Even with wallets feeling the pinch, people aren’t abandoning having fun (read: small joys). If anything, they’re just changing how they spend. To put it simply, people would rather not buy a new gadget than miss a night of entertainment.

In North America, gambling hit an all-time high in 2025, with 57% of adults getting in on the action. According to the Bureau of Economic Analysis, while folks stopped spending at the end of 2025, they dropped an extra $20.9bn on recreation services in December alone.

Looking at the data, it seems like a good time to be a part of the gaming industry. In the US, traditional land-based casinos grew steadily by 2.3% to $50.9bn, while iGaming (online) surged 27.6% to $10.7bn. Over Europe, gaming became a priority in the "entertainment calculus." In 2025, spending grew 16.7% y/y, according to Visa.

Australian-based gaming giant Aristocrat Leisure is playing the long game. Today, their ambitions span from physical cabinets on US casino floors to the iCasino apps on your phone. They’re calling this their "Interactive" push, and the goal is to turn it into a USD 1bn business by 2029.

Their big move this year was cleaning house—they sold off Plarium (the Raid: Shadow Legends studio) and are prepping to offload Big Fish Games too. The new game plan is all about "going vertical." As expected, it is evident in the books.

Levelling up

Even with a major shuffle in the portfolio as mentioned above, the numbers tell a story. Aristocrat Leisure’s revenue rose 11% y/y to nearly AUD 6.3bn, while their reported NPATA reached AUD 1.3bn.

The heavy lifting came from the core segments, especially the land-based Gaming side (think tall, flashing slot machine cabinets) which climbed over 9% to hit AUD 4bn up from AUD 3.6bn the previous year, thanks to a major boost from new cabinet launches like the Baron.

The real firecracker was Aristocrat Interactive, with its revenue climbing nearly 54% y/y to AUD 344.3m. The company is also reinvesting AUD 800m (about 12.7% of their total FY 25 revenue) into Design & Development to keep the ideas flowing.

Even with all that tech growth, they still have some serious pull in traditional casinos. In North America, they managed to keep their Average Selling Price—the average revenue the company receives for each individual physical slot machine —steady at over USD 21,000 per machine, which is basically the same as last year. This operational resilience on the casino floor, however, hasn't been enough to shield the company from broader market skepticism.

Jackpot potential?

The share price is currently around AUD 46, a painful 31.8% drop from last year—especially relative to its 52-week high of AUD 73.3. Even with a massive AUD 28.2bn (USD 19.4bn) market cap, the market has clearly been cooling off.

However, the metrics make it seem like a bargain. The stock is trading at a 2026 P/E of 18.1x, which is way cheaper than its 3-year average of 24.7x. Assuming they’ve got their maths right, analysts are screaming "buy"— all 15 of them have a buy ratings on the share, with a target price of AUD 66.4 (USD 46.1), suggesting a huge 42.3% upside potential at current levels.

Risky business

First comes the regulatory headache. Any crackdown on poker machines or online betting—especially in the US or Australia—could seriously dent their profits. Then there’s the economy. When folks feel the pinch, they spend less on gaming, which hurts Aristocrat Leisure’s bottom line.

Since they’re a global player, currency swings are a painful spot too. If the Australian dollar gets too strong, those overseas earnings look a bit thinner. Also, the digital space is cutthroat. They’re competing with every app on a user’s phone for attention, so they have to keep spending big on new games just to stay relevant. Finally, cybersecurity is huge; a data breach could be a ‘game over’ for their reputation.