States’ slots-mania seen benefiting major manufacturers

Jul 14, 2009 5:07 PM
Industry Insider by Ray Poirier | With states such as Ohio, New York and Massachusetts looking to meet budget shortfalls by expanding gambling, investors have been taking a closer look at gaming companies, especially the manufacturing companies.

Looking to benefit from the expansion of slots activities are International Game Technology (IGT), Bally Technologies Inc. (BYI), and WMS Industries Inc. (WMS).

The weekend announcement that Ohio Gov. Ted Strickland will authorize racetrack slots by executive order caused boosts in the trading prices of the manufacturers as well as Penn National Gaming Inc. (PENN) and MTR Gaming Group Inc. (MNTG), two companies that own racetracks in Ohio.

Also, Penn National is sponsoring a November referendum that would authorize the licensing of four casinos in Ohio.

Strickland, an ardent foe of racinos, quickly changed his position when faced with a huge budget shortfall. After meeting with Senate leaders he agreed to the executive order to end a budget compromise stalemate.

In writing its two-year $54 billion budget, the Senate will clarify state gambling laws by allowing the lottery to include slots-like video lottery terminals in its jurisdiction.

New York’s efforts to name an operator for a slots facility at Aqueduct racetrack were compromised last month when a political gambit left the state Senate with a 31-31 political tie. For several weeks, no lawmaking took place because of the deadlock.

After resolving the problem last week, officials said one of the first moves will be to select one of six applicants seeking the Aqueduct license. The facility, to be operated under the direction of the state lottery, will have 4,500 video lottery terminals.

Massachusetts officials have already indicated that they plan to take up the casino proposal, and or, the matter of racetrack slots, after the summer recess. Gov. Deval Patrick has proposed no more than four casino licenses while the state’s four racetracks are petitioning for video lottery terminals.

Two of the tracks, the greyhound racing facilities at Charlie Sarkis’ Wonderland in Revere and George Carney’s Raynham, are scheduled to close since the state’s voters have approved the banning of dog racing in the state.

Question? Comment? E-mail me at: Ray Poirier