Aristocrat builds own online casino, evacuates mobile gaming developers from Ukraine

Aristocrat is evacuating staff from Ukraine and says it is also making progress in building its own online casino platform.

Aristocrat Leisure CEO Trevor Croker says the company invests about $500m a year in research and development and then uses acquisitions to build scale further.

Aristocrat Leisure says it is making progress building its own online casino platform following its failed $3.9bn bid for British gambling software group Playtech.

On Thursday, Aristocrat also said it was evacuating staff from Ukraine because of the Russian invasion – becoming the first Australian company to confirm it was moving employees.

Aristocrat employs some 1000 people in Ukraine in its Pixel United business which includes three mobile-first games publishers: Product Madness, Plarium and Big Fish games.

The company is now expanding into real money gaming to take advantage of the booming online casino market – the total revenue of which is expected to surge 13 per cent to $US112bn ($155.8bn) by 2025 – and for the past 12 months has been building its own platform.

Aristocrat chief executive Trevor Croker said its RMG strategy was a “medium-term effort” and would sit alongside the Pixel United business, led by Mitchell Bowen. “Aristocrat’s a company that grows by taking share in the markets we participate in and we invest heavily, over $500m every year … to make games to grow the business. So we‘ve been steadily continuing to drive growth every year and then we use M&A to accelerate the growth,” Mr Croker said following the group’s annual meeting on Thursday.

“You can see the acceleration that has come through acquisitions, and then leveraging scaling those acquisitions, and hence while Playtech did not happen, our commitment to R&D is still the same,” he said.

“We build a strong team and enter that market and the good thing about that team is it’s full of good internal capability and will attract more talent by doing this.” Mr Croker said integrating Playtech would also have been a “medium-term” goal but he said it would have allowed the company to build scale in its RMG platform more quickly.

‘Playtech would have given us scale straight away. But we have got the content and what we know is our content resonates in the land world and will resonate well in the RMG world.

“We’ve invested in all the technology. We’ve got strong customer relationships, which our customers have been talking about, and we have got good regulatory relationships so we can provide them a solution that is consistent with the high-integrity approach that we take to the gaming world.”

Despite securing the support of Playtech’s board, investors led by former Playtech boss Tom Hall amassed a 28 per cent stake that it used to kill the deal.

Aristocrat did not give any detailed full year earnings guidance at its annual meeting but Mr Croker said he expected “continued growth over the full year … assuming no material change in economic and industry conditions”.

He said the company was “closely watching inflation data in the US” as all eyes turn to the Federal Reserve about when it will pull the trigger on interest rate rises. “We‘re obviously mindful at the moment of the inflation in North America and some of the potential risks of that,” he said.

“So we’re monitoring consumer sentiment, and listening to what our customers have to say about what they’re seeing coming through from a floor and occupancy point of view.”