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Description of the Business and Summary of Significant Accounting Policies | 6 Months Ended
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Jun. 30, 2025
Accounting Policies [Abstract] |
Description of the Business and Summary of Significant Accounting Policies | Description of the Business We are a leading cross-platform global games company with a focus on content and digital markets. Our portfolio of revenue-generating activities primarily includes supplying game content and gaming machines, CMSs and table game products and services to licensed gaming entities, and electronic pull tabs and related services to charitable gaming entities; providing social casino and other online games, including casual gaming, to retail customers; and providing a comprehensive suite of digital gaming content, distribution platforms and player account management systems, as well as various other iGaming content and services. We report our results of operations in three reportable business segments—Gaming, SciPlay and iGaming—representing our different products and services. Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and include the accounts of L&W, its wholly owned subsidiaries and those subsidiaries in which we have a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of L&W and its management, we have made all adjustments necessary to present fairly our condensed consolidated financial position, results of operations, comprehensive income and cash flows for the periods presented. Such adjustments are of a normal, recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in our 2024 10-K. Interim results of operations are not necessarily indicative of results of operations to be expected for a full year. Significant Accounting Policies There have been no changes to our significant accounting policies described within the Notes of our 2024 10-K. Acquisition of Grover On May 16, 2025, we completed the acquisition of Grover Charitable Gaming (“Grover”) for an upfront consideration of $850 million, subject to certain customary purchase price adjustments as set forth in the purchase agreement, and up to $200 million in cash in the aggregate in the form of contingent acquisition consideration payments over a four-year period based on achievement of certain revenue metrics. Grover is a leading provider of electronic pull-tabs currently distributed over five U.S. states: North Dakota, Ohio, Virginia, Kentucky and New Hampshire. We accounted for this acquisition using the acquisition method of accounting whereby the total purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on respective estimated fair values. The estimated fair values of the acquired assets, assumed liabilities and resulting goodwill are subject to adjustment as we finalize our purchase price accounting, and such adjustments could be material. We incurred $14 million in acquisition-related costs, which were recorded in restructuring and other for the six months ended June 30, 2025. The following table summarizes the preliminary allocation of the purchase price, which is expected to be finalized by December 31, 2025:
|  | May 16, 2025
Accounts receivable |  | $ | 9 |
Property and equipment |  | 52 |
Intangible assets |  | 464 |
Goodwill |  | 392 |
Other current and non-current assets |  | 1 |
Total assets |  | 918 |
Total current and non-current liabilities |  | 4 |
Net assets acquired |  | $ | 914 |
Consideration transferred: |  |
Cash, net of purchase price adjustments |  | $ | 858 |
Fair value of contingent consideration(1) |  | 56 |
Total consideration transferred |  | $ | 914 |
(1) The fair value was determined using an income approach primarily based on reaching certain revenue-based metrics, with a discount rate of 6% and a maximum payout of up to $200 million.
Accounts receivable and other current and non-current assets and liabilities were valued at the existing carrying values, which approximated their estimated fair values. The fair value of property and equipment, which primarily consisted of electronic pull tab gaming devices, was determined using replacement cost and cost-plus pricing. The fair values of intangible assets that have been preliminarily identified were determined using a combination of the excess earnings method and the relief from royalty method using Level 3 inputs in the fair value hierarchy established by ASC 820. The discount rates used in the valuation analysis ranged between 14% and 15%, and the royalty rates used were between 2% and 18%. The following table details the intangible assets that have been preliminarily identified:
|  | Fair Value |  | Weighted Average Useful Life (Years)
Customer relationships |  | $ | 345 |  |  | 15
Intellectual property(1) |  | 91 |  |  | 5-7
Trade name |  | 28 |  |  | 15
(1) Primarily consists of game content and platform technology.
The factors contributing to the recognition of acquired goodwill are based on enhanced financial and operational scale, market diversification and expansion, expected synergies, assembled workforce and other strategic benefits. We expect the resultant goodwill to be deductible for income tax purposes. Grover revenue and net income since the acquisition date and through June 30, 2025 included in the consolidated statements of operations and comprehensive income were not material. The Grover operating segment was aggregated with our Gaming reportable business segment. Computation of Basic and Diluted Net Income Per Share Basic and diluted net income per share are based upon net income divided by the weighted average number of common shares outstanding during the period. Diluted net income per share reflects the effect of the assumed exercise of stock options and RSUs only in the periods in which such effect would have been dilutive to net income. For the three and six months ended June 30, 2025, we included 2 million and 1 million, respectively, of common stock equivalents in the calculation of diluted net income per share. For the three and six months ended June 30, 2024, we included 2 million of common stock equivalents in the calculation of diluted net income per share for both periods. New Accounting Guidance There have been no recent accounting pronouncements or changes in accounting pronouncements since those described within Note 1 of our 2024 10-K that are expected to have a material impact on our consolidated financial statements.

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- Definition The entire disclosure for the business description and accounting policies concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Accounting policies describe all significant accounting policies of the reporting entity. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 235 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/235/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 275 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/275/tableOfContent + Details
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