Light & Wonder Adds to Loyalty Offerings with House Advantage Acquisition

Posted on: October 9, 2022, 03:00h. 

Last updated on: October 9, 2022, 01:21h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

In a move to bolster its loyalty platform portfolio, Light & Wonder (NASDAQ: LNW) announced the acquisition of technology provider House Advantage.

Light & Wonder
The Light & Wonder logo. The company is buying House Advantage. (Image: PR Newswire)

Financial terms of the transaction weren’t disclosed, but the buyer is paying cash for the target. Loyalty programs are popular with casino customers, and operators leverage that data for a variety of reasons, making back-end technology important. The House Advantage purchase helps Light & Wonder shore up its rewards program menu.

House Advantage’s core platform, “HALo”, provides a comprehensive omnichannel loyalty and marketing solution by integrating and collecting data from multiple systems across land-based and digital channels,” according to a statement.

Privately held House Advantage was founded in 2004 and has offices in Las Vegas and India. The company’s clients include gaming operators and traditional hotel and lodging firms. House Advantage Founder and CEO Jon Wolfe is joining Light & Wonder as senior vice president, while 20 other staffers from the company are joining the buyer’s team as well.

Light & Wonder Adding to Tech Stack

Light & Wonder’s acquisition of House Advantage could prove to be an efficient avenue for adding data and technology that could have been time-consuming to generate in organic fashion.

“HALo’s unified technology layer offers an open framework for customers to seamlessly integrate House Advantage solutions into their casino management systems (CMS) to deliver highly tailored marketing programs and incentives,” according to the statement.

The purchase also jibes with Light & Wonder’s transformation, which includes moving away from lower margin gaming segments into higher growth segments that are driven by technology.

Last year, the company announced sales of its OpenBet sports wagering and SG Lottery units, which enabled the firm to slash its debt to $4 billion from $8.8 billion.

“The addition of HA’s industry leading software and technology solutions allows us to capitalize on the growing convergence of digital and land-based gaming. With HALo, we gain a powerful omnichannel player loyalty solution that complements our current product family and enables us to deliver a truly differentiated offering,” said Light & Wonder interim CEO Matt Wilson in the statement.

Not the Light & Wonder Deal Some Are Hoping For

Time will tell if the House Advantage purchase pays dividend for Light & Wonder, and if it’s accreative to earnings. But for now, it’s not the deal some investors were hoping for.

Last week, activist investor Engine Capital wrote letters to the boards of Light & Wonder and SciPlay (NASDAQ: SCPL) urging the former to acquire the latter.

Light & Wonder abandoned its bid for SciPlay last December. But Engine Capital is pressing for the deal to be renewed, noting that acquisition would immediately add to the buyer’s earnings and eliminate valuation drag.