the quarter with $1.3 billion of available liquidity, which was $353 million higher than the first quarter last year. As you may recall, we don't have any debt maturities due until 2024. Moving to free cash flow. We generated an impressive $80 million of free cash flow for the quarter, up $25 million year-over-year, which translated to a free cash flow conversion rate of 30%, which was a 200-basis-point improvement year-over-year. A real credit to the focus and the hard work of our teams around the world.
The growth in free cash flow is due to the strong growth in AEBITDA and partially offset by the timing of cash interest payments, where we had three interest payments in Q1 of this year versus two in Q1 of last year. Wrapping up, I continue to be extremely excited about the future of Scientific Games. I can tell you that when I took this role a year ago, I saw tremendous opportunity to deliver value and transform the company, and it's great to see this starting to unfold. We are delivering strong results enabled by a high-performance winning culture and our talented teams around the world. We are executing on our strategies, building a strong foundation for our path forward. We are creating great content and leveraging it across the many platforms our players like to engage with and thus enhancing our returns.
We are strengthening our balance sheet and are committed to meaningfully reducing leverage. We are investing in high-growth opportunities, and we look to drive value. We are well advanced on our strategic review and looking forward to updating you in the second quarter. Overall, I am very pleased with the progress we are making and the pace at which we are moving. I'm excited about the opportunity that lies ahead. With that, I will be happy to take your questions. Operator, can you open the line?
The first question comes from Barry Jonas with Truist Securities. Please go ahead. Mr. Jonas, your line is open. Please go ahead with your question.
Oh, sorry. Thanks for that. I wanted to start with digital. Can you walk us through the next milestones for the FanDuel contract and when you think we'll start to see a visible uplift in revenues? With that, also for digital, how do you think you're positioned in the emerging Florida market given the new Seminoles compact? Thanks.
Thanks, Barry. Great questions, and I'll take those. First, FanDuel. We're very happy and excited about our partnership with FanDuel. Obviously, we're in the early days of rolling it out.
States. We've now got four converted to our sports engine, and we've got some more lined up between now and the start of the NFL season. You'll see that progress and along with the revenue as it starts to fold over the next several months. Our revenue there is a combination of business models and participation, so we'll continue to grow as the journey continues. On the Seminoles, I would say, obviously, it's an exciting time quite frankly, across digital sports and digital as it relates to Florida, we're excited to see momentum legislation with Florida, New York, Arizona, et cetera. We have a great relationship with the Seminoles, with Hard Rock. We're live today with digital iGaming content in New Jersey and retail sports in Iowa and New Jersey.
Obviously, we can't comment on specific deals, but we continue the discussions with Hard Rock around other opportunities across the continuum of sports and iCasino. Very exciting times right now in sports.
Okay, great. If I could just ask a quick follow-up. Look, you've had some very strong talent join recently. I guess you could start with Matt Wilson last year and several folks since. I guess just, how much do you think the new team stamp is on products today? Maybe more specifically, when does your new Chief Product Officer, Rich Schneider, start, and how long before you think we'll see an impact from him joining?
Great. Yeah. Also another great question. The new team, Matt and his team, Siobhan, Connie, and others all came in. They've been here now a little over a year. The impact has been phenomenal. Obviously, you've seen a regrouping, a prioritization of the profit pools, regearing the roadmap accordingly, a global R&D strategy all pointed at the biggest markets. You're seeing right now progress in those markets with three straight quarters of growth in the North America game ops premium space.
You're seeing great products, the products that have come out of this team and that system with Kascada, which is an incredible new cabinet that is outpacing our other recent cabinet launches in a meaningful way with very high ratings on the floor and at Eilers, backed up by incredible content like-- In fact, the three titles that we launched with Kascada all are in the top new premium games on Eilers. Followed up by the Mural cabinet that's coming out this later this summer with, again, great content of Willy Wonka and 88 Fortunes. All of that is a function of the team coming in and just working with the talent that existed today and making an incredible move on the roadmap to address the key markets.
Honestly, I say it's unfortunate even that we have the noise of COVID that suppressed some of this because as COVID and the markets start to recover, I think you're really going to see the magic of what is coming out on that side of it. It's going to become even more enhanced, obviously, with Rich. Rich is a great example of how we're continuing to lean in on content, building great games, right? He's a very experienced industry leader, and he's starting in July. We believe he's going to have an immediate impact to our products and the approach to the business. He's a veteran, he knows what he's doing. He's the best in the business. We're really excited about the impact he's going to have.
Obviously, we've announced some other talent that's coming on board as well that's going to continue to augment it. We've kind of said all along, we're assembling the best studio talent, which is going to basically result in the best roadmap and portfolio and development in the industry. We're really excited about the progress that we're making there.
Oh, that's great. Thanks, and congrats on a nice quarter.
Thank you.
The next question comes from John DeCree with Union Gaming. Please go ahead.
Good morning, everyone. Thanks for taking my questions. Just two. The first one on iGaming content. See a lot of market share and a nice uptick in revenues. Given the gaming team that Barry was just talking about for land-based that we're all very familiar with, curious if you could talk about maybe the integration of your iGaming content and your land-based content. I mean, is there an opportunity to leverage your leading land-based content online? Do you have separate teams that do the digital content? I guess the genesis of the question is we've seen a lot of B2C suppliers, your customers or would-be customers looking to get some content in-house. It's becoming very clear how important quality and even maybe quantity of content is on iGaming and your success, I think, evident of your library and ability.
Curious if your land-based expertise is providing a lot of help on the digital side or if there's synergies there. Just curious to get your thoughts on that.
No, absolutely. Another great question. I'll actually start in reverse order. Reverse about obviously, announcements and moves of people moving into building content for iCasino. Quite frankly, all that does is it just reinforces our belief of the huge upside and market potential in iGaming today, if you think about it. With a $15 billion+ TAM in the U.S. alone, we're in such the early stages of this, right? It's just the tip of the iceberg. You got three states live, fourth one coming on shortly. You have such unprecedented momentum in the space right now with both legislative, on the legislative front, but also on the player adoption front, right? There's this huge market opportunity, and that's out there now. There's space, right? There's space there for multiple players to be providing content.
We are extremely confident that we are in, quite frankly, the enviable position as it relates to bringing content to iGaming today. For exactly what you just described. Not only do we have the market-leading share today, broadest content offering with 3,000 games with an OGS platform, but as you said, we have best-in-class, a whole treasure chest of franchises and studio teams in gaming today, building things like 88 Fortunes, Dancing Drums, et cetera, that can be deployed across land-based and digital, and players love to play, but they play in casinos. I think, we mentioned earlier that 30% of our $2.2 billion in global GGR comes from SG-owned content. Content that gets developed in the land base and people can play, in digital.
We think as digital starts to progress across the United States, that's going to become even more important is, to have that player experience that they recognize the brand, they recognize the gameplay, they love how the game plays, its features, its bonuses. As we talked about in our strategic review, leaning into content, building great franchises and deploying those across land-based and digital puts us in a really, really nice position, going forward to take advantage of that.
That's great color, Barry. Thanks for that. If I could shift gears quickly for a quick follow-up on slots specifically, we've seen casinos, really across the country turn the corner over the last couple of months and, hopefully, it's light at the end of the tunnel. Curious if your team has seen any change in behavior. We know that the casinos were keeping a tight watch on their wallets and their capital budgets, we're hearing more and more, recovery progressing, more focus on gaming, particularly from regional casino operators and less on some of those non- or less profitable amenities.
Not sure if they've started to look at reinvesting just yet, if it's too soon, but since we last spoke just a couple of months ago, curious if you're seeing any behavior or getting any better visibility as to when your customers might start ramping up their capital spend on the casino floor?
John, this is Mike. I'll take that. There's a couple of things in there. It sounded like CapEx was one of them, just overall performance in the gaming. On the CapEx side, as you said, it's just a little early to react to that yet. We don't have great, clear guidance yet on how that's going to come through from the operators. They're still working through the budgets on their side. I would say this on CapEx, we've kind of seen the consensus out there, that you all have on those for CapEx for the year. We think you guys are in the right zip code. We're waiting and watching like everybody right now to see how that one's going to play out.
On the gaming business overall, I'd say this, and I'll let Barry jump in and add some color on the back end as well. As Barry said, we're just really pleased with the momentum in the gaming business right now. We landed about where we thought we were going to land in Q1, and as we guided the market, for Q1 as well. As you go into Q2, we see a lot of positive trends. We're at about 84% active units in North America right now. We see coin-in up 17% in April over what we saw in Q1. You heard in my prepared remarks that the international markets, especially the U.K. and Europe, were effectively closed for the entirety of the quarter. We expect those markets to start opening back up, and we think that bodes well for what Q2 should look like.
As we said in our remarks, we're right now anticipating and expecting the gaming business to be up both sequentially and year-over-year in the second quarter, and that's just on the back of all the good teams, all the teamwork that we have going on in the gaming business right now. Maybe on the product side, I'll let Barry jump into a little bit more of that, because I think that's fueling a lot of it.
I was just going to say, Mike did it really well. We're really, in terms of the trends outside of the territories Mike alluded to, like the U.K. where we have such a lead market share and they've been impacted by COVID. We're seeing great trends. We're seeing the trends of coin-in is increasing, active machines being turned on. Our North America game ops premium growing. You got to remember, 95% of our customers are mainly tribal and regional. 80% of their business comes from slots, it's super important for their business. We're seeing good trends in that regard.
As I mentioned earlier on the call, if you look at the product success that we've had just recently with the recent products being brought out and, with the combination of Kascada and Mural and those games with the recovery in the marketplace, we're really setting ourselves up for continued growth in Q2.
Thanks, guys. I appreciate all the color. Congratulations on the quarter.
Thanks.
The next question comes from Chad Beynon with Macquarie. Please go ahead.
Hi. Good morning. Thanks for taking my question and, congrats on the quarterly results. First, I wanted to focus on margins, particularly in the gaming segment. It looks like OpEx continued to decline. You guys have talked about that, some of the cost containment measures you've taken. Margins for the quarter in that segment were up to 44% despite product sales similar to what you were just talking about, not really fully back to where we'd like to see it. I guess my question is, where can margins in this segment get to? As we look out just over the next couple of months, should we expect a lot of costs to kind of come back to the business that could kind of temper our expectations in terms of this massive margin improvement? Thank you.
You bet, Chad. It's Mike. I'll try that one. I guess the first thing that I'd do is I'd point you to the short-term austerity measures that we put in place last year, obviously on the back of COVID. I would call out that most of that short-term austerity measures have come back into the business already. Those are already reflected in the Q1 results. What you see in Q1 is a pretty good benchmark of where we are. As the business starts to ramp, which would be a great thing, we'll obviously add back in the variable cost as needed to meet that demand, and we'll do it with the guiding principle of ensuring that OpEx continues to scale with revenue. There's obviously going to be some quarter-to-quarter volatility that always exists based on mix regionally by product, et cetera.
I think if you look at the Q1 number, it's a pretty good indicator, going forward, of what we expect.
Great. Thank you. Then I wanted to switch to SciPlay. I know that you mentioned you just soft launched Solitaire Pets, I believe a month or so ago, and that'll kind of get you into a bigger casual games genre. How are you thinking about growth in this segment or other segments that are tangential to your business, given the balance sheet that you have on the SciPlay side? Thanks.
Yeah, absolutely. We've been really pleased with the progress on SciPlay. As you can see from their quarter as well, they're continuing to see incredible strength in the social casino space, which is $5 billion+ TAM. They've actually grew Q1, again, beating the market across its portfolio of games, which is just great to see that continued progress coming out of the COVID tailwinds from last year. Now they're attacking the $20 billion+ casual market with Solitaire Pets Adventure, which comes on the back of the Bingo game that we launched as well. It's still early on Solitaire Pets. Basically, the soft launch happened in mid to late April, but we're very encouraged by it.
Obviously, the methodology or playbook that we used for Bingo so well is being applied to Solitaire, so it's not our "first time at the rodeo" in terms of launching a game like this. We've got other diverse efforts that are helping us get into that category as well. I think, again, it's very happy with where they are and very confident in their ability to enter the casual space in a successful way.
Thanks, Barry. Thanks, Mike.
The next question comes from Ryan Sigdahl with Craig-Hallum Capital Group. Please go ahead.
Good morning. Thanks for taking our questions. On the slide deck, you say 24% iGaming market share. Just to be clear, is this market share of GGR, or is that 24% of games out there? One of your competitors provided a similar data point. I think that was number of games, but can you clarify that, please?
Yeah. We're basing that calculation off of GGR.
Thank you. Can you remind us the amount of NOLs the company has, are there any restrictions on those, or could those or assume those will be used to shelter any gains on potential divestitures?
The number is 1.2, and there's nothing overly restrictive that we see today.
Great. Thanks, guys. I'll hop back in the queue.
The next question comes from David Katz with Jefferies. Please go ahead.
Hi. Good morning, everyone. Thanks for taking my questions. I wanted to focus on the lottery and just get some incremental impressions from two perspectives. Number one, there's a fair amount of discussion around iLotteries, if you could talk about your views on it, your positioning within it, et cetera. The other is that we have a lot of debate around lotteries globally and the degree to which there are other public entities that trade in a completely different context than you do. I'd just love to hear your impressions about kind of your positioning globally within lottery. We don't want to necessarily talk about how other companies trade and valuations, et cetera, but give us the tools to sort of make a detailed evaluation about that ourselves. Thank you.
Thanks. This is Barry. I'll take the first part of that, and then Mike can jump in. Let's start first with the iLottery. Again, I think that there's incredible opportunity in iLottery right now, and we're extremely excited about it. Number one, it kind of starts with the fact that, again, there's just an enormous TAM out there, $11 billion in the U.S. alone, and we're in such the early stage, the early innings of this thing. We're going live in a few states, and I think we expect 10 states over the next few years. Again, another one of these opportunities for us where there's just this huge TAM out there, untapped and with tremendous momentum coming off the heels of COVID. We're in an enviable position as it relates to iLottery.
We've probably launched one of the most successful or the most successful iLottery launch to date in Pennsylvania. We've got a great product and solution. We actually provide iLottery globally. It's about 20, 21 lotteries, you mentioned international, worldwide. We've got a great solution, and we're sitting on the cusp of an incredible market opportunity as it relates to iLottery. We feel like we're in a great position to win. The other key advantage for us here is, as you alluded to, on a global scale, and we provide lottery across all the top lotteries worldwide in every continent. Our relationships with the WLA and other lotteries, 43 of 45 states and nine of the top 10 just puts us in a great position. We're already there. We already have a relationship, and iLottery is just an extension of that business for us.
We're super excited about it.
Yeah, David, this is Mike. I'll jump in on the back of what Barry said on the lottery business. I mean, we could not be more pleased with the lottery business performance and what the team members there around the world are doing. Clearly they accelerated again in Q1, which was great to see, with 17% top-line growth, 53% bottom-line growth. We're seeing that momentum probably carry over into Q2 so far. That's a global statement, it's not just a U.S. statement. There's obviously been some industry tailwinds that started kind of in the second half of last year, and they continue now. It's hard to predict exactly how long those are going to last and exactly what the lasting behavior changes may be coming out of the back of that. What we see today is a business that's just hitting on all cylinders, performing very well.
Whatever happens with the COVID tailwinds, what I would say about that business in general, and again, this is a global statement, we see secular tailwinds for that business. We're absolutely a clear industry leader with a market-leading position in that business, and we see a lot of growth opportunities within the existing portfolio of that lottery business. On the industry tailwind side, again, Barry said it, tremendous, enormous TAM for that business worldwide. The U.S. lotteries have grown 29 consecutive years in a row. You've got iLottery and sports betting, as Barry talked about, that are nascent with these big TAMs sitting behind them. We're expecting at least the 23% CAGR next three to five years on the iLottery side, probably 43% on the sports betting side. As you said or you asked, there's 180 lotteries around the world, and we sit behind a lot of those, right?
If you drop down into our leadership, we've got this extraordinarily high customer base. 24 of the top 25 global lotteries are Scientific Games. We got 44 lotteries in the U.S. We got, going back to the content portion of the conversation that we've been having today, we've got 87 of the top 100 best-selling games. We really like our chances in this space. We've got an unrivaled understanding of the go-to-market plans, the patented proprietary game planning, prize structures, and inventory management. The team has just done a great job over the years of building a great, robust business. Now on the path forward, we think there's growth left, right?
The industry tailwinds that we've talked about, using our SGEP value prop to migrate operators and customers, real chance to leverage our leadership in instant to introduce the iLottery and sports betting into our existing high-quality customer base, right? Gain share in systems, and then use our experience as a turnkey solution provider for B2C international opportunities where there's a large TAM sitting out there waiting for us. Right now, we're pretty bullish on the lottery business. Lottery business is performing well, and we're excited about the path forward and all the opportunities that lie ahead.
Thank you very much.
Operator, we have time for one more question.
Thank you. That will come from Jeff Stantial from Stifel . Please go ahead.
Hey, great. Thanks. Morning, everyone. Thanks for squeezing me in here, and congrats. Really nice quarter. For my first question, I believe you've had your cashless technology down in the field for a short period of time here with the Seminole Tribe. Any thoughts on how that's performing and any color on how you think that ROI then for the Seminoles and future partners might play out for them, would be helpful as well. If you could also talk to kind of what the pace of discussions have been like with potential partners for these technologies and how you kind of see that rollout progressing this year and longer term, when should we expect it to kind of accelerate into the back half of the year?
Absolutely. Thank you, Jeff, really appreciate that question. Look, we're really pleased where we are. Since we last spoke, six sites have actually gone live. We've connected about 13,000 machines. Obviously, it's early in the journey. We have seven additional partner deployments in the next 12 months lined up. Again, this is one of those tip of the iceberg of I think something that has a tremendous amount of momentum across the industry, and we're sitting in a great position coming off the heels of the patent deal with IGT. The fact that if you got to remember, as we talked about last time, it really comes down to having the technology and patents to be able to deploy a best-in-class solution. You're solving for the last mile, right?
With our systems business with 525,000 interconnected slots out in the marketplace, we can take that product across the larger addressable universe. We're really excited about it. Obviously it's still very early in the journey, but we're seeing strong demand, and we're rolling it out and refining the product, and we're really happy where we are. In terms of the revenue potential, it's a combination of hardware, software, some recurring revenue, et cetera. There's good ROI to it. We won't go into the specifics of what that looks like, but we're very pleased with where we are. With that, I'll turn it over to Barry for some concluding remarks. Thanks, everyone, for joining us on today's call. We are very excited about the progress we're making and how we're executing both strategically and operationally.
Our strong results demonstrate the strength of our content and franchises, engaging players wherever they want to play. Our strategic review and resulting plan is well progressed, and we look forward to sharing with you how we will unlock tremendous value through our core strategic pillars, optimizing the platform, capitalizing on high-growth opportunities, and significantly delevering. With that, I want to thank you for your support. Thanks, everyone, for joining our first quarter call. Now I'll turn it back over to the operator.
Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.