Sample Issue

FANTINI’S GAMING REPORT

More Important Than Your Morning Coffee

More Necessary Than Ever

November 9, 2009
Frank Fantini
Editor & Publisher

TOP STORIES:
LVS SEEKS $3.82 BILLION IN HK; LV SUITS DISMISSED
ILLINOIS DOWN, BUT BEST IN TWO YEARS
OH: TWO CHALLENGES TO CASINO APPROVAL
MO INVESTIGATING DAN LEE INCIDENT

INVESTORS
MARKET ACTION
ANALYST ACTION: IGT, LVS, MGM, MNTG
BOUGHT AND SOLD: ASCA, BALLY, WYNN

BRIEFLY
COMPANY NEWS: TACT, TROP LV, WM HILL
AROUND THE WORLD
USA: AC, IN, LV, MS, NY, PA, SD, WV
INDIAN COUNTRY: AZ, CA
INTERNATIONAL: BERMUDA, BULGARIA, MACAU
INTERNET: BODOG, GAMING MEDIA, NEO GAMES

ET AL
INVESTOR EVENTS
CONTACT US


TOP STORIES


LVS SEEKS $3.82 BILLION IN HK; LV SUITS DISMISSED

Las Vegas Sands apparently will seek to raise nearly twice the money in a Hong Kong IPO than previously thought.

The company is proposing to raise up to US$3.35 billion by selling stakes in its Macau operations, the Wall Street Journal reported from sources. Previously, LVS had been expected to raise $2 billion or so.

The price of HK$10.38 to HK$13.88 a share is 13.5 to 16.5 times projected 2010 earnings of its Macau properties, Reuters said.

The amounts to be raised would clearly be enough for LVS to revive construction of sites Five and Six in Macau as the company develops the Cotai Strip, a 20,000-room, multi-resort version of the Las Vegas Strip.

Citigroup and Goldman Sachs are the global coordinators of the sale and will be co-book runners along with BNP Paribas and Barclays.

Elsewhere, three shareholder lawsuits in Nevada have been dismissed.

The suits, similar to those against other companies with the collapse of stock prices late last year through March, blamed the board for the plunge in share value and said directors weren’t independent enough of CEO Sheldon Adelson.


ILLINOIS DOWN, BUT BEST IN TWO YEARS

In another sign that casinos are stabilizing, Illinois reported its best year-over-year comparison in two years in October.

Revenues fell 4.25 percent, but that was the best comparison since November 2007, the last time Illinois grew revenues, 4.24 percent at the time.

The showing also is a big improvement over the 9.94 percent year-to-date decline through September.

However, an indication of how far Illinois has fallen between the 2008 smoking ban and the recession is reflected in the October comparison to 2007, down 28.74 percent.

Illinois is the second major casino state to report. Iowa also showed less decline in its October numbers.

The story will take fuller shape by Tuesday when Indiana, Missouri and Atlantic City will have reported.

October benefitted from 10 weekend days compared to nine last year.

Chicagoland

Grand Vic Elgin (50/50 MGM, Hyatt) $23.605 million - 9.44 percent
Hollywood Aurora (PENN) $15.318 - 9.57
Empress Joliet (PENN) $12.942 - 9.71
Harrah's Joliet (Harrah's) $20.306 -11.16

Chicagoland total $72.171 -10.01
Chicagoland same store $59.229 -10.07


St. Louis

Alton Belle (PENN) $ 6.663 - 8.31
Casino Queen, E. St. Louis $11.790 - 3.50

St. Louis total $18.453 - 5.29

Elsewhere

Jumer's Rock Island $ 6.393 +155.62
E. Peoria (BYD) $ 9.724 + 0.82
Metropolis (Harrah's) $10.099 - 1.00

State total $116.840 million - 4.25 percent
* Same store $110.447 - 7.60

2007 Comparison to 2009
State total $163.963 - 28.74
* Same store $161.083 - 7.60

Multiple property companies:

Harrah's $30.405 million - 8.02 percent
Penn National $34.923 - 9.39

* Excludes Rock Island, which doubled capacity in a new casino last year.



OH: TWO CHALLENGES TO CASINOS APPROVAL

At least two challenges are imminent to the referendum victory that permits Penn National and Dan Gilbert to build a total of four casinos in Ohio.

Long-time casino advocate Sen. Lou Blessing will push for another referendum in May that would strip PENN and Gilbert of the casinos, instead putting them up for bid. His bill also would require local approval, which could KO plans in Columbus where Franklin County residents voted against Issue 3, the Akron Beacon-Journal reported.

Elsewhere, the American Policy Roundtable intends to announce a plan to undo Issue 3, the newspaper said. The Roundtable also wants to amend Ohio’s constitution to allow referendums only in major elections every two years, noting that fewer than 10 percent of voters decided for casinos.

But Gov. Ted Strickland, who opposed Issue 3, will focus now on implementing the casinos, the newspaper reported.

Strickland must appoint a seven-member gaming commission, and the legislature has six months in which to enact enabling legislation.



MO INVESTIGATING DAN LEE INCIDENT

The incident in which a local official accused Dan Lee of intimidation may be growing into something more than a flap.

The Missouri Gaming Commission has agreed to investigate the incident in which County Councilman Steve Stenger accused the Pinnacle CEO.

The issue arose when Stenger said he felt intimidated after Lee urged him to vote against a casino rezoning that could open the door to a competitor in St. Louis, and then after Stenger had voted for the rezoning, approached him shouting about Stenger having made a big mistake.

Lee e-mailed an apology saying he meant no harm but just spoke passionately about the matter, the St. Louis Post-Dispatch had reported.

However, the apology “does not dismiss the seriousness of the threat,” State Sen. Tem Green wrote to the commission in asking for an investigation.

Lee was opposing a rezoning for a casino in north St. Louis County. Although there are no casino licenses available in Missouri, the gaming commission has indicated it can take away the license held by PNK’s President Casino when that riverboat’s marine certification expires next year. If that happens, it could free the license for the north St. Louis project.

In the meantime, PNK is investing heavily in St. Louis, having built upscale Lumiere Place in downtown St. Louis and currently constructing River City in south St. Louis County. PNK also intends to repair the President’s hull hoping to extend its license.


INVESTORS

MARKET ACTION

Closing averages for Friday:

Big cap +1.13 percent
Mid cap +0.80
Small cap - 0.66

No 52-week closing highs or lows.

Five percent movers:

AMZ Holdings + 8.87 percent
IGT + 8.73

Lakes - 7.16
Diamondhead Casino - 9.21
AsianLogic -10.20
MTR Gaming -11.29


ANALYST ACTION: IGT, LVS, MGM, MNTG

• IGT David Katz of Oppenheimer said IGT’s results and guidance suggest that the trajectory of recovery will largely depend of its ability to bring new products to market, the timing of new market opportunities and the scale of improvement in replacement activity.

Katz maintained his perform rating, but raised his target price from $19 to $22 saying that management is pursuing a solid product and operating strategy.

His 2010 and 2011 earnings estimates go to $0.95 and $1.18.

David Bain of Sterne Agree downgraded his earnings estimates to 16 and 21 cents a share, a revenue mix shift more weighted to one-time product sales rather than he previously modeled.

He maintains a neutral rating and $18.10 target price.

Steve Kent of Goldman Sachs maintains his buy rating, target price and earnings estimates $18.56 and $1.00 for fiscal 2010.

Joe Greff of JP Morgan reiterated his overweight rating and $23 price target saying that management’s EPS estimates of 83 to 93 cents a share for fiscal 2010 is a good base to start. His earnings estimates are 90 cents this year and $1.13 next.

Other analysts on IGT:

Firm Rating Target EPS 2009/2010/ 2011/ 2012

Stifel Nicolaus Buy $24 $0.78/ $0.88
Steve Wieczynski

Bofa/ML Buy $24 $0.84/ $1.00/ $1.11/$1.26
Vincent J. Zahn

Macquarie Neutral $18 $0.83/ $1.05/$1.05/$1.08
Joel Simkins

Ralph Schackart Outperform N/A $0.51/$0.82/$1.08
William Blair & Company


• LAS VEGAS SANDS Scott Barry of Credit Suisse raised his target price from $9 to $13 citing a stronger than expected recovery for LVS in Macau. He maintains a neutral rating, while his 2009 and 2010 earnings estimates are minutes 27 cents a share this year and positive 39 next.

Todd Eilers lowered his target a buck to $16 saying IGT had a strong fourth quarter but its conservative guidance is disappointing. IGT guided to 83 to 93 cents a share factoring out a 6-cent hit on valuation of its convertible debt.

Eilers, who rates IGT a hold rating, forecasts the company to earn 83 cents a share this fiscal year and $1.01 next.

• MGM MIRAGE John Kempf of Barclays upgraded MGM’s senior unsecured notes to Market weight saying third quarter results were above his expectations. He maintains his market weight rating on the senior secured notes saying the high dollar price and relatively short duration should limit upside.

Scott Barry of Credit Suisse maintained his neutral rating and target price of $8 on MGM stock. His 2009 and 2010 earnings estimates are minus 67 cents a share this year and minus 42 next.

Shaun Kelley of Bank of America/Merrill Lynch lowered his target a dollar to $13 and maintains a neutral rating saying he sees both the bull and bear case on the stock.

While he sees MGM losing money over the next three years, he also sees EBITDA growing to $1.38 billion next year and $1.448 billion in 2010.

Joel Simkins of Macquarie remains neutral on MGM with an $8 target saying the modest improvement in the fourth quarter is basically insignificant in the bigger picture.

• MTR GAMING. Steve Wieczynski of Stifel Nicolaus reiterated his hold rating noting that MNTG properties will be hurt by new Ohio casinos and that, while the company may have growth opportunities, it can only invest $40 million after which it must fund them with 50 percent equity.

Wieczynski estimates that MNTG will lose 12 cents a share this year and 6 next.


BOUGHT AND SOLD: ASCA, BALLY, WYNN

• AMERISTAR. Sirios Capital reporting owning 3.074 million shares or 5.33 percent of ASCA.

• BALLY. Director David Robbins sold 40,000 shares at prices ranging from $41.54 to $43.30. He has 107,858 shares remaining.

• WYNN. Waddell & Reed reported owning 14.294 million shares of WYNN, 11.3 percent and up from 5.21 percent as of June 30.


BRIEFLY

COMPANY NEWS: TACT, TROP LV, WM HILL

• TRANSACT TECHNOLOGIES will be the exclusive printer provider to Spielo as it places slot machines in the emerging VLT market, TACT announced.

TACT expects to ship $1 million of printers this quarter and $2 million throughout 2010.

Spielo is a subsidiary of Lottomatica, parent of GTECH to whom TACT is the exclusive supplier of printers.

• TROPICANA Las Vegas has appointed Charles Esposito as GM. Espositor is the latest of several Fontainebleau LV executives hired by the Trop, which recetly emerged from bankruptcy is in the midst of its first of several planned renovations.

• WILLIAM HILL is issuing its first bonds as part of its plan to diversify its debt structure now that its bank debt has been refinanced.

The British bookmaker will raise £300 million in sales to institutional investors of bonds with a 7.125 percent coupon later this week.

Among other purposes, proceeds will reduce bank debt.


AROUND THE WORLD

USA: AC, IN, LV, MS, NY, PA, SD, WV

• ATLANTIC CITY casinos shed more than 500 jobs last month, The Press of Atlantic City reported.

New figures by the Casino Control Commission revealed that all 11 hotels cut jobs in October. The Borgata cut 175 jobs, while the others made small reductions.

AC casinos now employ 36,812 workers, 3,312 fewer than last year and 28.6 percent below the 51,560 peak in July 2007.

• INDIANA racetracks likely will not get their slot taxes reduced from 50 percent to the 35 percent paid by riverboats.

Gov. Mitch Daniels has come out saying he opposes lower taxes, the Louisville Courier-Journal reported.

However, Daniels did indicate he may consider other forms of relief, such as allowing riverboats to end the expense of having to be marine certified.

A legislative committee is currently doing a comprehensive study of Indiana gaming with some possibilities being to allow the racetracks to have table games, and allowing casinos to build on land.

• LAS VEGAS. Fontainebleau might be getting help from very interested third parties – the contractors to whom the project owes money.

According to the Las Vegas Sun, contractors, including giant Tutor Perini, are trying to find lenders and casino companies that can help finance, finish and run the upscale casino that sits idle along the Strip, 70 percent complete.

The contractors have motivation. They have filed $615 million in liens against the project, plus there are hundreds of millions more to be spent on completion.

• LAS VEGAS. In an agreement that probably means next to nothing, Tamares Group and Elad have settled their differences to allow Elad to use the Plaza name on its proposed $8 billion Las Vegas mega resort, globes.co.il reported.

Tamares, which owns the Plaza Casino in downtown Las Vegas, objected to Elad, owner of the Plaza Hotel in New York, intending to use that name on the mega resort.

Elad’s project, planned for the acreage once occupied by the New Frontier, has sat idle during the credit crunch, recession and fear of overbuilding along the LV Strip.

• MISSISSIPPI Developers of the proposed 266-acre Broadwater casino resort have been given a two-year extension by the Biloxi Planning commission, the Biloxi Sun-Herald reported.

The plan features a marina, hotel, retail space and golf course.

So far, the plan has been granted two extensions with Foxwoods Casino backing out in 2006 and financial backer Lehman Brothers going bankrupt last fall.

Developers are Roy Anderson III and Cotton Fore.

• NEW YORK. Steve Wynn might have quit the Aqueduct slot parlor race when required to pony up $200 million in advance, but the five remaining bidders are staying in.

All five met Friday’s deadline to promise to pay a $200 million fee within 30 days of being selected to develop the 4,500-machine slot parlor, Blood-Horse reported.

The bidders are Larry Woof’s Navegante Group, which also said it can have slots operational within six months of selection, Delaware North-Harrah’s, SL Green-Hard Rock, Penn National, and Peebles-MGM Mirage.

• PENNSYLVANIA. The Rivers Casino, off to a slow start in downtown Pittsburgh, now has two unions seeking to organize its, workers the Pittsburgh Post-Gazette reported.

The Security, Police and Fire Professionals of America also filed an unfair labor practice alleging, among other things, that the casino has threatened some workers with loss of wages, etc., if they vote to unionize.

The United Steelworkers of America is also seeking to enroll up to 800 non-security employees at Rivers casino.

• SOUTH DAKOTA. Officials at the $47 million casino, resort, hotel and convention center in Deadwood announced the property is on schedule to be open in early December, the Rapid City Journal reported.

The casino will have 300 slot machines.

• WEST VIRGINIA. Here’s a switch. A politician proposing to lower taming taxes.

Sen. Ed Bowman wants to cut the 35 percent able and 49 percent slot tax on the state’s casinos to help them compete with the coming Ohio casinos, West Virginia Public Broadcasting reported.

The four just-approved Ohio casinos will pay a 33 percent tax.


INDIAN COUNTRY: AZ, CA

• ARIZONA Fire Rock Navajo Casino, the Navajo’s first casino, reported a stellar performance first year, The Navajo times reported.

Though is not releasing financial details, Fire Rock says it is on track to repay its $34 million debt owed to Navajo Nation.

The casino player club boasts 51,000 members and Fire Rock made changes to increase revenue, such as reducing its 500-seat bingo hall to 250 to make more room for more slots.

Fire Rock is the first of a half-dozen casinos the Navajo will open on their reservation in Arizona and New Mexico.

Elsewhere, the Salt River Pima-Maricopa Indians are scheduled to open their $400 million hotel and casino in April. At 497 rooms, 800 slot machines, 50 poker tables, keno and off track betting space, the of 240,000 square foot casino will be the biggest in Arizona.

• CALIFORNIA. The Big Sandy band of Western Mono Indians withdrew its application for more slot machines despite receiving gaming commission approval, The Fresno Bee reported.

They were awarded 1,650 slot licenses on October 5, but never made the $2 million licensing payment and withdrew their application.

They operate 350 slots at their casino in Fresno County.


INTERNATIONAL: BERMUDA, BULGARIA, MACAU

• BERMUDA. Prime Minister Ewart Brown appears determined to put a study of legalizing gaming in front of parliament before he leaves office next October, The Royale Gazette reported.

However, he faces opposition from members of parliament, many of whom point to the Gazette’s survey that only 34 percent of Bermudans want to legalize gaming while 47 percent oppose, the newspaper said.

• BULGARIA, which has one of the fastest-growing casino industries in Europe, though hurt by recession, is considering raising the gaming tax from 10 to 12 percent.

• MACAU. The long-expected 1.25 percent cap on VIP junket commissions is being delayed again.

The Macau government has delayed implementation until December 1, the Wall Street Journal reported.


INTERNET: BODOG, GAMING MEDIA, NEO GAMES

• BODOG hired Everest PR chief Ed Pownall to head a new global press office in London, EGR Magazine reported. Pownall previously worked in marketing roles for Jackpotjoy, Skybet and Blue Square.

• GAMING MEDIA announced that it is acquiring 49 percent of Ipgrach.com, the leading online gaming company in Bulgaria.

• NEO GAMES, the online scratch card business, launched a new game called the fairy tale, EGR Magazine reported. The game was localized to all Neogames’ licensees, is available in 11 European languages.


ET AL

INVESTOR EVENTS:

CONFERENCE CALLS:

• CENTURY CASINOS. November 9, 12:30 pm ET. Phone: 800-895-0198 domestic or 1-785-424-1053 international; pass code Quarter 3; and via webcast at www.cnty.com/corporate/investor/financial-results/.

• 888 HOLDINGS. November 10, 4:30 am ET. Phone: +44 020 7138 0816; pass code 6477869. Replay available through November 17at +44 020 7111 1244; pass code 6477869.

• ELIXIR GAMING. November 10, 8:30 am ET. Phone: 800-915-4586 domestic or 1-212-231-2900 international; and via webcast at www.elixirgaming.com. Replay will be archived on the website through December 9.

• FULL HOUSE RESORTS. November 10, 9:30 am ET. Phone: 877-941-8418 domestic and 1-480-629-9809 international; and via webcast at www.fullhouseresorts.com. Replay available through November 17 at 800-406-7325 domestic and 1-303-590-3030 international; pass code 4181220.

• WELLS GARDNER. November 10, 11 am ET. Phone: 888-713-4215 domestic; pass code 82796507; and via webcast at www.wellsgardner.com. Replay available through December 11 at 888-286-8010; pass code 69773235.

• PENINSULA GAMING. November 10, 1 pm ET. Phone: 877-741-4240. Replay available through November 24 at 888-203-1112; pass code 6973240.

• LOTTOMATICA. November 11, 12 noon ET. Phone: 1-646-843-4608 US; +39 02 362 696 65 Italy; +44 020 3023 4491 UK; and via webcast at www.lottomaticagroup.com.

• YOUBET.COM. November 11, 5 pm. ET. Phone: 877-857-6163 and via webcast at www.youbet.com. Replay available through November 18 at 888-203-1112; pass code 8430700; and archived on the website through December 12.

• CRYPTOLOGIC. November 13, 8:30 am ET. Phone: 1-800-766-6630 US; 416-340-8410 Canada; ++ 00-800-4222-8835 UK and international; and via webcast at www.cryptologic.com. Replay available November 12 at 416-695-5800 or 1-800-408-3053; pass code 6421021# and transcript available at the company’s website.

• RIVER ROCK. November 16, 5 pm ET. Phone: 888-525-6276 domestic or 1-719-457-2668 international; and via webcast at www.riverrockcasino.com. Replay available through November 23 at 888-203-1112 domestic or 1-719-457-0820 international; pass code 8301464.

• MOHEGAN SUN. November 20, 11 am ET. Phone: 888-748-0596 domestic and 1-706-643-0107 international; pass code 39942165; and via webcast at www.mtga.com. Replay available through December 4 at 800-642-1687 domestic and 1-706-645-9291 international; pass code 39942165.


CONFERENCE CALL REPLAYS:

• AMERISTAR. Replay available through November 18 at 800-642-1687 domestic and 1-706-645-9291 international; pass code 36216401.

• BALLY TECHNOLOGIES. Replay will be archived at www.ballytech.com.

• GLOBAL CASH ACCESS. Replay available at: 888-286-8010 domestic and 1-617-801-6888 international; pass code 64976997.

• IGT. Replay will available through November 13 at 800-293-4240 domestic and 1-203-369-3224 international; and archived at www.igt.com/investorrelations.

• LAKES ENTERTAINMENT. Replay available through November 19 at 888-286-8010; pass code 16421772.

• LITTLEFIELD CORP. Replay will be archived through January 28 at www.vcall.com.

• MGM. Replay available through November 11 at 1-800-642-1687 domestic; 1-706-645-9291 international; pass code 35345375 and archived at www.mgmmirage.com.

• MTR GAMING. Replay will be archived at www.mtrgaming.com

• PENN NATIONAL. Replay available through November 20 at 800-633-8284 domestic or 1-402-977-9140 international, pass code 21440021; and archived at www.pngaming.com.

• PINNACLE. Replay available through November 12 at 800-642-1687 domestic and 1-706-645-9291 international; pass code 35542900.

• SCIENTIFIC GAMES. Replay will be archived through November 25 at www.scientificgames.com.

• TRANSACT TECHNOLOGIES. Replay available through November 9 at 888-203-1112; pass code 3094364; and archived at www.transact-tech.com.

• WMS. Replay will be archived through November 25 at www.wms.com.

• WYNN. Replay available at 800-642-1687 domestic and 1-706-645-9291 international; pass code 37555715.


INVESTOR EVENTS/WEBCASTS:

• MERRIMAN CURHAN FORD – 6th ANNUAL INVESTOR SUMMIT 2009 November 10. www.wsw.com/webcast/mcm12

- Electronic Game Card; 3:30 pm ET. www.wsw.com/webcast/mcm12/egmi


• G2E GAMING INVESTMENT FORUM hosted by Deutsche Bank Securities and UBS Investment Bank – November 17

- Elixir Gaming; 3:00 pm ET. www.elixirgaming.com



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