Light & Wonder said it would discontinue and divest from its live casino business yesterday (25 February) after a strategic review.
The US land-based and iGaming giant said this reflected its commitment to allocating resources to the most impactful parts of the business, where it had a “good line of sight” to meaningful returns on investment.
NEXT.io understands that Light & Wonder’s exit from the vertical, announced on its Q4 earnings call, will leave just Evolution and Playtech as the two remaining live casino suppliers in the US.
Matt Wilson, Light & Wonder CEO, said: “While we’re still in the relatively early days of investing in the business, we strive to stay nimble as an organisation and are thus focusing on the risk reward profile of our other businesses, which have better visibility to superior returns relative to live casino.”
Given it was in the investment stage of the live business, the supplier said, it expected to see a modest uplift in adjusted EBITDA by discontinuing the operations.
It added that the decision highlighted the rigour with which it makes capital allocation decisions, as well as the willingness of its team to be objective in its decision to drive value for shareholders.
Light & Wonder highlights live casino pricing
The strategic review into the category, Wilson said, identified changes to the operator and supply dynamics which resulted in some degradation in pricing.
While he admitted exiting live casino shuts down a portion of the addressable market for iGaming, he argued the vertical ultimately proved to be a smaller percentage than the business had originally anticipated.
Instead, Light & Wonder will focus on first person perspective (1PP) content, aggregation and monetisation tools to drive growth on the online side.
Wilson added: “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 clear line of sight to better returns.”
The decision follows a shake-up in the company’s iGaming leadership, with long-time employee Simon Johnson promoted as CEO of the division.
This was accompanied by the promotion of Nathan Drake, formerly the CPO of the gaming business, to Light & Wonder’s overall chief product officer.
The provider first launched its live casino games in partnership with Authentic Gaming in October 2023.