Light & Wonder has made an important announcement during the company’s Q4 earnings call, confirming that it would be winding down its live casino operations, and specifically in the United States.

Light & Wonder to wind down live casino operations

In a full transcript available on Investopedia, Light & Wonder CEO Matt Wilson explained that the business’ goal was to stay "nimble," meaning competitive relative to the challenges it faces. The company announced that following a strategic review, it would discontinue and divest its live casino business.

Profitability and strong returns are uppermost on Light & Wonder’s mind, Wilson explained, meaning that not all verticals are worth pursuing in the same way. In a statement during the earnings call, Wilson captured the essence of the company’s decision:

"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."

What this means is that in the United States specifically, Playtech and Evolution will likely remain the sole two purveyors of such content, although others, such as Pragmatic Play have been making forays into the vertical in North America as well.

Wilson similarly pointed out that the company is now refocusing its efforts on iGaming, with the recent appointment of Simon Johnson to lead the department. Part of this growth will be based on a "regionalized" approach, with each high-value market targeted by the company in a bespoke manner.

Brazil is an important future market for Light & Wonder, for one, and a jurisdiction where Johnson’s guidance can be crucial.

Part of the addressable market will go, but it’s not all bad

The issue with the live casino segment is not so much to do with the fact that the market is not promising as it has to do with the inherent challenges in maintaining a strong pace in that particular segment.

Besides, the expected returns are much smaller, Wilson seemed to suggest, relative to the necessary effort. Ultimately, the decision came after Light & Wonder was unhappy with how much of the market seemed to hold, choosing to opt out ahead of time rather than doubling down on what it considered to be a losing strategy.

Although Light & Wonder will give up a part of the addressable market, the company is not worried about it too much and will redeploy any money it generates from asset sales back into its existing operations.

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