Foreign deals help both IGT, Scientific Games

May 8, 2007 8:34 AM

Manufacturers and systems providers got a boost last week when two major companies reported going beyond the U.S. to enhance their businesses.

International Game Technology (IGT) said it had entered into a strategic alliance with China LotSynergy Holdings Ltd. that investors believed would open the door for the Reno, Nev., based company to enter China’s vast video lottery machine business.

Scientific Games Corporation (SGMS), that was essentially a provider of racetrack and lottery equipment before merging with a lottery instant ticket printer, announced that it had been chosen by Churchill Downs Inc. (CHDN) and its partners in TwinSpires to provide an Internet wagering platform, telephone betting technology and associated tote services for the new advance deposit wagering service that was launched last week.

Also, Scientific Games said it signed a contract to upgrade Australia’s Golden Casket’s existing lottery system and hardware, a project that is expected to be worth over $14 million over the next five years.

Lorne Weil, chairman and CEO of Scientific Games, said his company will deliver 1,300 full-function lottery terminals, 400 instant-only terminals and upgraded terminal software to the Queensland lottery system.

As for TwinSpires, Weil said, the newly-launched advanced wagering system uses the Scientific Games Racing TrackPlay wagering system and its date flows through the company’s Quantum Data Centers.

"With almost 90 percent of racing handle now being wagered off-track," Weil commented, "much of the future growth of racing lies in the application if Internet wagering tools."

Following the announcements, SGMS shares moved up in trading from the mid-$30 level to a closing on Friday of $37.58 per share.

Shares of IGT also were favorably impacted by the China alliance, moving from the $38 level early in the week to Friday’s closing of $40.79 per share.

Landry’s outbid?

Smith & Wollensky Restaurant Group Inc. (SWRG) announced on Monday that its merger partner, Patina Restaurant Group LLC has raised its buyout offer to $11 a share, a bid that tops the $9.75 per share offered by Landry’s Restaurants Inc. (LNY).

This new offer from Patina values the company at $95 million or about $11 million more than its previous offer.

Landry’s made the initial move toward Smith & Wollensky with an offer of $7.50 per share, a 50% jump from its recent trading price of $5 per share. Patina countered with $9.25 per share, a bid that was accepted by SWRG.

Not satisfied, Landry’s added credibility to its offer by moving up to $9.75 per share.

Analysts said Monday they did not expect Landry’s Restaurants, owner of the Golden Nugget Hotel Resort in downtown Las Vegas, to continue bidding.

Lawsuit filed

Gaming opponents have filed a lawsuit in West Virginia seeking to block the state’s four racetracks from adding poker, blackjack and other table games to their gambling menus.

Under a bill passed by the West Virginia legislature, the West Virginia Lottery Commission is empowered to permit the state’s racetracks to install table games as an added feature to the slot machines they have been operating for a half-dozen years.

The West Virginia Family Foundation charges that the law is unconstitutional on several grounds, including the fact that table games weren’t envisioned under the 1984 constitutional amendment that established a state lottery.

The track operators said the lawsuit was not unexpected since such suits are commonly filed when gambling or its expansion are considered.

Affected are the two publicly-traded gaming companies, MTR Group Gaming Inc. (MTNG) and Penn National Gaming Inc. (PENN).

Annual meeting

Shareholders of Bally Technologies Inc. (BYI) met at their annual meeting on Thursday and re-elected David Robbins to the company’s board of directors for a three-year term.

They also ratified the selection of Deloitte & Touche LLP as the company’s independent public accountants for fiscal 2007.

During the discussion, the company indicated that it expects to file the 10-Q quarterly forms for Sept. 30, 2006, and Dec. 2006, sometime in late May or early June. They also plan to file the quarterly form for May 31, 2007 "on a timely basis."

He’s back

Max Baer, Jr., who is still remembered as having played the character "Jethro" in "The Beverly Hillbillies" weekly sitcom during the 1960/s, has failed in two previous attempts to build a casino in northern Nevada.

But that hasn’t stopped him from trying.

His previous attempts were in Lake Tahoe and in Reno so now his plans are for a casino complex in his home area of Douglas County.

"I’ve lived in Douglas County since 1978," he was quoted as saying, "and I’ve wanted to build this casino for a long time."

With several business partners, Baer is hoping to locate a casino near U.S. 395, across from the Carson Valley Plaza. It will be called the Jethro Bodines Beverly Hillbillies Mansion & Casino.