‘Consolidation’ seems to be the name of the game in today’s poker machine market. In recent years, we have seen plenty of different poker machine manufacturers join forces in order to grow, expand and corner a larger portion of the international gaming market share. Aristocrat is now getting involved, as the company is currently in talks to possibly purchase Video Gaming Technologies (VGT).
VGT is well-known in the American gambling market, as the company provides pokies to Native American casinos across the country. While VGT has seen significant success in the past, the gaming market seems to be advancing quickly and the operator is struggling to keep up. As such, VGT has been on and off the market several times over the course of the past few years.
However, its negotiations with Aristocrat remain quite fragile, and sources involved in the talks claim that they ‘could fall apart at any moment’. Purchasing VGT would greatly benefit Aristocrat, as the company would gain a greater presence in the American gambling market.
Native American casinos across the country continue to thrive, and getting involved in the local industry would be a big step forward to Aristocrat’s global expansion plans. Another benefit is that Aristocrat would be well-positioned to enter the American online gambling market. More states are regulating online poker and other casino games, licensing local operators to offer their services in the digital market.
If Aristocrat were to acquire VGT, the company would have an in into the American online gambling industry. Financial analysts are somewhat concerned about the deal, however. Aristocrat’s market cap is $2.82 billion, and the purchase of VGT would cost upwards of $1 billion.
It is a risky move, and it will be interesting to see how this deal pans out.
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