After nearly 20 executive meets at Global Gaming Expo, in Las Vegas, Jefferies Equity Research analysts came away optimistic. “In short, we note considerable progress in product investment to compete in [online sports betting] and slot offerings, sweepstakes as a potential catalyst for igaming legalization and Brazil upside, while casino operators present wide ranging growth strategies,” wrote lead analyst David Katz in an October 14 investor note.
Recent litigation between Aristocrat Technologies and Light & Wonder was the talk of G2E and Katz wasn’t without an opinion. He wrote that both companies would remain at the forefront of the manufacturing sector, particularly with Everi Holdings, International Game Technology, and PlayAGS all in flux due to mergers.
Aristocrat management reported that their data “indicates North America has a larger number of slots on floors post-COVID and a higher percentage of recurring revenue games.” As for its NFL-themed slots, Aristocrat was said to be making “some fixes and personalization … after [an] inconsistent 2023 launch.”
Katz felt the recent lawsuit, which resulted in the withdrawal of Light & Wonder’s Dragon Train game, would be only modest in its 2024 impact. He also believed both companies would regain earnings momentum in 2025. “Despite the Dragon Train injunction, [management] remains confident that the company’s extensive portfolio of games will offset any expected losses, as other successful franchises, like Huff n Puff or Squid Games, continue to grow,” he wrote.
Furthermore, Light & Wonder Class III games are enjoying a “seamless” rollout on Class II machines, “which are considered the best among operators.” Other gamemakers Katz found noteworthy were Interblock and Blueberi Gaming, the former for its electronic table games following its absorption of Aruze and Zuum.
The Jefferies analyst discovered operators to be “subdued” on igaming prospects for the coming year, with state legislatures thought to be focused on more incremental tax solutions. Ditto the chances for online sports betting (OSB) expansion. Hope was discerned for Texas and California on that front, but visibility into the issue was deemed limited.
The one hope for jump-starting online casinos in the United States is sweepstakes games, which the industry views as a menace. Both operators and investors alike were said to be wondering if this could catalyze the attraction of igaming, much as daily fantasy sports did for OSB.
Given the U.S. stalemate on igaming, industry eyes looked to Brazil, where operators “generally expect significant competitive intensity at launch, given the high levels of interest,” as manifested in the form of 113 license applications. But Katz cautioned, “Operators also remain mindful of the scope for further alterations or delays to regulation, given Brazil’s track record and recent [anti-gambling] commentary from President Lula.”
Returning to the game-making sector, Katz said manufacturers were fixated upon “new product angles and product moats.” FanDuel’s new Your Way game was said to have piqued operator interest and “was described by Flutter’s CEO as a new paradigm in online sports betting and expected to be more impactful than same game parlays.” Your Way is currently undergoing test play in Colorado.
Also coming in for praise were business-to-business products from Kambi, and live-dealer igaming from BetMGM and Playtech. Inspired Entertainment’s new Hybrid Dealer was lauded for “providing [a] cost-efficient alternative to live dealer.”
