Aristocrat Gains Momentum on Slot Growth and M&A Outlook

A better-than-expected performance in April has renewed optimism in gaming manufacturer Aristocrat Leisure, according to Jefferies Equity Research analyst Kai Erman.

After two sluggish months, gross gaming revenue (GGR) in the U.S. bounced back last month, giving Erman reason to believe Aristocrat’s momentum is just getting started.

Slot Machine Proceeds and Gambling Revenue, Up

Slot machine proceeds in April grew by 3.5%, a marked improvement from flat results in March and a dip in February. So far in 2025, overall gambling revenue is up 1% compared to last year.

At the start of the month, Aristocrat unveiled its latest slot machine cabinet with the addition of The Baron Portrait, which was already available in casinos across North America.

“Our observations of historical GGR in periods of economic downturn, as well as general consumer and slot behavior, give us confidence that slot demand should remain resilient relative to other forms of consumer spending and gambling,” Erman wrote.

The analyst, who recently suggested the demand for slot machines will remain strong despite gambling revenue fluctuations in different areas, credited Aristocrat’s strong market position to a growing lineup of new, high-end machines and an increasingly premium mix across its installed base. 

In early 2025, Aristocrat shipped about 2,500 new units, and nearly all of them were premium models. At the same time, the company is moving past the deep discounts it previously offered on Class II machines, a trend Erman believes will further strengthen daily fee performance.

The company currently holds a dominant 40% share of the gaming operations segment, which Erman sees as a buffer in the event of wider economic pressure. That strength is expected to boost Aristocrat’s daily fee income, particularly as U.S. casino operators show signs of continued recovery.

Aristocrat, Likely to Remain Aggressive on M&A 

Looking ahead, Erman expects Aristocrat to stay aggressive on the merger and acquisition front. 

“Whilst views on where M&A may be focused are mixed, given [Aristocrat’s] demonstrated track record of both bolt-on and transformative M&A (VGT, Product Madness, Plarium, and more recently NeoGames), we are comfortable with the incremental earnings upside,” he wrote.

As for its online and interactive division, Erman remains bullish. He believes the company’s $1 billion revenue goal in that space is within reach, driven by growing market share and system expansion, especially in the U.S., where Aristocrat continues to gain ground despite slower growth overall.