Australian gaming venue survey shows eagerness to spend on poker machines
A survey of Australian gaming venues has found that as many as 90 per cent of respondents said they intended to maintain or increase their poker machine replacement spend in the next year.
Asia Gaming Brief reports that analysts from JP Morgan Australia, including equity analyst Don Carducci, said the Aristocrat Leisure’s machines remain venues’ top pick for floor space.
Carducci remarked that this year’s survey results signify much-improved business confidence from the 2020 Slot Survey, which saw only 55 per cent of venues expecting to maintain or increase their replacement spend.
“Furthermore, the proportion of casinos and pubs who will greatly increase the replacement spend has doubled from eight per cent in 2020 to 16 per cent this year,” added Carducci.
The positive sentiment is mostly due to many poker machine dominant markets coming out of lockdown over the course of 2021, higher vaccination rates and more countries shedding their zero-COVID strategy to a “Living with COVID” policy.
Las Vegas, one of the first major gaming markets to reopen, has been on a six-month hot streak, with $1 billion-plus in gaming revenue, bringing them very close to pre-pandemic levels.
New South Wales has also seen revenues surge during months it is not under lockdown.
That states venues reopened on October 11 after 104 days of consecutive closure.
“This is consistent with the trend that despite players visiting less frequently, spending is much larger due to the pent-up demand from COVID.
“Larger operators also observed an increase in spend per customer,” Carducci said.
Fifty six per cent of casinos and pubs surveyed estimate that customer spending has increased, compared to only 55 per cent in 2020 and 32 per cent in 2019.
Carducci also noted that there would be increased spend on conversions and maintained or increased pricing of machines compared to the prior year.
Aristocrat still the machine of choice
Perhaps at no surprise, the survey reveals that Australian-based Aristocrat Leisure remains the top-performing poker machine manufacturer, with 83 per cent of respondents rating it the best performer, though it has slipped just slightly compared to the prior two years.
Some of these votes instead went to Scientific Games, with eight per cent of casinos and clubs ranking it as best performer, followed by IGT at three per cent, then Konami and Ainsworth.
When asked how operators would allocate their floor according to the manufacturer if they started afresh, Aristocrat took home around 53 per cent of green-field floor space, down slightly from 56 per cent in 2020.
Scientific Games was the second favourite with 15 per cent of the floor, while IGT, Konami and Ainsworth would receive 13, 9 and 8 per cent respectively.
Still, Aristocrat remains the standout manufacturer in 2021, with 49.6 per cent of machines on gaming floors expected to be Aristocrat’s in 2021, and around 91 per cent of casinos and pubs intended to maintain or increase their allocation to Aristocrat in the next year.
It should also be noted that while demand for Aristocrat’s products have been strong in Australia and New Zealand, Carducci in an earlier note in July said that issues affecting global supply chains may impact sales in the second half of the 2021 financial year.
The analysts noted that hardware such as monitors, silicon clips, light tubes and related button-decks and paneling have been the hardest hit.
Carducci also noted a common theme in the survey was that of a more “partnered approach” between operators and manufacturers in 2021.
“In conjunction with an increased focus on costs, is likely to mean a greater focus on concentrated spend with individual manufacturers,” he said.