Aristocrat Leisure is considering adding a new market to its portfolio. Historically dedicated to supplying slot machines and digital games to the casino industry, the Australia-based company is eyeing a lucrative and rising activity that is already worth hundreds of millions of dollars, with no signs of slowing down. According to statements made by its CEO, Trevor Croker, Aristocrat could soon be getting involved in sports gambling.
During an interview with gaming industry media outlet Fantini Research, Croker indicated that sports gambling is on the company’s radar. He told the entity’s CEO, Frank Fantini, “We have the balance sheet, and we also have the intent – as you can see from our previous acquisitions – to either build or buy. We continue to monitor the market, looking at what are the right options for us. We get a lot of feedback from our [land-based operator] customers, and we are listening a lot to our customers, about what they want in a solution, and how they think is the best way to enter.”
It would be a smart move, if approached the right way. Aristocrat has a huge portfolio of clients that spans the globe, including in Asia, North America and its home country. It’s likely the biggest, and most lucrative, target would the North American market, with more states continuing to sign off on sports gambling legislation. In just two years, half the states in the country now have sports gambling and a handful more are working on their own versions of legislation for the activity. By this time next year, fueled even more by revenue losses from COVID-19, it’s possible almost the entire country will have legal sports gambling.
The introduction of the new channel would boost a bottom line that is already on the rise. After Aristocrat began to introduce social gaming options a couple of years ago, the company has seen a marked improvement in its performance, recording a 19% increase in revenue for its digital division across the first six months of its most recent fiscal year. At that time, it had cash and cash equivalents amounting to $622.1 million, but has also taken a hit because of the coronavirus pandemic.
The entry into social gaming has helped Aristocrat weather the COVID-19 storm, and Croker told Fantini that the company was “fortunate with the diversification of the last few years, with the digital business, which is showing some very strong performance.” He added, “Working to provide convergence solutions from the digital world for our land-based customers, is a priority for us at the moment” and explained that the past several years have been dedicated to “building scale in the digital world” that has allowed it to “become a global player in the RPG [role-playing game] strategy area; also in casual games and social casino.”