Prediction markets have “gone parabolic,” warns L&W CEO
Table of contents
- Light & Wonder president and CEO Matt Wilson urged the gaming industry to unite against prediction markets, warning the rapidly growing sector poses a direct threat to igaming.
- Wilson acknowledged the company’s 2022 forecast of three new igaming states by 2025 was wrong, but said political conditions for US expansion are now improving.
- Kalshi and Polymarket now have double the market value of DraftKings and FanDuel, Wilson said, describing their rise as “amazing and brutal.”
Matt Wilson, president and CEO of Light & Wonder, has urged the gaming industry to act collectively against the rapid rise of prediction markets, warning they pose a direct threat to igaming’s growth in the United States.
Wilson made the remarks on Tuesday, 19 May, on the opening day of the 47th annual Gaming Conference hosted by the Nevada Society of Certified Public Accountants at Circa Las Vegas.
Writing for CDC Gaming, Buck Wargo, a veteran gaming journalist based in Las Vegas, reported Wilson’s comments in full following a fireside discussion moderated by Rick Arpin, managing partner and gaming leader at KPMG.
Igaming targets missed
Wilson told the audience that Light & Wonder drew up a long-term growth plan in 2022 projecting EBITDA expansion from $900 million to $1.4 billion, with one central assumption: that three major igaming states would legalise online casino gaming by 2025.
Matt Wilson, president and CEO of Light & Wonder, said:
“We were 100% wrong on that. We haven’t had a single incremental state. We thought igaming was about to go into this massive way of expansion, but today seven states have igaming.”
Despite the miss, the political landscape is shifting. Wilson noted that politicians are typically slow to expand gaming unless under fiscal pressure, and that pressure is now mounting. He said:
“You’re starting to see a big uptick in the idea of further expansion, whether it’s igaming or historical horse racing or land-based games. We’ve heard about the skill-based market in Pennsylvania and Virginia getting regulated. There’s a lot of activity happening on all fronts.”
Prediction markets threat
Wilson’s sharpest remarks addressed prediction markets, which have surged in prominence since dominating conversation at G2E last October. He said:
“This came out of nowhere and was the talk of G2E. It has gone parabolic over the last six months. Kalshi and Polymarket have double the market value of DraftKings and FanDuel. That’s amazing and brutal.
“People are playing prediction markets and that’s coming from somewhere. It’s not like there’s an infinite discretionary dollar for the casino.”
Light & Wonder does not currently operate in the prediction markets space, but Wilson acknowledged a growing threat to igaming specifically. He added:
“We don’t have a dog in the fight, but we play in the igaming space and there’s a threat it will get there one day. We know people are working on five-reel slot machines derived off complex contracts.
“If it’s a no for Nevada gaming regulators, then it’s a no for us. The industry needs to get together and work collectively to figure out how to slow this juggernaut down. It’s very hard to argue it’s not illegal gaming.”
The remarks align with a broader pushback from the casino sector. Minnesota this week became the first US state to criminalise the operation of prediction markets, while the AGA’s CEO has publicly challenged the CFTC’s stance on the products as the legal conflict deepens.
Focus on pure play
On industry structure, Wilson said the consolidation wave of the past decade is now reversing, a trend Light & Wonder has itself followed by divesting its lottery and platform businesses. He said:
“We’ve seen in the last five years a massive unwinding of that consolidation. I’m a big believer that companies that do one thing very well can be successful. These conglomerates tried to be everything. We figured out lottery companies and gaming companies don’t belong together. There’s no synergy there.”
On content, Wilson said Light & Wonder produces more than 150 batches of games per year, and cautioned against overconfidence in predicting hits. He said:
“If anyone in the industry says they know a game will be a hit, they’re lying to you. There’s safety in numbers. That’s why you put out 150 games.”
When asked which competitor’s title he wished he had made, Wilson singled out Aristocrat‘s Dragon Link, noting it “came from nowhere to be a monster hit.” The two companies, whose IP dispute over Dragon Train was settled earlier this year, remain the dominant rivals in the global slot market.
With igaming still confined to seven US states and prediction market platforms continuing to grow in both volume and valuation, Wilson’s remarks show growing urgency among traditional gaming operators.
Separately, Bank of America has estimated that annual US sports event contract volume could eventually reach $1.1 trillion, a figure that shows why suppliers and operators are watching the regulatory trajectory of prediction markets so closely.
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About the author
Bianca Máthe
Bianca Mathe joined the iGaming industry in 2018 and has since built extensive experience across multiple verticals, working with international gaming organizations on editorial, marketing, and media strategy. She brings a strong understanding of the regulatory, commercial, and technological forces shaping the global iGaming sector.
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