Light & Wonder Pulls the Plug on Live Dealer Games
Light & Wonder has announced its decision to discontinue and divest its live-dealer iGaming operations. The disclosure, which was made during the company's fourth-quarter earnings call, was briefly mentioned in the presentation and was described as a move that would provide a modest uplift to cash flow. This decision marks a shift in the company's strategic focus as it aims to refine its offerings and streamline its operations.
LISTEN TO THIS ARTICLE:CEO Matt Wilson highlighted the company's continued progress over the past year, emphasizing Light & Wonder's commitment to sustainable growth. He also spoke about the company's recent acquisition of Grover Gaming, which was revealed the previous week. Wilson described Grover Gaming as a business with an attractive recurring revenue model and a loyal customer base, reinforcing the strategic value of the acquisition.
Gaming operations remained a strong point for the company, with Wilson noting an increase of 850 installed units in North America. Among these, 11 machines ranked within the top 25 in Eilers' slot machine rankings. Wilson expressed optimism about the trajectory of gaming operations and stated that he expects robust growth to resume in 2025. He pointed out that Light & Wonder holds the leading share of slot machine shipments in both North America and Australia, underscoring the company's market strength.
While SciPlay, Light & Wonder's social casino division, had a relatively flat fourth quarter, Wilson asserted that 2024 was another record year for the segment. He credited the company's nimble approach in adapting to market conditions and highlighted that SciPlay had outperformed the broader market. However, he acknowledged that the game Jackpot Party did not meet expectations in the fourth quarter.
In the iGaming sector, the company executed a series of major launches, including a partnership with FanDuel. Wilson noted that accelerating the release of first-party content remains a key priority moving forward.
CFO Connie Chow provided additional financial insights, reporting a 10% increase in annual revenue and a 4% rise in revenue during the fourth quarter. Other financial indicators included an 8% increase in fourth-quarter operating income and an 11% improvement in cash flow for 2024. North American revenue per slot per day saw a modest increase of 2%.
Chow emphasized the continued strength of Light & Wonder's gaming portfolio, noting that the company's slot cabinets were selling at an average price of $18,000 per unit. She also detailed the company's expansion in Brazil's iGaming market, with 50 new game titles launched through various operators. Additionally, Light & Wonder extended its revolving line of credit from $750 million to $1 billion, reinforcing its financial flexibility.
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Financially On Target
During the earnings call, Wilson expressed confidence in the company's ability to meet its 2025 cash-flow target of $1.4 billion. He stated that revenues from the Grover acquisition would contribute positively to this goal and reiterated his belief that Light & Wonder continues to see strong growth potential in states where iGaming is already legalized.
Wilson also addressed regulatory challenges, including issues surrounding the banned Dragon Train game. He noted that the company had successfully navigated the situation and that it was nearly resolved from an operational standpoint. He announced that new Huff' n Puff games and Wizard of Oz-themed products were in development and expected to perform well throughout the year.
Trade tensions and their impact on the gaming industry were also discussed. Chow described the situation as fluid and dynamic and stated that Light & Wonder was working to mitigate potential disruptions by diversifying its supply chain.
The topic of sweepstakes games was raised as well. Wilson clarified that Light & Wonder does not align with these types of unregulated contests, as they do not fit within the company's strategic vision. He acknowledged monitoring the sector but pointed out increasing legal challenges facing the sweepstakes industry.
When asked about slot machine demand, Wilson responded that there had been no significant decline. He observed that major casino operators continued to show resilience, citing several encouraging trends in the market. He also expressed optimism about the growing prevalence of revenue-sharing games on casino floors, describing it as a positive development for the industry.
Light & Wonder is also considering a sole listing on the Australian Securities Exchange as part of an ongoing listing review. The move is aimed at determining the best outcome for shareholders. The announcement accompanied the company's fiscal year 2024 results, which saw Light & Wonder achieve record consolidated revenues of $3.2 billion. Early indicators from the first two months of 2025 suggest that the company is on track for further growth.
Wilson concluded by setting May 20 as the date for an investor day, during which Light & Wonder plans to provide additional updates and announcements regarding its future strategy and growth initiatives.
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