Land-Based Gaming Stocks Weathered Year Well
The stock price of many Las Vegas-based gaming stocks decreased in December, according to the Applied Analysis Gaming Index, a monthly average composed by Applied Analysis, a Las Vegas consulting company.
According to the company's figures, which include eight stocks (among them International Game Technology, Park Place Entertainment Corp. and MGM Mirage), the year ended with the index up 20 percent overall but down 6 percent for December.
Brian Gordon, a spokesman for Applied Analysis, said changes in stock price for December were a mixed bag of results.
"Overall, the changes in monthly average stock prices for December were mixed, with three of the five gaming operators posting gains, while International Game Technology posted a 2.8 percent decline," he said.
During December, Harrah's Entertainment's stock decreased an average of 5 percent in price due to lowered activity and more competition in the riverboat gambling arena. Other indices of gaming stock behavior differ markedly from the one put forth by Applied Analysis. The Dow Jones Casinos Index reported a 10 percent gain over last year, while the Standard and Poor's Industrial Average fell 25 percent.
According to the Dow Jones Casinos Index, MGM Mirage was up more than 10 percent for the year and Park Place Entertainment fell the most, with a decrease of about 15 percent. Mandalay Resort Group was up 40 percent.
Deutsche Bank Securities Analyst Marc Falcone said the stocks of most of the gaming industry were helped in part because they were not affected by the accounting problems that hurt so many other industries.
"Gaming also tends to be recession resistant, so gaming companies experienced stong profit performances in a difficult period," he said.
As for the year ahead, analysts do not see much positive change. Joe Greff, a gaming analyst for Fulcrum Global Partners, said gaming companies will probably not "see the same levels of growth in 2003, with some exceptions."
Scientific Games Extends Offer Period for MDI Purchase
Scientific Games Corp. (SGM) said Dec. 23 that MDI Entertainment Inc. has agreed to an extension of the tender offer by Scientific Games subsidiary Blue Suede Acquisition Corp. Blue Suede has extended the offer to midnight EST of Jan. 9.
Blue Suede is offering to buy all of the issued and outstanding stock of MDI Entertainment for $1.60 per share in cash.
The original tender offer period was supposed to end on Dec. 27. It was extended to give MDI shareholders more time to consider the offer during the holiday season.
Jupiters Finishes Breakwater Deal
Jupiters is putting the finishing touches on its AU $28 million purchase of Breakwater Island Trust after converting its 47.5 percent holding in the venture to a 94.2 percent stake.
The Breakwater Island Trust is aimed at integrating tourism and gaming at its facility in Townsville, Queensland, which includes the Sheraton Townsville Hotel and Casino, Breakwater Marina and the Townsville Entertainment and Convention Centre. It was established in 1984 to bring an international gaming presence to North Queensland.
Jupiters said it is giving unit holders in the trust the option of receiving cash or shares for their holdings. Jupiters is offering unit holders either AU 37 cents per share or two Jupiters shares for every 31 Breakwater units.
The company said it will benefit from the purchase of Breakwater by ending the duplicated functions and costs improving efficiency at the Breakwater site.
Jupiters, UNiTAB Merger on Hold
According to the Australian Financial Review, talks of a merger of Jupiters and UNiTAB are being delayed until the second quarter of this year.
UNiTAB is formerly known as TAB Queensland.
The publication states that PSS/CSS, which is the largest shareholder in Jupiters, would like to "explore options that would result in a cash payout to investors."
PSS/CSS is a pension fund for government employees that manages AU $10 billion in assets.
IGT Conference Call Jan. 22
International Game Technology will host a first-quarter conference call on Jan. 22 at 11 a.m. PST. To participate, U.S. callers should dial 888-428-4480 and international callers should dial 612-332-0720 and use the pass code "IGT." The call will be available on IGT's Website until Jan. 31.
Report Released
Interactive Systems Worldwide Inc. (ISWI) experienced a 9 percent decrease in net revenues to $4,314,000 in fiscal 2002. The West Patterson, N.J.-based company bases decrease on a discontinuation of minimum royalty payments cased by Global Interactive Gaming's default of license agreements. Global Interactive Gaming is the company's exclusive licensee for its play-by-play sports wagering technology.
Interactive Systems Worldwide Inc. (ISWI) - Yearend Report