International Game Technology (IGT) will discontinue its electronic tables game division by 2027 as part of a strategy to focus on its core business goals and growth, according to recent reports. This decision represents a significant pivot for the company, further illustrating a trend among major players in the gaming industry toward consolidation and a re-emphasis on core operations.
Last year, IGT merged with Everi Holdings in a $6.3 billion deal led by Apollo Global Management. A notable early change following this acquisition was the separation of IGT’s lottery division, which became Brightstar Lottery. Now, this latest decision to shut down the ETG division reinforces the strategy of narrowing IGT’s scope instead of broadening it.
This shift mirrors developments at Light & Wonder (L&W), formerly known as Scientific Games, which sold off its lottery and sports betting segments in 2021. Since then, L&W has concentrated on games and systems, with its stock up 30% over the past five years. CEO Matt Wilson remarked on the success of their streamlined organization, expressing a commitment to focusing on creating high-quality games across platforms.
Casino operators are also trending toward consolidation, especially regarding their digital ventures. Following the repeal of the Professional and Amateur Sports Protection Act (PASPA) in 2018, there was a frenetic push for "omnichannel" strategies. However, several major casino firms are now retreating from those extensive digital commitments.
Wynn Resorts, for instance, closed its WynnBet online sportsbook in 2023. Instead of increasing investments in digital platforms, the company redirected its resources toward developing a new resort in the UAE and pursuing other land-based opportunities. Wynn's CFO, Julie Cameron-Doe, cited dissatisfaction with the costly online user acquisition process as a primary reason for withdrawing from digital betting, emphasizing the need for more effective capital deployment.
Las Vegas Sands, once at the forefront of exploring digital gambling options, also scaled back following the death of its founder, Sheldon Adelson. After previously investigating opportunities through Sands Digital Services, CEO Patrick Dumont determined in October that pursuing this avenue no longer aligned with the company’s long-term objectives.
Meanwhile, Penn Entertainment, which spent $2.5 billion on online sports betting deals with ESPN and Barstool Sports that ultimately did not succeed, has now streamlined its digital strategy to focus solely on theScore brand. This pivot has been well-received in the stock market, with shares rising more than 40% this year.
Looking ahead, two prominent casino operators, MGM and Caesars, might change ownership by year’s end. Caesars was recently acquired in a $17.6 billion deal by billionaire Tilman Fertitta, while MGM is currently evaluating an $18 billion takeover bid from its largest shareholder, Barry Diller.
Even before the acquisition, Caesars was the subject of speculation surrounding the potential spinoff of its digital business, which has been outpacing growth in its traditional operations. Neither Caesars nor Fertitta has disclosed plans regarding the future of the digital arm since the confirmation of the acquisition.
Regarding MGM, although the company has heavily invested in digital endeavors, including its BetMGM joint venture with Entain, Diller’s interests appear to lie more with MGM’s physical assets. He stated that MGM represents a valuable business model and believes its assets are undervalued.
In contrast to the consolidation mindset among operators and suppliers, several online sports betting companies are expanding into prediction markets. Companies like DraftKings and FanDuel are leading the charge, with DraftKings acquiring Railbird exchange and launching its own exchange, while FanDuel has partnered with CME Group to launch FanDuel Predicts.
However, this expansion is fraught with risk. Many online sports betting operators now juggle state-licensed betting, iGaming, and federally licensed prediction products, a balance that may prove unsustainable as states increasingly scrutinize prediction operators. This legal push could lead to implications that hinder further diversification within the sports betting sector.
DraftKings has projected that its costs related to predictions could reach up to $300 million this year, similar to FanDuel’s expectations. Such financial commitments carry significant risks, especially given that both companies have seen their stock values drop—51% for FanDuel under Flutter Entertainment and 31% for DraftKings—this year.
