Aristocrat eyes entry to sports betting field: CEO

Oct 15, 2020 Newsdesk Latest News, Top of the deck, World  

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The chief executive of Australia-listed slot machine and digital games supplier Aristocrat Leisure Ltd says his firm is interested in entering the sports betting market.

“We have the balance sheet, and we also have the intent – as you can see from our previous acquisitions – to either build or buy” to enter that market, said Trevor Croker (pictured).

He was speaking in an online interview with Frank Fantini of Fantini Research, a gaming industry news provider and consultancy.

Mr Croker stated: “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” the sports betting field, he added.

Aristocrat has a large equipment supply business in a number of bricks and mortar casino markets, including Australia, North America, Macau and other parts of Asia.

In North America, sports betting has, according to investment analysts, been a growing consumer sector, coinciding with regulatory liberalisation and the Covid-19 pandemic.

In recent years Aristocrat has moved into so-called “social casino” games and other online products. Aristocrat’s first-half results for the six months to March 31 saw a 19-percent increase in revenue in its digital division.

The group held cash and cash equivalents amounting to AUD871.7 million (US$622.1 million) as of March 31, according to previous filings. The group had net debt of AUD2.25 billion at that date.

Nonetheless, the firm announced on April 27 it was suspending its interim dividend for fiscal-year 2020 and laying off a number of employees to mitigate the impact of the coronavirus crisis on its business.

Move to digital

Mr Croker said, in his comments to Fantini Research, that Aristocrat had been “fortunate with the diversification of the last few years, with the digital business, which is showing some very strong performance” during a time when many land-based casinos have seen their business facing either temporary shutdown or reduced revenue due to the pandemic.

The CEO stated however that the land-based casino sector had shown “strategic resilience”, with regional properties in North America “doing pre-pandemic levels of performance”.

Mr Croker said the global crisis – with the refreshed focus on workplace and consumer health and safety – had accelerated the trend whereby products from the digital gaming world might be applied in land-based casinos.

“Working to provide convergence solutions from the digital world for our land-based customers, is a priority for us at the moment,” he stated.

The executive added the firm has spent the past few years working on “building scale in the digital world” and had now “become a global player in the RPG [role-playing game] strategy area; also in casual games and social casino”.

JP Morgan Securities Australia Ltd said in a September note that is was a “matter of when and how, not if” Aristocrat would enter the cash-stakes iGaming market in the United States.

Online gaming does provide specific regulatory and legal challenges for operators that go beyond state-based licensing.

In May it was announced that Aristocrat was to pay US$31 million, as part of a US$155-million class-action settlement centring on two lawsuits in the U.S. state of Washington concerning Internet-delivered games. The lawsuits related to the Big Fish Games brand, acquired by Aristocrat for US$990 million in January 2018.

It had been alleged the Big Fish brand offered certain products that were actually games of chance, of a type prohibited under Washington state law.

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