There have been casino closures around the world and some casinos may not be able to weather the storm. Meaning, they might have to be forced to declare bankruptcy.
And, land-based casinos are not the only business facing hiccups. Now, the gaming providers are also feeling the pinch of being shut down.
However, some entities like Aristocrat Leisure are now relying on their online pokies client to keep the company running.
But, that does not mean that they do not have to make certain adjustments. For example, the gaming providers have also started to lay off workers for survival.
Measures Implemented by Aristocrat amidst Casino Closure
For starters, by suspending its interim dividend, Aristocrat has managed to cut down the company’s expenditure by 70%. This is actually an impressive move by the gaming providers.
Additionally, it has also put almost 1000 workers under suspension while 200 workers have been completely laid off. There has been a 30% reduction of base salary for some positions after the casino closures.
With a 1 billion dollar liquidity value with no debts to pay, the company‘s balance sheet seems to be in order. This is a comparison to a lot of companies who seem to struggle to get through this whole process.
Apparently, the company currently has over $300 million in free cash flow. Hence, according to analysts, the company can still survive a further 6 months of lockdown.
Are the Measures Working?
From the looks of things, whatever the company is doing is actually working. Meaning, they may actually be able to push through the casino closures and be left unharmed.
Now that the gaming company is spending only $30 million a month, the $1 billion that it has will last for a while. It would take a while for them to actually start panicking.
Cash Inflow to Come Through From Online Casinos
The advantage that Aristocrat has during casino closures is that the company also provides slot machine too online casinos. Hence, it can also use that for money inflow until they gradually get back into the game.
After all, there has been quite a shift of people from land casinos to online casinos. Hence, the losses they are facing now may be covered online. If not, adaptations can be made from the 25% market share earnings.
Above, Aristocrat is currently dominating the online slots market. Hence, it will probably do well during the casino closures.
- Aristocrat – 27
- SciGames- 23
- IGT- 19
- Others- 22
While some businesses are ailing the online casino businesses are not facing that many challenges. This is because they are the safest place to place casino games right now. Hence, it would be a pretty smart move for investors to actually venture more into the online casino market.