‘Tough month’ for social casinos, Jefferies analyst says

David McKee

7 July 2025 at 2:07pm UTC-4

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Aristocrat Leisure saw its social-casino growth go backwards in June, according to Jefferies Equity Research analyst Kai Erman, who detailed his findings in a 7 July investor report.

Social casinos, Erman wrote, “showed a tough month … across the industry.” Although Aristocrat outperformed the market, it suffered its first reverse since September 2024.

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While the broader market plunged 23%, Aristocrat only declined 2.5%. Light & Wonder’s social-casino operations were down 9%, as Jackpot Party revenue plummeted 30% year over year.

The Aristocrat declivity, Erman found, was partly driven by the underperformance of Heart of Vegas and Big Fish Casino. These were down 2% and 18%, respectively.

Lightning Link was, by contrast, up 5%, while Mighty Fu vaulted 62%, which Erman said “provided some offset.” He added, “We do note SensorTower data does not capture [direct-to-customer] revenues, which we do note for Aristocrat Leisure have shown rapid momentum in recent months and may suggest upside to this data.”

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Still, Erman said, the social-casino market was still significantly challenged. While some social-casino operators had been dropping by double digits over the past year, Erman opined that the June numbers were a noteworthy step further down. Even “material outperformed” SciPlay, a division of Light & Wonder, was said to be experiencing major headwinds in the market.

Offsetting the Jackpot Party debility for Light & Wonder were such games as Quick Hit Slots (up 11%) and 88 Fortunes Slots, which leapt 73%. And while SciPlay’s social-casino revenue had been down 2% in the first quarter of 2025, it was flat in the second quarter.

“Competitive headwinds continue to see challenges for the social casino market,” Erman cautioned, adding that Aristocrat was buffeting them better than the rest of the sector. “Ongoing launches of sweepstakes products may provide competitive pressures; however, we do note that discussion on the legality of such products has increased in the US, which may slow ramp-up,” the Jefferies analyst continued.

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Erman observed that Aristocrat had continued to amass market share despite market dynamics that were impeding other operators in the space. He opined that Aristocrat success was “driven by social casino slot content that is preferred by customers more than any slots products offered via sweepstake.”

A more severe threat, however, might be posed by growing acceptance of igaming in the United States. Even so, Erman opined, social-casino revenue could be converted to igaming win, which would be “ an earnings uplift for Aristocrat given stronger operating margins and unit economics in the category.”