Investors Corner (Nov. 12-16)

Profits from the gaming division of Rank Group plc (RNK.L) will likely offset losses from the British leisure company's Hard Rock Cafes in the wake of the Sept. 11 attacks, Rank finance director Ian Dyson told Reuters last week.

The company, which owns Grosvenor casinos and Mecca bingo halls, as well as the chain of Hard Rock restaurants and the Hard Rock Hotel and Casino in Las Vegas, expects its operating profit to be 15 percent below that of last year.

Shares of Rank have outperformed the U.K. leisure sector by 19 percent since the start of the year. Financial analyst Fraser Ramzan, of Lehman Brothers, predicts Rank's full-year pre-tax profit to be £172 million.

"The news from Hard Rock is no shock, and the rest of the business actually looks slightly better," Ramzan said.

Trading Good for Gaming Insight

Gaming Insight plc (GIN.L) ended the week on a high note after its shares jumped 20.5 percent on Thursday to 11 pence and closed Friday up 2.3 percent at 11.25 pence.

The British online betting company issued an optimistic trading statement Thursday, saying it has neither seen a decline in trading after releasing its interim report on Sept. 28 nor suffered because of the events on Sept. 11.

Gaming Insight, which has four Web sites--zapcasino.com, Racing-Network.co.uk, GoBarkingMad.com and SportsMAD.com, said it considers U.S. law unclear as it relates to Internet gambling. The firm's casino site, zapcasino.com, does not take bets from within the United States and so remained unharmed by the economic fallout from the terrorist attacks, the company said.

Hilton Betting Turnover up 25 Percent

Hotel and casino owner Hilton Group plc (HG.L) reports a 25 percent increase in betting turnover for its Ladbrokes business during the four months leading up to Oct. 31.

Even though its betting business is performing strongly, Hilton's per-room revenue for its four- and five-star hotels fell 31.7 percent and 14.7 percent respectively. Analysts expect Hilton to achieve profits of £290 million for the year.

After tax-free betting began on Oct. 6, Hilton moved its Gibraltar operation back to the United Kingdom. The firm reports its e-gaming section has more than 220,000 registered users. Sports book turnover for Net betting is topping £3 million per week and the recently launched Balls! game is netting £500,000 in turnover per week.

Hilton Group shares closed at 209.25 pence per share on Friday.

SNAI Turnover Down

Italian bookmaker SNAI International Ltd. (SNA.MI) said this week that its third quarter report reflects turnover of 74 million euros, a 35 percent decline from the same period in 2000. SNAI had pre-tax losses of 26.2 million euros.

Wembley Directors Move on Stock

Wembley plc (WMY.L), owner of racetracks and operator of greyhound race betting site 24dogs.com, saw one of its directors double his shares in the company this week while another executive made a sale with his shares.

Non-executive director Peter Harris bought 5,000 shares on Monday for an average price of 693 pence per share. The purchase cost him £35,000. Finance director Mark Elliot, on the other hand, sold 21,277 shares for 720 pence each, earning £153,000 from the sale.

Wembley shares were at their highest point in two months when the transactions took place. Wembley stock closed at 750 pence per share on Friday after rising 0.7 percent to 725 pence on Thursday.

Merrill Lynch to Cover Penn National Gaming

As of Monday investment brokerage Merrill Lynch is covering casino and racetrack operator Penn National Gaming Inc. (PENN).

Merrill Lynch gave Penn an initial investment rating of "buy" and a 12-month price target of $26 on the shares. The company predicts strong growth for Penn in 2002.

"Over the past several years, Penn has significantly expanded its portfolio, yet its returns on capital remain above nearly every other casino operator under our coverage," analyst David Anders said.

Bentley Buys Two Racing Sites

Bentley Communications Corp. (BTLY.OB) last week announced its purchase of TurfClub.com and TracksideBroadcasting.com from Enterprise Holdings Inc. for up to 2 million shares and other considerations.

Enterprise and Bentley have also agreed to participate in a joint venture that aims to give Japan's citizens access to bet on U.S. thoroughbred racing. TurfClub.com is a thoroughbred racing Web site that is transitioning from a handicapping service to a betting portal. TracksideBroadcasting.com is the owner of the Los Angeles-based radio program "Trackside with Roger Stein."

Bentley said it plans to use expand the radio show to other cities in the next three years and to use the broadcasting company to market its other products and services, including those of TurnClub.com.

Reports Released

Internet poker licensing operation Poker.com Inc. (PKER.OB) reported revenue of $468,000 for the quarter ending Sept. 30. That represents a new record for the company and a 293 percent increase from last year's Q3 revenue of $166,000.

Youbet.com Inc. (UBET) experienced decreases in both revenue and wagering handle during its third quarter. Revenue was down 19 percent from the same period last year to $1.1 million from $1.4 million. Handle was $18.8 million compared to $22.4 million in the third quarter of 2000.

Virtgame.com Corp. (VGTI.OB) announced third quarter results that included a jump in continuing operations revenues to $143,350 for the three months ending Sept. 30 from $131,538 during the corresponding period in 2000.

eLOT Inc. (ELOT.OB) also released a third quarter report this week. The lottery company filed for bankruptcy on Oct. 15 after the close of the quarter ending on Sept. 30. The owners of the company continue to operate eLOT as debtors-in-possession under Chapter 11 of the U.S. Bankruptcy Code.