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October 27, 2005

VIA EDGAR

Mr.
Brad Skinner

Accounting
Branch Chief

Division
of Corporation Finance

Securities
and Exchange Commission

Washington,
D.C. 20549

Re:                               Scientific Games Corporation

Form 10-K for the Year Ended December 31, 2004

Filed March 16, 2005

File No. 0-13063

Dear Mr. Skinner:

Reference
is made to the letter dated September 22, 2005 (the “Comment Letter”) from the
Staff of the Division of Corporation Finance to Mr. A. Lorne Weil, Chief
Executive Officer of Scientific Games Corporation (the “Company”), setting
forth the Staff’s comments regarding the filing referenced above.  As previously discussed, the Company
undertook to respond to those comments by today.

Accordingly,
this letter contains the Company’s responses to the Staff’s comments in the
Comment Letter.  The paragraph numbers of
the Company’s responses correspond to the numbers appearing next to the Staff’s
comments as set forth in the Comment Letter.

We
are also sending you a copy of this letter by Federal Express.

We
trust that the following responses will fully address the Staff’s comments as
set forth in the Comment Letter.  If you
have any questions or comments regarding the Company’s responses, please do not
hesitate to contact me.

  Very truly yours,

  /s/  DeWayne E. Laird

  DeWayne E. Laird

  Vice President and Chief
  Financial Officer

  cc:

  Mr. A. Lorne Weil

  Chief Executive Officer

  Scientific Games
  Corporation

Form 10-K for the Year Ended
December 31, 2004

Item 7. MD&A of
Financial Condition and Results of Operations

Results of Operations, page
41

1.                                       Your discussion
of your results of operations appears brief, particularly given the complexity
of your operating segments.  Tell us how
you considered the guidance in Item 303(a) of Regulation S-K.  In this regard, explain why you have not
provided a discussion of your segment operating results along with the
discussion of your consolidated results.
For example, tell us why you have not disclosed the reasons for the decline
in revenues in your Pari-mutuel and Venue groups for the periods presented,
including your June 30, 2005 interim period, or addressed whether these
declines are material trends that are expected to continue.

Response:

We
believe that we have complied with the guidance in Item 303(a) of Regulation
S-K in our Management’s Discussion and Analysis of Financial Condition and
Operating Results beginning on page 41 of our December 31, 2004 Form 10-K. Given
the context and the nature of the items discussed, we have historically chosen
to provide the information relating to each segment within the overall
discussion. However, in light  of the Staff’s
comments, and in order to enhance our presentation, we will modify our Management’s
Discussion and Analysis of Financial Condition and Operating Results in our
September 30, 2005 Form 10-Q  and in
subsequent filings to include a discussion of our operating results separately
for each of our segments, rather than within the overall presentation.

With respect to the revenue
declines in the Pari-mutuel Group, certain declines were attributable to unique
events, such as the adverse weather in the Northeast in the first quarter of
2005 and the loss of the New York Racing Association contract in 2005. With
respect to other declines in wagering in the United States and in Europe, it is
not clear to the Company whether such declines represent a material trend at
this time. We will continue to monitor the results through the balance of 2005
and expect to provide further discussion in our Management’s Discussion and
Analysis of Financial Condition and Operating Results, as
appropriate.

With respect to the revenue
declines in the Venue Management Group, we believe such declines are
principally the result of the smoking ban adopted throughout Connecticut early in
the second quarter of 2004. The effect of this event constituted a trend in
2004 through April 2005 and was disclosed in the Management’s Discussion and
Analysis of Financial Condition and Operating Results section of our periodic
Securities and Exchange Commission (“SEC”) filings beginning with our June 30, 2004
Form 10-Q. As with the Pari-mutuel Group, it is not clear to the Company
whether other declines in wagering in the United States represent a material trend
at this time. We will continue to monitor the results for the remaining balance
of 2005 and expect to provide further discussion in our Management’s
Discussion and Analysis of Financial Condition and Operating Results as
appropriate.

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Item 8. Financial Statements
of Supplementary Data

Note 1. Description of the
Business and Summary of Significant Accounting Policies

(i) Other Assets and
Investments, page 66

2.                                       Further clarify
how you account for your computer software development costs and whether you
apply SFAS 86 or SOP 98-1 to those costs.
Clarify how your accounting meets the “technological feasibility and
recoverability tests” of each standard.
In this regard, note that technological feasibility does not apply to
SOP 98-1.  See paragraph 51 of SOP 98-1.

Response:

Our software development costs are costs
incurred for internal use software which is used in connection with our
long-term lottery and pari-mutuel service contracts and software used to meet
our internal needs.

Our software development costs are accounted
for pursuant to SOP 98-1.  The software
is used by us to provide a service to our customers. The customer does not
acquire a license to use the software under these contracts. Costs incurred
during the preliminary project stage are expensed as incurred. Software costs
incurred after the preliminary project stage is complete are capitalized, when
we have committed to the project, and it is probable the software will be used
to perform the function intended. We also capitalize costs associated with
upgrades and enhancements to existing systems. Capitalized software costs are
amortized on a straight-line basis over the expected useful lives.   Additionally, we capitalize costs for
internal accounting systems and amortize such costs over their expected useful
lives.

In order to further clarify our approach, we will modify our disclosure
for software development costs in our 2005 Form 10-K filing as follows:

In accordance with the provisions of Statement of
Position 98-1, Accounting for the Costs of Computer Software Developed
for Internal Use, the Company capitalizes costs associated with
internally developed and/or purchased software systems for use in its lottery
and wagering service contracts.  Capitalized
costs are amortized on a straight-line basis over the expected useful lives.

(k) Revenue Recognition,
page 66

3.                                       We have
reviewed your business section and note the complexity of your revenue
generating activities by each of your segments and the multiple elements you
provide.  However, your revenue
recognition disclosures in your audited financial statements and critical
accounting policies appear general in nature and do not specifically address
the different arrangements you enter into and when revenues are recognized for
your various products, services and elements.
For each of your

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segments, please provide us
a detailed summary of the various arrangements you enter into and how your
accounting follows the principles and guidance set forth in EITF 00-21, SAB 104
and/or SOP 97-2.  Similarly, address your
accounting for the costs associated with these arrangements, including the
accounting literature that supports deferral of your installation costs and
related equipment.  Please ensure your response
addresses all of the various elements you describe in your business section
including, but not limited, to ticket sales, ticket design, ticket
manufacturing, game design, sales and marketing support, inventory management
and warehousing and fulfillment services, customized computer software, equipment,
data communication services, cooperative services program and facilities
management services.

Response:

We analyze our revenue recognition based on
the applicable guidance available for each of our revenue streams.  We begin our analysis with the guidance from SAB
104, which provides that revenue should be recognized when it is realized or realizable
and earned, which generally occurs when all of the following criteria are met: (a)
persuasive evidence of an arrangement exists, (b) delivery has occurred, (c)
the vendor’s fee is fixed or determinable and (d) collectibility is reasonably
assured.

If
a contract has multiple elements (with no software element), then we consider the
revenue allocation guidance in EITF 00-21, which provides that, in an
arrangement with multiple deliverables, the delivered item(s) should be
considered a separate unit of accounting if all of the following criteria are
met: (a) the delivered item(s) has value to the customer on a standalone
basis, (b) there is objective and reliable evidence of the fair value of the
undelivered item(s), and (c) if the arrangement includes a general right of
return relative to the delivered item, delivery or performance of the
undelivered item(s) is considered probable and substantially in the control of
the vendor.

If a multiple element contract includes the license
of software and post contract support (“PCS”), then we consider the revenue allocation
guidance in SOP 97-2. Revenue from PCS should be recognized ratably over the
term of the PCS arrangement.  However, we
note that all of our software sales involve significant customization of
software to meet the specific needs of each customer and therefore the revenue
recognition guidance in SOP 97-2 is not applicable.

If the contract includes a binding agreement to
supply a lottery or a pari-mutuel wagering system, contains a software license
agreement that involves customization of software to meet our customer’s
specifications and makes our right to receive payment dependent on our
performance in accordance with the agreement, we consider the guidance in SOP
81-1.  Under SOP 81-1, portions of the
total estimated contract revenues and costs are reflected in income each period
based on the proportion of the progress toward completion during the period,
which is usually measured based on cost incurred to date as a percentage of
total estimated cost to complete the contract.

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The majority of our revenues are earned under
long-term lottery and pari-mutuel service contracts. The amount of such
revenues are determined as a percentage of the amount of retail sales of
lottery tickets or wagers made by our customers or by our customers’ patrons
pursuant to the terms of the contract. Our service costs, which include
telecommunications, field support, rent, paper, supplies and ink, related to
long-term lottery and pari-mutuel service contracts are expensed as incurred. Our
direct installation activities, which include costs for online terminals,
facilities wiring, computers, internal labor and travel, are performed at the
inception of a specific contract with a specific customer to enable us to
perform under the terms of the contract. These activities begin after we enter
into a contract and end when the setup activities are substantially complete.
Such activities do not represent a separate earnings process and are deferred
and amortized over the life of the contract.

With respect to accounting for deferred
installation activities we follow the guidance set forth in paragraph 5 of SFAS
91.  The methodology in SFAS 91 requires
capitalization of incremental direct costs paid to third parties related to a
successfully completed arrangement or contract. Further, certain internal
direct costs are capitalized when directly related to setting up a customer for
service.

We also earn revenues from the supply of
products to our customers, including instant tickets, prepaid phone cards and
lottery terminals. Revenue for these product sales is recognized when the
customer takes ownership of the product and assumes risk of loss for the
product pursuant to the terms of the applicable contracts. Ticket manufacturing
costs are recognized when the customer accepts the product pursuant to the
terms of the contract. Costs incurred for ticket design, game design, sales and
marketing support are expensed as incurred.

In addition to the general policies discussed
above, the following are the specific revenue recognition policies for our four
segments:

•                  Lottery Group

•                  Pari-mutuel Group

•                  Venue Management Group

•                  Telecommunications Products
Group

Lottery Group

The Lottery Group is our largest segment and
accounted for 71% of total consolidated revenues for the year-ended December
31, 2004.  The Lottery Group’s services
and sales revenues are as follows:

•                  Instant Lottery Tickets

•                  Cooperative Services

•                  Licensed Branded Lottery
Products

•                  Online Lottery Services

•                  Lottery Systems Sales

•                  Lottery Software Licensing

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•                  Lottery Terminal Sales

Instant Lottery Tickets:  Instant tickets, commonly
referred to as scratch-off tickets, are typically printed on paper and played
by removing a coating to determine if they are winning tickets.  Our instant ticket contracts typically have
an initial term of three years and frequently include multiple renewal options,
which our customers have generally exercised for additional periods ranging
from one to five years.  For the year
ended December 31, 2004, revenues from the sale of instant tickets represented
approximately 26% of the Lottery Group’s total revenue.

We sell instant tickets under two different
arrangements and recognize revenues from each
arrangement using the guidance in SAB 104.  Revenue from the sale of instant tickets that
are sold on a per unit price basis is recognized when the customer accepts the
product pursuant to terms of the contract.
Revenue from the sale of instant tickets that are sold on a variable-price
basis is recognized when the percentage of the amount of retail sales is
determined; such determination is made when the fee is fixed or determinable
pursuant to the terms of the contract.

Cooperative Services:   A cooperative service contract is an
arrangement whereby we manage a lottery authority’s instant ticket operations.
Under a cooperative service contract we typically receive a percentage of the
lottery authority’s total instant ticket revenues. Therefore, we recognize
revenue as we perform the service based on when ticket sales occur.  For the year ended December 31, 2004,
revenues from performing cooperative services represented approximately 19% of
the Lottery Group’s total revenue.

Revenue for cooperative services contracts is
accounted for pursuant to SAB 104 and recognized based upon a percentage of the
amount of the retail value of lottery tickets pursuant to the terms of the
contract.

Licensed Branded Lottery
Products:  Revenue from
the licensing of branded property is earned under two types of contracts. The
majority of our contracts include the licensing of the selected branded
property coupled with a service component whereby we purchase and distribute
merchandise prizes on behalf of the lottery authorities to identified winners.
We also have contracts that include only the licensing of the selected branded property,
with no service component.  For the year
ended December 31, 2004, revenues from licensed branded products represented
approximately 5% of the Lottery Group’s total revenue.

Revenue for licensing and service arrangements is accounted for
pursuant to SAB 104. SAB 104, which refers to
SFAC 5, states that if services are rendered or rights to use assets extend continuously
over tim