Wall Street casino gaming analysts are closely watching slot machine developers, Bally Technologies and Aristocrat Technologies amidst strong rumors that the Australian-based Aristocrat could be in talks to acquire the Vegas-based Bally. With speculation driving Bally's stock prices up over 7% last week, the possibility of an acquisition does indeed exists, although several notable casino gaming analysts are predicting a partnership is unlikely at the current time.

Steven Wieczynski, who is a gaming analyst with Baltimore-based Stifel Nicolaus, recently issued a report confirming the speculation of an acquisition, but stated in an interview that he does not think the deal will go through because of a pending legal case between Bally Technologies and the global leader of casino slot machine production, International Game Technology. With several lawsuits still to play out, it would be devastating for Aristocrat if they were to acquire Bally, only to have IGT win one of their lawsuits thereafter.

The rumors and speculation of an acquisition are not unwarranted, however. At the 2006 Global Gaming Expo, Aristocrat and Bally jointly unveiled their plans to team up and develop a server-based software system for land-based casino slots. Giving casinos the power to program slot machines from behind closed doors, server-based technology is likely to be the wave of the future for electronic gaming devices offering video poker and slots. Understandably, the announcement was met with widespread enthusiasm by the gaming industry at large, and speculation of a merger soon followed.

Both Aristocrat and Bally would not comment on the speculation, while sources at Aristocrat did reveal there was no truth to the speculation. The one thing that most people can agree on is that a merger would indeed be beneficial to both companies, who would be better suited to compete with giants like International Gaming Technology (who also has stakes in the online gambling world via their software company, WagerWorks) and WMS Gaming. Bally would stand to benefit from Aristocrat's technology and presence in the Asia-Pacific region, while Aristocrat would stand to gain a better foothold in the U.S.