Cashless Casinos Gain Analyst Approval With J.P. Morgan’s Aristocrat Note

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In gambling industry circles, cashless casinos are “of course” propositions. Yes, they’ll happen. Naturally, gamblers want them. Of course, the technology will work. Yet, Wall Street remained largely silent on the topic until now.

That changed on Oct. 24, when Sydney-based J.P. Morgan analysts released an analyst note lauding Australia’s Aristocrat Leisure for its cashless casinos trial. Analyst notes provide insight into stocks and J.P. Morgan’s ratings on them.

J.P. Morgan analysts Don Carducci, Michael James, and Emily Macpherson wrote:

As evidence of the commitment to Responsible Gaming development, Aristocrat is currently trialing a new Digital Gaming Wallet in [New South Wales], Australia. This trial is being run in conjunction with gov’t/regulators in the state in order to learn and better inform how to best protect against gambling harm.

The Digital Wallet will allow users to utilize and pay for gaming (as well as venue-related services) through the wallet instead of using cash. There will be a host of Responsible Gaming tools available on the app in order to better inform players of their behavior. Users will be able to set limits across things such as session time, frequency of play, spend, and bet size. In addition, users can self-exclude via the app but also enable staff intervention (via monitoring). One feature worth highlighting is the restriction on transferring to the wallet whilst on the gaming floor. Patrons will be required to leave the gaming floor before top-up.

The analyst note, subtitled It Is Not All Bad News: Responsible Gaming, talks about the three-month digital wallet trial the Australian gambling product and services provider is conducting at Wests in Newcastle.

Aristocrat, primarily known as a slots machine manufacturer, is planning to enter the US online casino market this year under its Anaxi division.

Regarding Aristocrat’s cashless casinos ambitions, ClubTIC also reported on Oct. 25:

The Government has given the go-ahead to three other gaming manufacturers –  IGT, Utopia Gaming, and Light n Wonder (former Scientific Games) – to conduct similar trials.

Aristocrat stock (ARLUF) rose nearly 9% since J.P. Morgan released the analyst note.

Acres, Everi, Others Offer Cashless Casinos Options

Cashless casinos seemed inevitable during the height of the Covid-19 pandemic. In June 2020, the New York Daily News reported that the Nevada Gaming Commission “recently gave the green light to rule changes clearing the way for broader use of cashless wagering.”

Mark Palmer, managing director and head of digital assets research at BTIG, tweeted in March 2020 that Everi Holdings‘ stock was a “buy,” primarily because of its “digital wallet pilot programs.”

In November 2021, Everi announced it integrated its cashless payments technology, CashClub Wallet, with Shift4‘s payment solution.

Everi said in November 2021:

Currently live at 15 casinos that host more than 32,000 electronic gaming devices, Everi’s CashClub Wallet solution is the most widely deployed land-based digital gaming wallet in the U.S., and the market’s only fully-integrated, multi-property, multi-jurisdictional, and system-agnostic solution.

Another company, Acres Manufacturing, even has a technology called Cashless Casino. The company that may go public soon is making integrating cashless payments with more than 26,000 physical slot machines through its Foundation tech its value proposition.

Cashless casinos are on the minds of payment processors, too.

J.P. Morgan Analysts Emphasize Aristocrat’s RG

The J.P. Morgan analysts looking into Aristocrat’s tech to create cashless casinos concentrated on its responsible gambling aspects.

The Oct. 24 report’s primary title is Gaming and ESG. So it examined the environmental impact, social justice, and good governance practices of Aristocrat (ALL in this report) and four other gambling companies:

  • PointsBet
  • Star Entertainment Group Limited
  • Tabcorp Holdings
  • The Lottery Corporation (TLC)

The report emphasizes that J.P. Morgan does business with all of these companies.

Carducci, James, and Macpherson write:

Responsible Gaming (RG) is the key focus when running an integrated ESG approach for stock selection across gaming companies. In this report, we review and identify key aspects of RG policies across our coverage universe, including programs and initiatives in place to empower conscientious play. This compare and contrast approach reveals favorable outcomes for TLC and ALL as our top picks.

Aristocrat makes an effort to do more than it’s required to do, the analysts say. For instance, it integrates RG with its free-to-play games, even though social casinos don’t have to have it.

The J.P. Morgan analysts write:

As a developer and supplier of games (both physical and digital) Aristocrat’s responsible gambling / gameplay policies, responsibilities and areas of focus differ slightly to the traditional casino or wagering operators.

In addition to responsible gambling player education, employee training and consumer disclosures, Aristocrat highlights ethical product design as having very high importance to stakeholders and high strategic impact on Aristocrat.

In other words, the analysts approve of Aristocrat’s efforts to do what’s right while creating cashless casinos.

 

About the Author

Heather Fletcher

Heather Fletcher is the lead writer at Bonus, concentrating on online casino coverage. She had her first published byline at age 10, but didn't get paid for her writing until she got her first newspaper job. Fletcher's newspaper career started at Suburban News Publications in Ohio and eventually took her to The New York Times, where she's still a contract freelance reporter for the National Desk. She covers breaking news from Philadelphia, as needed. In March 2021, Fletcher began writing about online casino gambling as the lead writer for Online Poker Report.

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