Light & Wonder (LNW) plans to ditch its live casino division following a “thorough strategic review,” according to details revealed during its Q4 earnings call. As a result, LNW’s decision to “discontinue and divest” will leave Evolution and Playtech as the US go-tos for live dealer offerings.
On the call, Light & Wonder CEO Matt Wilson said the decision reflected its “commitment to allocating resources” to its “most impactful” divisions. Specifically, he referenced areas where LNW has a “good line of sight into meaningful returns” on investment.
While we’re still in the relatively early days of investing in the business, we strive to stay nimble as an organization and are thus focusing on the risk-reward profile of our other businesses, which have better visibility to superior returns relative to live casino.
CFO pinpoints degradation in live casino pricing
In his comments, CFO Oliver Chow said that LNW will focus on areas with a strong growth trajectory in the future. He mentioned recentering the business around LNW’s “wheelhouse” and “core competencies.” Chow specifically referenced prioritizing first-person perspective (1PP) content, “great” aggregation, and tools to help operators better monetize.
He noted that LNW was still in the investment stage of the live business. As a result, he said discontinuing live online casino operations would mean a modest uplift in adjusted EBITDA.
He said that although exiting live casinos will nullify a portion of the addressable online casino market, it’s a smaller percentage than LNW initially anticipated. Further, he said the pricing dynamics have declined since LNW’s initial investment.
Importantly, in the iGaming business, we are focusing on high-return initiatives with a strong growth trajectory across the industry…. Our planned divestiture of Live Casino was a decision to allow for the reallocation of resources to other parts of the business, supported by strategic reviews that are conducted consistently across the enterprise to maximize our return on investments.
Chow added that the move highlighted LNW’s rigour in making capital allocation decisions and the team’s willingness to seek shareholder value objectively.
I think it’s an example of these strategies aren’t set and forget. We review them periodically and just make sure they’re working for us. And we made the decision to divest and then just focus on areas that we can see a clear line of sight to better returns.
Studios’ future remains unclear
LNW acquired Authentic Gaming in 2021, when the former was still known as Scientific Games, to enter the US live dealer space. It launched its first studio in Michigan in 2023.
The details revealed during LNW’s Feb. 25 call didn’t clarify what will happen to the studios beyond the plan to “discontinue and divest.”
Based on that alone, the description sounds like LNW might shutter studios rather than expect a buyer to continue running the live games. That wording, however, is ambiguous, and the outcome likely depends on the buyer.
Bonus contacted LNW for clarification but did not receive an immediate answer. We will update this story if we receive a response.
The decision to drop LNW’s live dealer arm follows a leadership shake-up that saw long-time employee Simon Johnson promoted to iGaming CEO. At the same time, Nathan Drake, the company’s former iGaming chief product officer, became LNW’s overall CPO.
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