Analyst cautious over competitive strength of Aristocrat’s igaming business
Despite its growing focus on online gaming, Australian gaming giant Aristocrat remains competitively better positioned in its traditional gaming machine segment than in iGaming, according to investment research firm Morningstar.
In a note, Morningstar analyst Angus Hewitt said the market was currently “too optimistic about Aristocrat’s online real-money gaming venture.”
He added that although Aristocrat has been expanding its online casino presence through M&A activity such as last year’s acquisition of NeoGames, the online gaming space remains extremely competitive.
“While iGaming is growing quickly, with the US rapidly deregulating, it is hotly contested. Aristocrat is yet to replicate the same competitive strengths enjoyed in gaming machines,” Hewitt said.
“Aristocrat’s dominant position in leased electronic gaming machines underpins its narrow economic moat. Its North American installed base of over 71,000 machines is more than double no-moat Light & Wonder’s installed base of about 34,000 units.”
Speaking to COMPLETE iGAMING at ICE in January, Aristocrat Interactive Chief Executive Officer Moti Malul seemed aware that with expanding opportunities comes a risk of mission creep.
“In an organization as broad as we are in terms of our product set, our geographical customer, the biggest decision we need to take is what not to do,” he said. “We can do everything, but it’s about whether we should do everything. That’s the biggest thing, to make sure that we are constantly remembering our strategy in terms of our product focus, our customer, focus on our geographic spend and so on.”
Meanwhile, in an interview with COMPLETE iGAMING’s parent publication CDC Gaming at the same event, Aristocrat Gaming Chief Executive Craig Toner was clear the “accelerator is now that online team.”
“We’re working at getting the land-based content, that we know works, online to drive profitability there. Then we will be exploring how we continue to innovate and drive customer experiences,” he added.
In the Morningstar note, Hewitt highlighted the company’s current share price of around AU$65.00 (US$41)1 AUD = 0.6301 USD
2025-03-27Powered by CMG CurrenShift per share as expensive, maintaining a fair value estimate of AU$50.00. (US$32)1 AUD = 0.6301 USD
2025-03-27Powered by CMG CurrenShift
This, the research firm said, renders Aristocrat’s recent AU$750 million (US$473 million)1 AUD = 0.6301 USD
2025-03-27Powered by CMG CurrenShift share buyback scheme slightly value-dilutive although the impact is “more than offset by the time value of money.”
Morningstar has, Hewitt explained, therefore made only minor changes to its forecasts for the 2025 fiscal year, with underlying net profit still expected to reach AU$1.5 billion (US$945 million)1 AUD = 0.6301 USD
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