The gaming manufacturing industry appears to be in a state of transition and nowhere is it more noticeable than in Las Vegas where much of the change is at center stage.
That’s not lost on Matt Wilson, the CEO of Light & Wonder, a gaming equipment manufacturer based in Las Vegas.
Consider:
— IGT, the London-based company run by Italian operators that have manufacturing and distribution outlets galore in Nevada, announced a merger with smaller rival Everi Holdings then, months later in July, said that deal was off and both operations were being absorbed by Apollo Global Management, owners of The Venetian and Palazzo, for $6.3 billion. The new deal is expected to close late this year or early next year.
— Aristocrat Gaming, a subsidiary of Australia-based megacompany Aristocrat Leisure Ltd., developers of the popular Buffalo slot machine franchise, in August opened a 265,000-square-foot facility for manufacturing and distribution to North and Latin America in Henderson.Aristocrat Interactive also recently announced it entered a deal with Digital Knights to form a new iGaming brand, TangoBet.
— Konami Gaming, one of the market leaders in the United States, maintains a massive presence in Las Vegas and was one of the first to begin promoting its growing Bingo Frenzy Stampede, What the Duck, and K-Pow! Pig lines of slot machines for October’s Global Gaming Expo.
Meanwhile, the local company that changed its identity and focus on the heels of the coronavirus pandemic has quietly emerged as one of the big growth stories of the industry.
Light & Wonder, formerly known as Scientific Games, saw its gaming operations sector report its 16th consecutive quarter of growth in August’s second-quarter earnings call.
Systems revenue grew 14 percent, driven by higher hardware sales and a software licensing deal with a partner in Asia.
“As it relates to international success in the quarter, given international shipments remain high and drove the beat, (Light & Wonder) management noted results were driven by traditional Asian markets (Singapore, Macao and the Philippines) – a multi-year opportunity given the Asian market was slower to recover post-COVID than the U.S.,” said Truist Securities gaming analyst Barry Jonas in a note to investors. “Longer-term, management sees future international openings, including the United Arab Emirates, Thailand and Japan, as promising for the slot supplier.”
Worldwide projects
Wynn Resorts Ltd. is building its $3.9 billion Wynn Al Marjan Island on 115 acres in the Ras Al Khaimah emirate on the Arabian Gulf inlet of the Persian Gulf. MGM Resorts International has begun work on Japan’s first integrated resort in Osaka. And, multiple companies have begun investigating the prospect of operating casinos in Thailand, which is considering legalizing gambling.
Even with new markets emerging worldwide, Wilson has been keeping his focus on just making Light & Wonder games the best they can be.
“I like to say we’re a 3-year-old company since the rebrand and the emergence of Light & Wonder, like a phoenix out of the ashes of Scientific Games,” Wilson said in an exclusive interview with the Review-Journal.
“And so I think the benefit for us is we’re on the other side of that cultural integration. So our strategy is clear, our goals are clear. We know what we need to focus on. And I always say to the team, ‘Control the controllables that some of our competitors are going to go through what could be a distracting period of time,” he said referring to the ownership changes underway at IGT.
Part of the focus for Light & Wonder has been to provide its games for multiple channels. It isn’t just about cranking out slot machines from a warehouse – it’s translating those customer favorites to a digital format for the growing iGaming sector.
Wilson admits iGaming — the ability to legally play slot machines and other casino games over the internet — hasn’t grown as rapidly as he expected. Online sports betting has taken off, but only a handful of states have legalized online casinos and much of today’s play is made through illegal offshore casinos.
“It’s probably one area that hasn’t lived up quite to our expectations that we set out in 2022 was the rate of iGaming expansion,” Wilson said. “We thought by now we’d have more states having regulated iGaming. There’s seven states legal at the moment in the U.S. We don’t see it a very active session in the next year. We don’t see a huge amount of regulation happening in 2025, but we do believe beyond 2025 that the digitization of gaming is inevitable. It’s going to happen at some stage in other states. I think consumers demand it. They demand digitization in every other vertical in their life.”
The only iGaming available in Nevada is through online sports betting and limited online poker play. Casino lobbyists have successfully kept online slot and table play at bay, presumably to protect their brick-and-mortar investments.
“It’s not something we really have a whole lot of control over,” Wilson said.
Record iGaming revenue
But even with iGaming growing at a slow pace, Light & Wonder reported record revenue of $74 million in the sector in the last quarter, up 6 percent year-over-year.
Jonas said gross gaming revenue for iGaming hit records in Canada and the United States and that Light & Wonder management has pledged to continue to invest in content and product development.
Wilson didn’t elaborate on what his company will promote at G2E, the largest annual gathering of the gaming industry, scheduled Oct. 7-10 at The Venetian Expo Center.
The company likely will show off its popular Huff N Puff line of games.
Daron Dorsey, executive director of the Association of Gaming Equipment Manufacturers, said investing in product development has become the typical course of the industry because it is centered on technology.
“It’s the natural course and scope of the technology innovation story that comes from gaming suppliers,” Dorsey said. “We’re not in a place where 20, 30 years ago, where you had mechanical reel devices. If you look at the migration, it’s a lot of software. These are all technology companies now in a highly regulated gaming space.”
The new facilities being built are like computer manufacturing plants with more software designers than assembly-line workers.
“That’s the next natural progression in this because it’s game content and math ideas and software development and innovations that make the games more exciting and enjoyable for people,” Dorsey said. “And you can do those in a much more innovative fashion now that there’s a high level of software development and computer engineers and computer scientists and mathematicians and graphic designers. It’s not some mechanical device that’s made with gears the way that they originally came out.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.
