Aristocrat outperforming social casino market, Jefferies analyst says
According to Jefferies Equity Research analyst Kai Erman, Aristocrat Leisure’s online Product Madness “has been outperforming a social casino market that remains challenged.” Erman’s views were shared in a 5 August investor note.
Light & Wonder’s SciPlay social-gaming divisions reported to be flat, in part because of a 20% drag from its Jackpot Party game. Erman added, “the rest of the market [is] in significant decline.”
Lightning Link was another revenue catalyst for Aristocrat, Erman said. It was helping to drive about 5% revenue growth in July.
During the second quarter, Aristocrat has had to contend with flat market share, according to the Jefferies report. “Market share has predominantly come from share losses from Playtika, as well as smaller players which continue to see headwinds from sweepstakes,” it read.
Light & Wonder was said to be hampered by unspecified “issues” involving Jackpot Party, but SciPlay was still outperforming the remainder of the social-gambling market. However, in spite of an overall 4% slump in social gaming, Eilers & Krejcik data “show that momentum continues for Product Madness despite the overall market.”
SciPlay was boosted by non-Jackpot Party titles, but still dipped 2% in the second quarter.
Propelled by Lightning Link Casino Slots, Aristocrat’s Product Madness gained 4.5% in revenue during early August. Over the same period, SciPlay was up 1%, a 20% plunge of Jackpot Party notwithstanding. “Other titles continue to more than offset the weakness, with strong growth from 88 Fortunes Slots Casino Games in particular,” Erman reported.
The analyst worried that new competition might come from sweepstakes games. But Aristocrat had cause for hope: “we do note that discussion on the legality of such products has increased in the US, which may slow ramp-up.”
Erman added that Aristocrat “has gained material share despite these market dynamics impacting other operators, we expect driven by Social Casino slot content that is preferred by customers more than any slots products offered via sweepstake.”
A more serious threat to social gaming might come from igaming, were it to be widely legalized in the US. However, Erman noted, “any conversion of Aristocrat social casino to igaming should be an earnings uplift for Aristocrat given stronger operating margins and unit economics in the category.”
Erman maintained a “Buy” rating on Aristocrat stock, which was trading at AU$69.13 (US$45)1 AUD = 0.6472 USD
2025-08-05Powered by CMG CurrenShift at the time of his report.
David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
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