Mar 10, 2016 Newsdesk Industry Talk, Latest News, World  
Australian casino suppliers Aristocrat Leisure Ltd and Ainsworth Game Technology Ltd are “well positioned for growth” in the United States this year, says a report from J.P. Morgan Securities Australia Ltd.
The Tuesday report, following an annual U.S. slot market survey by J.P. Morgan, stated that 89 percent of the casinos surveyed intended to maintain or increase spend on replacement of older slot machines and related gaming products in 2016.
“Aristocrat looks set to be the key beneficiary, with 66 percent of participants saying the company is the top performing manufacturer,” analysts Jason Steed and Michael R. Aspinall wrote.
They added: “Ainsworth should also grow sales as its profile builds – purchasers are likely to devote 6.2 percent of a new floor to Ainsworth, up from 2015 (5.2 percent) and 2014 (4 percent).”
Ainsworth announced last month that its founder and executive chairman, Len Ainsworth, had agreed to sell his 53-percent stake in the company to Novomatic AG for a total cash consideration of about AUD473.3 million (US$337.3 million).
J.P. Morgan’s survey revealed that 57 percent of casinos surveyed intended to increase their floor allocation to Aristocrat products by more than 5 percent.
The results showed that the number of casinos reporting Aristocrat as the number one performing manufacturer had grown from 10 percent in 2013 to 66 percent in 2016.
Mr Steed and Mr Aspinall stated that, “with the U.S. casino industry maturing, we expect fewer casino openings over the coming years.”
They added: “As a result, slot manufacturers will be increasingly reliant on the replacement market. In our latest survey, 66 percent of casinos report they will maintain spend on replacements [in 2016], 17 percent intend to increase spend and 6 percent will see a large increase in their replacement budget.”
Spend on game conversions is also expected to increase, according to the J.P. Morgan survey. “The number of participation units in U.S. casinos will be flat to slightly down in 2016,” Mr Steed and Mr Aspinall added, based on the survey results.
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