Head Strategist for Pokies Maker Steps Down, Ainsworth Stocks Plummet

Ainsworth Game Technology is Australia’s second largest manufacturer of poker machines, right behind Aristocrat Leisure Limited; two companies that were—coincidentally—both started by pokies tycoon Len Ainsworth. In the last year, Ainsworth Game Technology has experienced a moderate decline in shares, mostly attributed to a grappling rivalry with its biggest competitor. But when one of the pokies maker’s core assets, Scott Clarebrough announced his retirement, stock prices plummeted.

Clarebrough, who’s been doing a phenomenal job as the company’s General Manager of Strategy and Development for more than 5 years, announced Wednesday that he would be stepping down. The reaction on the stock exchange was almost immediate as share prices began to plunge, dipping as low as –14% to $2.26 throughout the day.

Mr. Clarebrough’s retirement is taking a heavy toll on Ainsworth as it’s cast a shadow of skepticism over the pokies marker’s ability to produce quality games of the same caliber. There are many who saw Clarebrough as the architectural mastermind behind the company’s success in recent years, responsible for mentoring the group who designed some of the brand’s most popular poker machines, like Showgirls and The Sound of Music.

But as Danny Gladstone, Chief Executive at Ainsworth, was quick to point out, investors are overreacting. Clarebrough’s presence at Ainsworth Game Technology will continue, he said, as Scott will remain with the company for the next 12 months, and there are currently talks about Mr. Clarebrough working from the sidelines as an advisor beyond that point.

“To use a football analogy,” Gladstone told Fairfax Media, “he’s been coaching for the last five or six years and he’s got some very good people who he has acted as a mentor to. But there is a solid plan for the rollout of games and we have a 45-strong design team who are working on that,” he said.

Scott Clarebrough has spent more than 30 years working in the gambling business. Before joining Ainsworth Game Technology, he was the Marketing Director for the Australian face of International Game Technology (IGT); a position he took after leaving the Tatts Group, where he filled the role of General Manager of Commercial Operations.

ASX: Ainsworth (AGI) vs Aristocrat (ALL)

When the Australian Stock Exchange opened at 10.00am Wednesday morning, AGI was listed at $2.67. The price began dropping instantly, falling to its lowest point of $2.26 (-14%) around 3.30pm. By the end of business day, AGI recovered slightly to $2.35, leaving shares down 11% on the day with market capitalisation of approximately $780.5 million.

However, Clarebrough’s retirement isn’t the only problem Ainsworth is facing. The company’s market share has been dropping for the last year due to the aggressive strategy of its top rival, Aristocrat. That company’s stock (ASX: ALL) has been rising for the last month, closing at $9.55 today with a market capitalisation of $6.154 billion.

Len Ainsworth, who founded Aristocrat in 1953, built that company from the ground floor up, creating the largest pokies maker in the nation. He subsequently left Aristocrat in 1994—although his family still owns a large portion of the company—to found a new poker machine manufacturer, Ainsworth Game Technology, established in 1995. Needless to say, the rivalry has been intense.