Aristocrat Leisure (ASX: ALL) has historically been a pokies manufacturer, but has broadened its product range. It now offers computerized card game simulations, electronic table games, and linked jackpot systems (such as the patented Hyperlink systems). The company has developed the Reel Power system, where players buy reels instead of lines, winning combinations in the standard configuration. AIt is an ASX 20 company in dozens of jurisdictions, over 70% of its revenue recurring and a combined TAM of ~$350bn across its different segments.

The company has performed solidly in the last year, propelled by the company's varied gaming portfolio and effective execution in the North American market.

In FY23, the 12 months to September 30 2023, the company made $6.3bn in revenue (up 13%) and a $1.45bn post-tax profit (up 53%). It has been led by Trevor Croker who has been at the helm since 2017 and served in lower management roles with the company prior to that.

For FY24, $6.7bn in revenue is forecast and $7.1bn in FY25 – both representing 6% growth. Although a 5% decline in profit is expected for FY24, it is still anticipated to be $1.39bn. And growth is expected to return in FY25 with a $1.5bn profit forecast, representing 10% growth.

Light & Wonder might just be the best way to access the US betting market with PointsBet (ASX:PBH) having given up. It has a diverse range of businesses in the gambling products and services sector (particularly pokie machine manufacturing). The Las Vegas-headquartered company was listed on the NASDAQ, but chose to list down under in 2023 due to interest from local fund managers.

In CY23, it delivered a 16% jump in revenue to US$2.9bn and it delivered a US$180m profit.

Jumbo Interactive (ASX: JIN) is a lotteries retailer and a provider of a SaaS platform that helps government and charity lottery operators do business. It stared out in 1995 as a builder and seller of website design services. One of its clients was an online lotteries provider and Jumbo, seeing the growth in online lotteries, bought a company that sold Oz Lotto and Powerball tickets online. Fast forward to 2024 and Jumbo has over 2 million players from Australia and abroad.

Founder Mike Veverka has remained at the helm since its inception and retains a 14.1% stake in the company. And with only 36% of lotteries having gone digital, there is more opportunity for Jumbo to capture at home and abroad. On top of all this, it has a resale agreement with gambling giant Tabcorp.

With a strong dividend yield of 2.41% and a 22% rise in share price since the beginning of 2024, Jumbo is an undervalued stock with a lot of room to grow and pay out dividends. Its strategy is to convert customers and generate strong free cash flow, which is supported by a net cash balance sheet.