Slot machine games and cabinets didn’t disappoint at the 2024 Global Gaming Expo, according to Truist Securities analyst Barry Jonas, who shared his views in an October 11 investor note.

Jonas met with 14 different companies at the trade show, finding Aristocrat to be riding high following the Dragon Train verdict. However, court-enjoined Light & Wonder was said to be “still making gains amidst a very diverse offering.” Jonas even saw a silver lining in the Dragon Train affair, with the selloff in Light & Wonder stock creating “a buying opportunity.

“Best G2E ever,” exclaimed Jonas, who “came away impressed by the depth and breadth of offerings on display from multiple companies.” In the slot sector, as in Hollywood, sequels remain the order of the day, as spinoff games with popular formulas dominated the show floor.

Operators, seemingly in defiance of Nevada Judge Gloria Navarro, told Jonas they wouldn’t remove banned Dragon Train “and in many cases, the cabinets will stay on floors, with new game conversions.” Those operators indicated little to no disappointment in replacing Dragon Train with units of Huff N-Puff, also from Light & Wonder.

Focusing on the Dragon Train intellectual-property issue, Light & Wonder executives insisted that the court decision blocked “only a narrow portion of the game’s math,” hence the resolve to bring forth a second modified iteration of the controversial game. Jonas estimated that casinos would see the revised game in three to fourth months, followed by regulatory review.

“Bottom line, we would expect [Light & Wonder] to emerge from this ordeal,” Jonas wrote. “The biggest concern we heard [was] innovation risks moving forward with the development environment potential becoming overly cautious around IP litigation.”

In other casino-related news, Jonas said to expect few capex improvements in the coming year, as budgets remain flat with 2024. Even so, operators were anything but pessimistic.

“The Strip continues to combat the ‘peak’ narrative, not helped by an upcoming F1 race that is well-known to be tracking behind Y/Y on bookings,” Jonas found. “Operators did, however, believe that bookings would catch up to some degree.” He also noted strength in the run-up to the Consumer Electronics Show in January.

Fewer sparks were seen on the regional slate, with casino firms looking to expansions and remodeling rather than new products to drive business.

For Jonas, the critical growth driver was igaming, which Caesars Entertainment singled out for product improvements. “Management has been pleasantly surprised with customers’ appetite for parlays (likening to a lottery-ticket mentality), with higher bet frequency/leg count continuing to grind CZR’s hold rate higher,” he added.

A recurrent theme — and perceived threat — during G2E were sweepstakes games. “While technically legal in many states, many would liken sweepstakes to offshore OSB or gray-market skill-based gaming,” Jonas explained.

The analyst said that he’d heard theories to the effect that an explosion in sweepstakes might result in action at the state level. That action was said to be the recurrence of considering igaming as a new form of revenue.