* Australia chosen due to public investor support for sector

* Could be largest IPO in Australia since at least 2014

* Co. management to meet select group of fund managers next week

SYDNEY, Sept 17 (Reuters) - Scientific Games Corp, a U.S. maker of slot machines, is seeking to list its predominantly North American and European lotteries unit in Australia in a $5 billion IPO, the country's biggest in at least seven years, two sources told Reuters.

The Las Vegas-based company has made an initial pitch for the IPO to fund managers, seeking to value the lotteries unit at more than $10 billion, the sources said on condition of anonymity as the deal has not yet been finalised.

That would make it the largest raising since Australia privatised its health insurer Medibank Private Ltd via a $4.9 billion IPO https://www.reuters.com/article/australia-medibank-idUKL3N0TD02B20141123 in 2014, according to Refinitiv data.

Scientific Games declined to comment.

The company had said in June it would divest its lottery and other non-core sports betting businesses to pay down part of its $8.2 billion net debt.

It has hired five investment banks, including Macquarie Group, to explore a listing in the stock exchange ASX Ltd, the people said.

Macquarie, which is separately also exploring a potential trade sale of the company, declined to comment.

According to the sources, the Sydney-based exchange was chosen due to Australia's investor familiarity with, and support for, the sector, which includes listed peers such as Tabcorp Holdings and Aristocrat Leisure.

The Scientific Games' lotteries unit, which sells wholesale lottery system services to clients in over 50 countries, is expected to see a 14% rise in adjusted earnings before interest tax depreciation and amortisation to $498 million in fiscal 2022, the company said this week.

In introductory meetings with fund managers in Australia, the company pitched the unit as an "infrastructure-like" business with high margins and long-term contracts that has been resilient during the COVID-19 pandemic, the sources said.

That, and its high growth prospects, could justify a valuation of up to 22 times its earnings, both sources said.

Management will hold meetings with a select group of fund managers in Australia next week to seek a cornerstone investor for the listing, one of the people with knowledge added. (Reporting by Paulina Duran in Sydney; Editing by Himani Sarkar)