News reports send
Progressive Gaming shares
on ’coaster ride

Mar 27, 2007 7:04 AM

Executives at Progressive Gaming International Inc. (PGIC) have had their hands full attempting to straighten out accounting irregularities that prevented on-time filings of financial reports and then losing a court decision that could be potentially costly.

Now, because of media reports filed late Friday, the company has to address "potential stock trading irregularities."

In previous disclosures through SEC filings, the company said it did not expect to pay any cash disbursements in fiscal 2007 due to the $13 million judgment against it in the Mississippi lawsuit, a figure that could be tripled to $39 million. Other than normal legal defense costs, the company said, it believed "it will prevail in its post trial motions in the case" or in the appeal process.

"Accordingly," the company stated in a Monday press release, "the company’s financial outlook remains unchanged."

That was a far cry from the Associated Press story of late Friday that suggested the company "might have to declare bankruptcy because of an unfavorable jury ruling against it."

Shortly after the news report, large numbers of shares began trading at a substantially lower share price.

Again on Monday morning, shares continued to trade in even larger numbers with the price dropping $1.12 to $$3.81 per share in the early hours.

Progressive Gaming countered by saying "The media items published specific excerpts related to the company’s risk factors disclosed in its form 10-K for the year ended December 31, 2006. Risk factors are required to be included in public filings and should be considered in the full context of all public disclosures including, but not limited to, quarterly reports, earnings releases, conferences calls and press releases."

Heather Rollo, company CFO, added, "We remain confident in our legal, financial and strategic position as outlined in our recent press announcement, quarterly conference call and FAQ posted on our website."

Almost ignored Monday was the announcement that PGIC, formerly known as Mikohn Gaming, and Interactive Systems Worldwide Inc. (ISWI) had settled the patent infringement lawsuit filed by ISWI over Progressive’s Rapid Bet Line product.

Interactive Systems will receive an initial license payment and ongoing royalty payments while Progressive will have a non-exclusive license to distribute its product worldwide.

At the end of trading on Monday, PGIC shares stood at $4.2 each, down $0.73 for the day. More than seven million shares changed hands on Monday. On a normal day, 585,000 are traded.

Jackpot loser

When does a jackpot winner become a loser? When he is underage!

That’s what happened with Dwayne T. Jenkins at the newly-opened Presque Isle Downs & Casino in Erie, Penn. last week.

Jenkins won a $1.445 jackpot and was asked to show identification before the prize could be paid. Unfortunately for him, he had been using false identification in order to gamble and drink beer.

Casino officials called police and Jenkins was cited for underage drinking and providing a false ID.

He forfeited the jackpot that could have helped him pay for a lawyer.

Presque Isle Downs & Casino is owned by MTR Group Inc. (MNTG).

Eight Wonder

Anyone seeking the "eighth wonder of the world" might find it in Macau. At least that is the opinion of Lawrence Klatzkin, gaming analyst for Jefferies & Co.

After recently visiting the various gaming properties in the Chinese enclave, Klatzkin wrote that he had found the "eighth wonder of the world" in the $2.4 billion Venetian Macau casino.

"The property," wrote Klatzkin, "compared with every other property we saw on the trip, was truly in a league of its own and we believe the property should perform extremely well by itself in addition to growing the Macau market as a whole."
Klatzkin added that he also was impressed with the company’s plans for the $3.6 billion Marina Bay Sands in Singapore which is expected to open in 2009.

The Venetian Macau is one of several developments of the Las Vegas Sands Corp. (LVS) and is set to open this summer.

Listing threatened

Shuffle Master Inc. (SHFL) has advised its shareholders that it has received a letter from Nasdaq indicating that the company’s market listing may be delisted since the company failed to file its Form 10-Q by the prescribed timeline of March 12.

It had been previously announced that the company had been advised by its auditors that an accounting error had been found in the quarterly statements for Oct. 31, 2006 and Jan. 31, 2007. The error involved recording of some equipment purchase from a German subsidiary and restatements for the periods involved would be necessary.

Shuffle Master said it planned to request a hearing with the Nasdaq listing panel. Such a hearing would normally be held within 30 days. Any delisting decision would not be made until after the panel’s decision is made public.

Meanwhile, the entire listing problem would be eliminated if the company is able to restate its financial reports for the periods involved.

THE INSIDER: Harrah’s Entertainment Inc. (HET) says its unhappy that Britain plans to place a 50% tax rate on the supercasino in Manchester, England. However, the company said it still plans to bid for the license.

Penn National Gaming Inc. (PENN) says it will close its off-track betting center in Richland Township, Penn., on June 20 because of a slowdown in business.

Four masked robbers, carrying machine guns, stole at least $800,000 from a Brussels, Belgium, casino early Sunday morning.

Landry’s Restaurants Inc. (LNY) advised the SEC that it will restate its financials from 2001 and prior because of improperly recorded stock options.

Lakes Entertainment Inc. (LACO) has received approval from the National Indian Gaming Commission for the amended financial agreement it has with the Shingle Springs Bank of Miwok Indians.

Wachovia gaming analysts have upgraded the share of Isle of Capri Casinos Inc. (ISLE) from market perform to outperform.

The electronic games of skill in play at two racetracks in Arkansas took in nearly $21 million during the month of February, a slight increase over the $19.8 million recorded in January.

The Amelia Belle riverboat casino, owned by Columbia Sussex Corp., has received a waiver from state gaming regulators that will permit the boat to open next month.

Melco PBL Entertainment Ltd. will report its 2006 annual financial results on Friday at 7 a.m. PDT.