Pokie giant Aristocrat to launch online casino product this year
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Pokie giant to launch online casino product as it readies for digital gambling boom
Poker machine giant Aristocrat Leisure says it will launch its online casino business by the end of this year, as the ASX-listed group aims to become a leader in the emerging digital gambling industry.
Aristocrat also announced a $500 million on-market share buyback on Thursday, returning some of the $1.3 billion it raised last year to fund its failed bid for the online casino outfit Playtech.
With that $4 billion deal killed off by a group of rebel Playtech shareholders, Aristocrat is now developing its own “real money gaming” (RMG) business that will make online gambling software for casinos and other customers.
The $22 billion group’s chief executive, Trevor Croker, said on Thursday that it would launch its product by the end of 2022, confirming it would go live with two US customers in two states, with a third to launch early in 2023.
“It’s going to allow our customers to provide our slots to their customers through an online application where they’ll be able to play our world-leading games on their websites,” Croker said.
Aristocrat already markets its slot games in both physical poker machines and as smartphone games, which customers can play but not gamble money on. RMG will become a third channel as so-called iGaming is gradually legalised across the US, where it is so far permitted in six states.
Croker said Aristocrat’s initial focus was to provide an online platform to its existing poker machine customers but he left the door open to launching its own direct-to-customer online gambling products too.
“There’s people that play across all different verticals, whether it’s retail, whether it’s social and whether it’s real money,” he said. “What we’ve seen today in the markets that have established those three verticals already is that there is incremental opportunity.”
Croker said that Aristocrat would “obviously participate” if Australia allowed casino gambling but said legalisation was “a government conversation”.
Aristocrat on Thursday reported a half-year net profit after tax and amortisation - its most closely watched figure - of $580 million for the six months to March 31. That was a jump of 41 per cent from the same half a year earlier, when COVID-19 closed many casinos and 12 per cent ahead of market consensus forecasts. Net profit after tax grew 46 per cent to $530 million.
Goldman Sachs analyst Desmond Tsao said there was “better-than-expected performances across the board”, particularly in the North American slot machine business, which drove a 23 per cent jump in revenue to $2.74 billion.
There had been market jitters about the performance of its mobile video game division after industry data suggested downloads of its most popular game, Raid: Shadow Legends, slowed dramatically in March.
But Tsao said Thursday’s disclosures confirmed players were actually shifting to its PC-based platform, which was not picked up in the download data.
Aristocrat’s shares jumped on the strong result and buyback announcement, and at 1.30pm were trading 5.7 per cent higher at $33.41. The company will pay a 26¢ interim dividend on July 1.
