Pokie giant, Ainsworth Game Technology, is following rivals by increasing its poker presence in the United States.
The Australian pokie machine manufacturer is buying out US firm, Nova Technologies, in a deal worth $38 million (AUD53.5 million).
Once completed, Ainsworth’s pokies tally in North America will grow by nearly 1,500 to 2,600. Ainsworth has now been a presence in the US market for over 50 years.
Ainsworth had only just reported disappointing profits for 2015, and the move was described by executive chairman Len Ainsworth as, “an accretive acquisition and [a] highly complementary addition to our North American business.”
“The transaction allows us to enter Class II gaming in an immediate and significant manner,” added Danny Gladstone, Ainsworth’s chief executive.
Ainsworth Follows Rival Aristocrat Into US
Worried about falling further behind its big Aussie rival, Aristocrat, Ainsworth is now making the move across the Pacific.
Aristocrat Leisure has made similar investments in America in recent years. In 2014, the Aussie pokie manufacturer acquired Video Gaming Technologies in a deal worth $1.28 billion (AUD1.8 billion).
With the purchase, the Sydney pokie machines giant managed to triple its business in the States. In one fell swoop, Aristocrat increased its pokies presence in North America to well over 28,000.
In a similar situation to Ainsworth, Aristocrat had found itself performing much better in the US than at home.
In fact, Aristocrat profits rose nearly 5 percent in 2014 compared to a year before. That contrasted massively with a 19 percent slump in business back in Oz.
Ainsworth Suffers Revenue Drop
Ainsworth’s performance at home has been particularly flat this year.
In June investors got rid of shares in the pokie firm, the point where Ainsworth had to concede supremacy in the Aussie market to their great rivals, Aristocrat. Shares have dropped 28 percent in the last year for the company.
“It’s been a 12-month hangover. We got out of the box a bit late in terms of getting games approved and we’ve never really caught up,” Gladstone told Fairfax Media in June.
“There is no growth in Australia. You’ve got no chance of the whole thing changing, so the way we look at it is that five years ago we sold 500 machines in North America and this year we’ll probably do 3000 machines, so there is the growth story.”
There were significant delays in getting new branded pokies released. The company is now pinning hopes of an upturn on big-name games like The Sound of Music and Showgirls.
Ainsworth Heir Saved From Lawsuit
It’s been a turbulent few days for the pokie firm that was set up in the 1950s by Len Ainsworth. This week, Ainsworth’s son, Christian, found himself in the Supreme Court.
Ainsworth had been sued by former classmate Ben Le-Van who had claimed Ainsworth intimidated him at his Cairns backpacker hostel. Le-Van ran a pizza restaurant at the hostel.
Back in June, Le-Van told the court that Col Lewsey, the manager of the hostel, threatened him with broken legs if he didn’t give up his pizza shop.
Le-Van read an extraordinary voicemail Mr. Ainsworth was alleged to have sent him before the matter came to court.
“Hi, it’s Christian here. I’ve just read the letter from your solicitor. You’re f***ed. You’re f***ing f***ed. You’re f***ed,” it read.
The case continues.