New name reflects Las Vegas company’s shifting focus to online gambling content
by Katherine Sayre, The Wall Street Journal, March 1, 2022
Slot-machine and game developer Scientific Games Corp. said it plans to rebrand as Light & Wonder Inc. after the company shed its lottery and sports-betting businesses to focus on content for casinos and online gambling.
Scientific Games said it expects to announce the name change and its latest earnings report on Tuesday.
The company has said it seeks to increase its digital revenue share to 50% by 2024 by developing games to be shared across platforms, in slot-machines seen in casinos, in online gambling—also known as iGaming—and social gaming.
“That’s where the world is trending because in iGaming, particularly in the United States, the land-based operators are getting digital licenses, and they want to provide their players 360-degree access to the games that they have,” Scientific Games Chief Executive Barry Cottle said in an interview.
The announcement comes as online gambling—already popular in the U.K. and Europe—has become a growing force in the U.S. casino industry. Gambling is regulated state by state, and lawmakers have been slower to legalize online casinos, compared with the rapid spread of mobile sports betting in recent years.
Online casino games are legal in six states, while Nevada allows only online poker. Sports betting, meanwhile, has been legalized in 33 states and the District of Columbia.
Online casino business is projected to be as high as a $7 billion market in the U.S. in the next three to four years, depending on which states go forward with legalization, according to industry analysts.
Scientific Games has reached about 40% digital revenue share so far, and its total market for online gambling and social gaming is $50 billion, Mr. Cottle said. The company said its name will be legally changed in the second quarter of this year.
“We believe Light & Wonder captures the essence of a great game,” Mr. Cottle said.
Last year, the company agreed to sell off its lottery and sports-betting businesses in separate deals, part of a plan to reduce debt and focus on gaming content. The company reported debt of $8.8 billion and cash of $844 million as of Sept. 30 last year.
Entertainment giant Endeavor Group Holdings Inc. agreed to buy the sports-betting business for $1.2 billion in cash and stock. Brookfield Business Partners LP agreed to buy the lottery business for about $6 billion.
Scientific Games has also made recent acquisitions to boost its content offerings, including ELK Studios, a European game developer based in Stockholm, and Lightning Box, a Sydney based slot-developer. It also acquired Authentic Gaming, based in Malta, which provides live-dealer content, in which games such as roulette and blackjack are broadcast live from studios. Scientific Games said it plans to expand the live-dealer offerings to the U.S. by opening new studios.
“It’s inevitable that iGaming is going to happen in states where gaming exists today…because players want to play on their phone,” Mr. Cottle said. “We see it in every medium, from games to music to movies and sports betting.”
Write to Katherine Sayre at [email protected]