UPDATE 1-Sportech buys SGR betting unit for up to $83 mln

* To pay initial $65 mln to Scientific Games in cash, shares

* To raise 29.2 million pounds in a placing, open offer

* Playtech to take 9.99 percent stake in enlarged business

(Adds detail, background)

LONDON, Jan 27 (Reuters) - British gaming company Sportech (ROD.L) is buying racing and venue management business SGR from U.S. group Scentific Games Corp (SGMS.O) for up to $83 million in cash and shares to become a world leader in pools betting.

Sportech said on Wednesday it would pay an initial $65 million, followed by $10 million on Sept. 30, 2013, and up to $8 million if SGR meets its targets over the next three years.

Pools, or pari-muteul, betting is a gambling system in which all bets of a particular type a placed in a pool and payout odds are calculated by sharing the pool among all winning bets.

This differs from fixed-odds betting, where the payout is agreed at the time the bet is sold.

"This is a transformational transaction for Sportech. It catapults the business onto the international stage," chairman Piers Pottinger said.

Sportech said the initial sum would comprise $32.9 million in cash and 39.74 million Sportech shares issued at 50 pence apiece, which will give Scientific Games a 19.99 percent stake in the enlarged group.

Sportech said it also planned to raise 29.2 million pounds ($47 million) in a fully-underwritten placing and open offer of 58.4 million shares, also priced at 50 pence.

Gaming software firm Playtech (PTEC.L) said it would buy 19.88 million of the shares, giving it a 9.99 percent stake in the enlarged group, adding it had signed a letter of intent to provide products and services to the SGR business. (Reporting by Mark Potter; Editing by Dan Lalor) ($1 = 0.6195 pound)