Citing an April improvement in gross gaming revenue, Jefferies Equity Research analyst Kai Erman said he gained confidence in Aristocrat Leisure. Erman pointed to market-share gains driven by new products and an increasingly premium-level installed slot base.
The analyst pointed to an average of 3.5 percent growth in United States gambling proceeds. This represented a gain from a flat March and a negative February. For the year to date, U.S. gambling revenues are up one percent over 2024.
“Our observations of historical GGR in periods of economic downturn, as well as general consumer and slot behavior, give us confidence that slot demand should remain resilient relative to other forms of consumer spending and gambling,” Erman wrote. He expected any macroeconomic impact to work to Aristocrat’s benefit, given its 40 percent share of the gaming-operations business.
This portended positively, Erman continued, for Aristocrat’s fee-per-day revenues. Although Aristocrat would retain a base of deeply discounted Class II machines, fee growth was expected to be propelled by continued growth in the U.S. casino revenues.
Other propellants included an ever-higher mix of premium units in Aristocrat’s installed base: Nearly all of the 2,500 Aristocrat machines shipped out in early 2025 were of a premium nature. Also, the end of steep markdowns on Class II units, a hangover from 2024, was expected to give fees a further lift.
Erman opined that Aristocrat was clear in its intention to engage in further mergers and acquisitions and could commit as much as AU$4 billion to the task. He added, “Whilst views on where M&A may be focused are mixed, given [Aristocrat’s] demonstrated track record of both bolt-on and transformative M&A (VGT, Product Madness, Plarium, and more recently NeoGames), we are comfortable with the incremental earnings upside.”
As for Aristocrat’s interactive revenues, Erman said he was highly confident the company’s $1 billion target could be met, “given upside from scaling market share and ongoing system growth, particularly in the U.S.” Although these were slower-growing markets, he added, Aristocrat looked to be a gainer of share.
