Slot Machine Sales Jump 41% With Casinos Refreshing Their Floors
$6,000 Welcome Bonus
(Bloomberg) -- Light & Wonder Inc., a major casino-equipment supplier, reported fourth-quarter sales and operating earnings that beat Wall Street forecasts, thanks to a surge in slot-machine sales.
Revenue from continuing operations rose 18% to $682 million, the company said Wednesday, exceeding analysts’ estimates of $654.9 million. Adjusted earnings before interest, taxes, depreciation and amortization of $265 million also beat forecasts.
The company, formerly known as Scientific Games, has been in transition over the past two years, reducing debt by selling its sport-betting and lottery businesses. Total debt at year-end stood at $3.89 billion, down from $8.69 billion 12 months earlier.
Matt Wilson, who took over as chief executive officer in October, said in an interview that he believes it was the right decision to exit sports betting as the market is consolidating around just three big operators, and a business-to-business supplier could get squeezed in that scenario.
The Las Vegas-based company now operates in three businesses: traditional games for the casino floor, real-money online gambling and social games. Game concepts that succeed in one can work in others with far less investment than if the company was starting from scratch, Wilson said.
Online gambling isn’t yet as profitable as Light & Wonder’s other businesses because the company still needs more states to allow that type of betting, Chief Financial Officer Connie James said.
Traditional slot machines were the star in the fourth quarter, with sales jumping 41%. Casinos in both the US and internationally have been replacing dated machines with new models after years of underinvestment during the pandemic. Rival International Game Technology Plc reported sales and profit growth on Tuesday.
Wilson believes casinos will continue to reinvest.
“Our order book is very full,” he said. “These floors are kind of crying out for a bit of refresh.”
