Light & Wonder Inc (ASX: LNW) and Aristocrat Leisure Ltd (ASX: ALL) shares have both experienced a roller coaster ride throughout the past 12 months.
The two gaming stocks, both of which are listed on the S&P/ASX 100 Index (ASX: XTO), have benefitted from continued growth in the US casino industry.
With a duopoly over the slot machine category, Light & Wonder and Aristocrat Leisure are attractive options for investors looking for growth.
At the time of writing on Thursday morning, Light & Wonder shares are down 1.88% to $130.95 a piece
At the same time, Aristocrat Leisure shares are up 0.39% to $69.31 each.
But Macquarie Group Ltd (ASX: MQG) expects only one of the stocks to produce strong returns over the next 12 months.
Light & Wonder vs Aristocrat Leisure shares
According to a recent note to investors, Macquarie has an outperform rating on both Light & Wonder and Aristocrat Leisure shares.
The broker has a target price of $180 on Light & Wonder shares, down from its $188 target price in June. That represents a potential upside of 37.5% at the time of writing.
For Aristocrat Leisure shares, Macquarie has maintained its $70 per share target price. That's a potential 0.9% upside for investors over the next 12 months.
The broker said it has reviewed US casino gaming revenue trends in July 2025 based on data from 26 jurisdictions.
Overall, gaming revenues were up 5% year on year to US$4.5 billion. This suggests year-to-date growth is 2%.
Regional gaming revenues, which account for 85% of volumes, are also 5% higher year on year at US$3.7 billion. The sector has benefited from new openings and expansions in key states, including Illinois, Louisiana, and Virginia. Overall, 2025 year-to-date growth is 3% year on year.
Las Vegas gaming revenues were 6% higher year on year at US$749 million, but year-to-date growth is flat. In July, tables were 10% higher year on year, with softer turnover offset by a below-average hold rate in the prior period. Slots were up 2%.
Optimistic outlook for gaming industry
Macquarie said US casino gaming revenues remain resilient, with long-term analysis showing the industry is relatively insulated from macro volatility.
"Overall, we continue to like the slot manufacturers, which should benefit from this industry backdrop; Light & Wonder noted at its 2Q25 result on 7 August 2025 that sentiment amongst customers has been improving over the last 3 months, and we could see potential tailwinds to customer demand from the One Big Beautiful Bill in 2H25+," the broker said.
"On catalysts, the Global gaming Expo (G2E) is in Las Vegas in early October 2025, and we may receive further updates from Light & Wonder on the ASX primary listing, with an aim to delist from the NASDAQ by November 2025."
