A new report from J.P. Morgan Securities Australia Ltd. pegs the two Australia-based slot suppliers, Aristocrat Leisure Ltd. and Ainsworth Game Technology Ltd., as “well positioned for growth” in the U.S. slot market.
The report was the result of a survey of the U.S. slot market by the firm that found 89 percent of the casinos surveyed intend to maintain or increase spend on slot replacement in 2016.
“Aristocrat looks set to be the key beneficiary, with 66 percent of participants saying the company is the top performing manufacturer,” analysts Jason Steed and Michael R. Aspinall wrote. “Ainsworth should also grow sales as its profile builds—purchasers are likely to devote 6.2 percent of a new floor to Ainsworth, up from 2015 (5.2 percent) and 2014 (4 percent).”
According to the report, 57 percent of casinos surveyed plan to increase the floor space devoted to Aristocrat products by more than 5 percent, and that the number of casinos reporting Aristocrat slots as their No. 1 performer had grown from 10 percent in 2013 to 66 percent this year.
The report said the replacement market will be key. “With the U.S. casino industry maturing, we expect fewer casino openings over the coming years,” the analysts wrote. “As a result, slot manufacturers will be increasingly reliant on the replacement market. In our latest survey, 66 percent of casinos report they will maintain spend on replacements (in 2016), 17 percent intend to increase spend and 6 percent will see a large increase in their replacement budget.”
Ainsworth recently announced that its executive chairman, Len Ainsworth, will sell his majority stake in the company to Austrian supplier Novomatic.
