Aristocrat to Launch iGaming Solution before Year’s End
Posted on: May 19, 2022, 05:24h.
Last updated on: April 20, 2023, 09:16h.
Aristocrat Leisure has reiterated its plan to jump into the digital gaming space. The gaming equipment manufacturer said in a filing with the Australian Securities Exchange today that it is ready to tackle the growing market.
Aristocrat will launch an online casino business before the end of the year. The company, much like in the land-based gaming segment, wants to be a pioneer in the digital gambling space.
Aristocrat also announced an AU$500-million (US$349 million) buyback of on-market shares. This is in addition to some $1.3 billion (US$907.53 million) that it raised last fiscal year to pay for its failed Playtech bid.
Aristocrat Embraces the Future
Aristocrat missed out on the acquisition of the online gaming platform because of the last-minute arrival of new shareholders at Playtech. However, it is now creating its own real-money gaming (RMG) solution for the online market. This will provide online gambling software to casinos and other customers.
Trevor Croker, CEO of the company, stated in the filing that it will launch the new product by the end of 2022. He confirmed that two US customers would have it live in their states. A third would follow in 2023.
Aristocrat has already begun to market its new slot games, both physical machines as well as mobile games. Customers can play the games, but they cannot gamble. RMG will soon be a third channel, as iGaming in the US continues to gain traction. Six states in the country currently have legalized online casinos.
[There are] people that play across all different verticals, whether it’s retail, whether it’s social, and whether it’s real money. What we’ve seen today in the markets that have established those three verticals already is that there is incremental opportunity,” stated Aristocrat Leisure CEO Trevor Croker.
Croker added that Aristocrat initially focused on providing an online platform to its B2B customers. Next, however, he opened the door to launching its online gambling products directly to consumers.
Aristocrat Financial Health Recovering
Aristocrat also provided a half-year financial update. Its net profit (after amortization and tax) was $580 million (US$404.9 million). This is a strong, 41% improvement over the same period last year, when COVID-19 shut down many casinos.
It’s also 12 percentage points ahead of the market consensus, giving Aristocrat additional strength. Net profit after tax increased 46% to $530 million (US$369.83 million).
Part of the improvement came via the company’s North American slot machine business. It added 23%, resulting in revenue of $2.74 billion (US$1.91 billion).
Analysts expected Aristocrat’s Pixel United to report lower figures for the period. However, the mobile game division previously known as Aristocrat Digital until last October surprised them. Its profit rose 3.2%, to US$311 million.
This was the result of “disciplined and effective UA (user acquisition) allocation across the portfolio, increased contribution from the proprietary platform Plarium Play,” the company claimed. UA investments accounted for 28% of Pixel United’s revenue in the period.
In addition, it came from the recognition and management of additional costs that were necessary to protect the company’s business, as well as its workforce, in the context of the conflict in Ukraine.
The financial update pleased investors. Aristocrat was trading at $31.20 (US$21.74) on Tuesday, but jumped to $33.73 (US$23.28) in the morning after the company shared its results. Investors will also be happy with the interim $0.26 (US$0.18) per-share dividend they will receive after July 1.
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