UPDATE 2-Australia's Aristocrat to miss target, shares drop

(Adds analyst comment, details)

By Miranda Maxwell

SYDNEY, April 29 (Reuters) - Australian gaming machine maker Aristocrat Leisure Ltd (ALL.AX: Quote, Profile, Research, Stock Buzz) forecast earnings growth well below target this year, sending its shares down 8 percent in more bad news for the gaming sector in Australia.

Aristocrat, the world's No. 2 slot machine maker, said on Tuesday its earnings this year would be broadly in line with those of 2007 after a weak first half.

Analysts had on average been expecting a 10 percent rise in 2008 net profit to A$271.8 million ($254 million), according to eight forecasts on Reuters Estimates.

"Effectively it is a profit downgrade," said Karara Capital analyst Akshay Chopra.

"Their biggest market is the United States and there is no sign of improvement in that market. The U.S. economy is definitely exaggerating some of the issues Aristocrat is having in that market," he said.

The news is another blow to the sector, which has taken a hammering in recent weeks as smoking bans in gaming venues and regulatory changes are set to crimp profits in Australia.

Betting firms Tabcorp Ltd (TAH.AX: Quote, Profile, Research, Stock Buzz) and Tatts Group (TTS.AX: Quote, Profile, Research, Stock Buzz) posted their worst one-day losses on record earlier this month after an Australian state government announced plans to end their duopoly on operating gaming machines, eliminating up to 40 percent of their future earnings.