Chavdar Vasilev is a journalist covering the casino and sports betting market sectors for CasinoBeats. He joined CasinoBeats in May 2025 and reports on industry-shaping stories across the US and beyond, including legislative debates, market...
Read Full BioIn its Q2 2025 earnings call, Light & Wonder (LNW) signaled cautious optimism about the future of its SciPlay social casino division, citing potential upside from increasing regulatory pressure on unregulated sweepstakes casino platforms.
While SciPlay’s quarterly revenue dipped slightly to $200 million (-2%), the company claims it outpaced the broader social casino market. LNW saw record revenue performances by titles like Quick Hit Slots and 88 Fortunes. However, Jackpot Party experienced a decline.
While revenue was down, SciPlay recorded improvements in both monetization and margins. That could signal that regulated social gaming may benefit from broader market dynamics.
- SciPlay Adjusted EBITDA rose to $74 million (up 6% year-over-year). The Adjusted EBITDA margin stood at 37%, up by 3% from Q2 2024.
- Direct-to-consumer (DTC) revenue reached $35 million in the quarter, representing 18% of SciPlay’s sales (compared to 13% in Q1). This result highlights diversification beyond the app-store channel.
- Average Revenue Per Daily Active User increased 4% YoY, reaching $1.08.
- Average Monthly Revenue Per Paying User rose 10% from Q2 2024 to $128.96
Still, in addition to revenue, other metrics that saw a decline include Monthly Active Users (down 4% to 5.2 million) and Daily Active Users (down 5% to 2 million). Furthermore, Player Conversion Rate (percentage of paying users) declined to 9.8%, down from 10.5% in Q2 2024.
The company attributed the decline in engagement to the underperformance of Jackpot Party. Still, Oliver Chow, LNW’s Executive VP, CFO & Treasurer, said:
“We are confident that we have the right initiatives in place to stabilize daily active users as we recalibrate Jackpot Party player engagement to return to growth.”
Shifting Legal Landscape Could Favor Regulated Operators
LNW CEO, President & Director, Matthew Wilson said that “it’s undeniable” that unregulated sweepstakes casinos are hurting the social casino segment.
However, Wilson noted that the company expects to benefit from “a more favorable market environment” in states that have cracked down on sweepstakes casinos:
“In states that have taken action to eliminate sweeps, we have seen a noteworthy uplift in our performance.”
“As this issue is further addressed, we expect broader implementations of regulations to be a positive catalyst for growth in the social casino industry.”
While regulating sweepstakes platforms is an outside factor, Chow added that the company is working internally to address the competition:
“We’ve identified some top-line erosion and increased marketing costs in the states where sweepstakes gaming is currently unregulated, and the team has navigated the dynamic UA environment well.”
This year has become critical for the sweepstakes casino segment in the US. Numerous states have taken regulatory and legislative approaches to ban the platforms.
Five states, including New Jersey, have passed laws to prohibit sweepstakes casinos. New Jersey’s Governor Phil Murphy hasn’t signed the ban, but even if he doesn’t, it will automatically become law on August 14. Previously, Montana, New York, Connecticut, and Nevada officially banned sweepstakes casinos.
Meanwhile, states such as Louisiana, Maryland, Mississippi, West Virginia, and Delaware have taken regulatory actions through cease-and-desist orders to compel the platforms to comply.
Furthermore, sweepstakes casinos face a series of lawsuits in states like Alabama, Illinois, and California. The Golden State is also advancing a bill to ban the sites.
LNW has long distanced itself from the sweepstakes model, reaffirming its focus on being regulation-compliant. Social gaming apps monetize through in-app purchases, but users cannot cash out prizes.
Q2 2025 Performance: Margins Expand Despite Revenue Dip
Aside from SciPlay, as a whole, LNW reported a slight revenue decline of 1% YoY to $809 million. Still, it achieved strong profitability metrics:
- Net Income: $95 million (+16% YoY)
- Diluted EPS: $1.11 (+23%)
- Adjusted EBITDA: $352 million (+7%)
- Adjusted NPATA: $135 million (+4%)
Free cash flow was impacted by $73 million in legal costs and $2 million in acquisition-related expenses, resulting in a decrease to $29 million. Still, executives reaffirmed full-year guidance, citing strong iGaming results and cost discipline.
Record iGaming Revenue, Legal Victory Bolsters Confidence
In the iGaming segment, revenue hit a record $81 million, up by 9% YoY. In the US and Canada, the growth was even more substantial at 25%.
Executives credited the Huff N’ Even More Puff slot as the number one game on its aggregator network. Notably, the slot has been seen as the replacement of the Dragon Train fleet. These games have resulted in a legal battle between LNW and Aristocrat. The latter claims copyright infringement.
At the end of the quarter, a favorable ruling for LNW in the case drove its stock up by 10%. Wilson noted the legal win and stated that the company wants to “move forward and get this thing closed out and get it in the rearview mirror.”
Company to Delist from Nasdaq, Focus Solely on ASX
During the earnings call, LNW also confirmed that it plans to delist from Nasdaq and consolidate its public listing on the Australian Securities Exchange (ASX). The company expects to complete the transition by the end of November 2025.
LNW cites a key reason for the move as the growing base of Australian investors, which has increased from 9% to approximately 40% of shareholders.
Wilson says the decision comes after six months of engaging with investors:
“We think transitioning to a sole ASX listing will help consolidate liquidity into a deep and liquid market that has a comprehensive and deep understanding of the gaming sector, and we expect it to unlock maximum shareholder value and align with our growth plans that we outlined back in May at our Investor Day.”
As part of this transition, Light & Wonder increased its share repurchase program to $1.5 billion, with over $950 million in authorization still available.
