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What’s happening to the share prices of Crown Resorts Ltd and Aristocrat Leisure Limited?

It’s been mixed fortunes for investors in gambling related shares over the course of calendar year 2015 and the outlook for 2016 certainly appears to remain divergent for a number of companies in the sector.

One particularly interesting fact is that not only have certain gambling related stocks been soaring while others have been falling, but interestingly the nearest peers in two cases outlined below have had completely divergent performances.

One stock soaring

Poker machine developer Aristocrat Leisure Limited (ASX: ALL) reported financial year (FY) 2015 revenue growth of 89% to $1.6 billion, earnings per share (before amortisation) growth of 61% to 37.1 cents per share (cps) and dividend growth of 6.25% to 17 cps.

The highlight for the group was the Americas division which recorded revenue growth of 82.5% in North America and 43.5% in Latin America.

Importantly, management has provided an upbeat outlook statement for the 2016 financial year with the Americas Class III premium gaming operations singled out for further growth.

The strongly performing Aristocrat operations have sent the share price up 46% year to date. In contrast, shares in its nearest competitor Ainsworth Game Technology Limited (ASX: AGI) have gained just 1.5%.

One stock falling

Crown Resorts Ltd (ASX: CWN) owns and operates casinos both in Australia and the US as well as having major exposure to two casinos in Macau, China. The group reported a decline in profits in FY 2015 largely due to the difficult operating environment being experienced in Macau.

Despite the headwinds the group continues to find ways to expand including via its new license to operate in Sydney and through the recent acquisition of a 20% interest in the international restaurant and hotel company Nobu for $100 million. In both examples, Crown continues to expand its position within the global luxury entertainment space.

Shares in Crown have lost 8.5% year to date, while its domestic peer Star Entertainment Group Ltd (ASX: SGR) – previously known as Echo Entertainment Group – has recorded a 28% jump in its share price.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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