SG Games, full name Scientific Games, is an American software company. The organization recently announced it would be changing its name to Light and Wonder[1]. The move comes as the developer looks to go through a complete rebrand and focus on casino software. It’s unclear what effect this move will have on the iGaming industry, but SG Games are one of the oldest and most respected iGaming software providers in the US.
The History of SG Games
Scientific Games started out as a company producing instant lottery machines and was founded in 1973[2]. It introduced the first secure instant lottery machine ticket in 1974, which would go on to be a big success.
Although Scientific Games started in 1974, the company Light and Wonder can trace its roots all the way back to 1917, where it began life as a company known as Autotote. This was a manufacturer of totalizer systems that were used for pari-mutuel horse betting at race tracks across the US.
The totalizer system is similar to a scoreboard, displaying up-to-date odds. However, it also calculates payouts and produces tickets based on incoming bets. This form of early iGaming software had a big impact on the horse racing industry, and Autotote would later go on to purchase Scientific Games in 2000. The resulting company was renamed Scientific Games Corporation. Leading to popular Scientific Gaming casinos.
Autotote continued to have a big impact on the horse racing industry, with two-thirds of all money wagered in North America going through Autotote computers. Aside from this, Scientific Games also continued to grow as a software developer. The software company also acquired and launched slot, lottery, and instant win brands, including Bally, WMS, and Shuffle Master.
In 2019, the company launched its own social gaming platform as a publicly-traded company[3] and reported $2.7 billion in revenue in 2020. However, Scientific Games was also carrying $9.2 billion in debt, so the company made the decision to sell off its sports betting and lottery businesses.
By 2021, SG had sold its lottery businesses to Brookfield Business Partners for $6.1 billion, while the sports betting division was sold to Endeavour Group Holdings for $1.2 billion[4]. Now, in March 2022, the company has its full focus on casino gaming and social gaming. The rebrand to Light and Wonder marks a new chapter for the company as it looks to capitalize on a growing iGaming market.
What Does the Rebrand Mean for Light and Wonder?
Light and Wonder rebranded from SG because it aims to focus completely on the casino and iGaming market, including social casinos. It will be continuing to develop casino games for online casinos as well as slot machines for land-based casinos. In addition, the company aims to increase digital revenue share to 50% by 2024.
The online gambling industry has grown a lot over the last few years, with many US states now legalizing online casinos. What started in New Jersey has now spread to states including Pennsylvania, Michigan, and more.
“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. “We believe Light & Wonder captures the essence of a great game,” Mr. Cottle added.
For the states that haven’t legalized online gambling yet, social gaming provides an alternative. Social gaming platforms allow users to sign up and buy coins, which can then be used to play games. Coins can be exchanged for prizes, effectively allowing people to enjoy the thrill of casinos without gambling.
Modern online gaming platforms have a need for the latest and best software, which is where a company like Light and Wonder can have a big impact. Casinos players are always looking for new games and want to be able to enjoy slots, table games, and more from their mobile devices.
“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.”
Light and Wonder has also recently acquired acquisitions to expand its content offerings, including ELK Studios[5], a Stockholm-based European game developer, and Lightning Box, a Sydney-based slot producer. It also bought Authentic Gaming, a Malta-based company that delivers live-dealer content, including roulette and blackjack, which is streamed live from studios.
Live dealer games are one of the most in-demand types of casino games. These allow players to have the most realistic casino gaming experience, with real dealers live-streamed from a casino studio. Light and Wonder aims to open new facilities in the United States, bolstering its capabilities for providing live games to the next generation of online casinos.
Final Thoughts
Scientific Games has long been one of the leading casino software developers in the US. With headquarters in Nevada and also having a lot of involvement in the lottery and sports betting industries, a lot of gamblers around the world are familiar with the company. While SG has now become Light and Wonder, it still has a lot to offer to the iGaming world.
The US iGaming market is set to grow over the next few years as more states legalize online casinos. The total online gambling market in the US is expected to grow at a CAGR of 17.34 between 2022 and 2027[6]. Although a large proportion of this market is sports betting, there are also more online Light and Wonder casinos than ever operating throughout the country.
A legal and regulated online casino market can only mean good things for Light and Wonder, which aims to capture a larger share of the US online casino market. For states without legal online gambling, the company will still be able to launch its social gaming platforms. Social gaming has a lot of potential in the US, where online casino laws are restrictive.
As the market continues to change and develop, companies such as Light and Wonder must also grow and adapt to survive. The company has made some big changes in how its organization is run, and this will help it to make the most of the latest industry trends.
Sources
- Sayre, Katherine. “WSJ News Exclusive | Slot-Machine Developer Scientific Games to Change Name to Light & Wonder.” The Wall Street Journal, Dow Jones & Company, 1 Mar. 2022, https://www.wsj.com/articles/slot-machine-developer-scientific-games-to-change-name-to-light-wonder-11646168400
- Holding Corporation Financial Reports and Press Materials … https://www.library.unlv.edu/speccol/finding-aids/MS-00686.pdf
- Matthew Crowley, CDC Gaming Reports ·. “SciPlay Ipo, Loss Reductions Buoy Spirits for Scientific Games.” CDC Gaming Reports, https://www.cdcgamingreports.com/sciplay-ipo-loss-reductions-buoy-spirits-for-scientific-games/
- Person, and Niket Nishant Krystal Hu. “Endeavor to Buy Sports Betting Unit from Scientific Games for $1.2 Bln.” Reuters, Thomson Reuters, 28 Sept. 2021, https://www.reuters.com/business/ufc-owner-endeavor-buy-sports-betting-firm-openbet-12-bln-2021-09-27/
- Levy, Joe. “Scientific Games Acquires Elk Studios.” EGR Intel, https://egr.global/intel/news/scientific-games-acquires-elk-studios/
- “United States Online Gambling Market Expected to Register a CAGR of 17.34% between 2022 and 2027 – Researchandmarkets.com.” Business Wire, 28 Feb. 2022, https://www.businesswire.com/news/home/20220228005590/en/United-States-Online-Gambling-Market-Expected-to-Register-a-CAGR-of-17.34-Between-2022-and-2027—ResearchAndMarkets.com
