Aristocrat Steps Up

In reaction to a year of mega-mergers and partnership deals marking a consolidation trend in the slot supply sector, Australian slot machine giant Aristocrat Leisure, Ltd. is stepping up its competitive position.

Faced with competition including new behemoths Scientific Games, which has incorporated WMS, the recent big buy of IGT by GTECH (see page 56), and Bally Technologies, which has absorbed SHFL entertainment—and tuck-in acquisitions by several competitors seeking to create diverse product libraries and multi-channel capabilities—Aristocrat is aggressively making deals to diversify and improve its product lineup.

First, the company is making major moves to improve its Oasis 360 casino management system, which has been named the most widely used CMS in consecutive Goldman Sachs surveys. Two weeks ago, the company announced its plan to acquire Paltronics, Inc., which has been a partner to the slot-maker in deploying its linked progressive controllers to run Aristocrat’s successful wide-area networks such as Hyperlink.

Paltronics also adds venue-wide progressive bonusing capabilities to Oasis, putting it on par with the networked bonuses being offered by industry systems leader Bally and others. Paltronics also brings picture-in-picture capabilities to Oasis, giving Aristocrat the ability to work with customers on enterprise-wide promotional bonuses.

Last month, Oasis 360 got another boost with Aristocrat’s announcement of an exclusive licensing and development agreement with renowned casino loyalty solution developer House Advantage. Under the deal, Aristocrat will be the exclusive licensee and sales distributor for House Advantage’s gaming product suite in the North American market.

The company will embed House Advantage software—mainly, the highly regarded HALo suite of software products—into Oasis, and Aristocrat and House Advantage will work jointly to develop new casino promotional software and loyalty solutions.

“Leading casinos across North America are successfully using House Advantage’s elite software, which provides casinos of all sizes with a scalable, competitive, unique, innovative solution for building patron loyalty,” said Aristocrat Chief Product Officer Rich Schneider.

Aristocrat’s aggressive self-improvement campaign culminated with perhaps its most bold action yet designed to achieve CEO and Managing Director Jamie Odell’s long-stated goal of increasing recurring revenue from leased games. Aristocrat announced that it has agreed to acquire Tennessee-based Class II supplier Video Gaming Technologies for $1.28 billion in an all-cash deal the slot-maker says will give it operational revenue to fuel further expansion around the world.

Privately owned VGT is one of the leading suppliers of games for Class II Indian casinos in North America, dealing exclusively in leased machines and systems for a solid base of recurring revenue. The supplier currently has an installed base of approximately 20,200 leased machines and 610 employees.

VGT has the most widely used Class II platform in North America, consisting of both mechanical and video Class II gaming machines. The majority of VGT’s installed base is in the Oklahoma tribal gaming market, which accounts for approximately 50 percent of the total installed base of Class II gaming machines in the U.S. The supplier also has expanded into the Washington and California markets.