Sep 02, 2014 Newsdesk Industry Talk, Latest News, Top of the deck  
Australian slot machine maker Aristocrat Leisure Plc is selling its lotteries business to online gaming software supplier Playtech Ltd for a total consideration of EUR10.5 million (US$13.8 million) in cash.
The company on July 7 announced it would pay US$1.28 billion in cash for Tennessee-based Video Gaming Technologies Inc, a specialist in gaming machines for the tribal gaming market in North America. Four days earlier, Aristocrat Leisure had said it was acquiring all material assets of U.S.-based Paltronics Inc – a leading supplier of jackpot managers and display systems for casino games – under terms that were not disclosed.
The lottery division sale is so the company can concentrate on what it sees as higher growth markets, including casinos and digital gaming, said Aristocrat Leisure’s chief executive Jamie Odell.
The deal is still “subject to certain adjustments and conditions”, Aristocrat Leisure said. The company didn’t list them.
“With the recently announced acquisition of Video Gaming Technologies, Aristocrat is sharpening its focus on the business’ strategic strengths,” Mr Odell stated in a filing on Tuesday to the Australian Securities Exchange.
“In particular, we will continue to leverage our premium game content across priority, high value, segments and markets, including North American gaming operations, digital and core outright sale markets,” he added.
The sale will result in a non-cash write off of approximately AUD45 million in the current financial year (ended September 30, 2014), subject to adjustments, related to the carrying value of intangibles and foreign exchange losses, said the filing. Completion of the deal is expected in the current financial year.
Playtech, listed on the London Stock Exchange, provides software for gaming platforms including those offering sports betting, online poker, live casino games and bingo.
Products of Aristocrat Leisure’s lotteries division include video lottery terminals, transaction-processing systems, and game content produced in-house and from third parties.
Aristocrat Leisure is a long-time supplier to the lottery industry. In October 2002 it struck a deal with Sierra Design Group (SDG) to provide Aristocrat game themes for the New York market after SDG was selected to be a video lottery terminal provider to the New York Lottery.
In March 2012 Aristocrat Leisure announced it had supplied a linked jackpot system for Norway’s national bingo hall network.
But in its report for the half year ended March 31, released in May, Aristocrat Leisure said revenue from the lotteries business had fallen as the installed base of its terminals declined by nearly 12 percent year-on-year to 5,291 units. It said that was mainly driven by a reduction in the network of Italian lottery technology firm and lottery operator Cogetech SpA based in Milan.
Aristocrat Leisure’s shares closed up 1.3 percent at AUD5.47 by the end of Tuesday trading in Sydney.
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DS Kim
Head of Asia gaming and leisure research at JP Morgan Securities (Asia Pacific)