IGCA stock sale runs into Enron backlash

Feb 26, 2002 9:11 AM

In a sudden reversal, state regulators have sent Innovative Gaming Corp. of America back to the drawing board.

The Nevada Gaming Commission, at the company’s request, returned for staff review a planned $5 million public offering. That IGCA stock offering had been approved this month by the Gaming Control Board.

The latest move was prompted by the Securities and Exchange Commission requiring additional disclosure on IGCA’s pending merger with GET Systems of Australia. Also requested were further details on various other financial transactions.

“It looks like there’s going to be a lot more scrutiny in this post-Enron era,’’ explained one observer. “We’ll see a much tighter profile exerted by the SEC and the FTC.’’

In other action, the commission:

”¡ Requested a status report on operations from WMS Gaming. Commissioner Augie Gurrola noted that “computer software anomalies have caused excessive payouts” by some WMS slots. President and CEO Brian Gamache responded that a segment of the company’s systems had been taxed beyond their capabilities but added, “We’ve fixed those issues now.” Software has been changed on 60,000 machines.

”¡ Appointed former Deputy Attorney General Mark Warren to head studies of interactive and Internet gaming. Regulators continue to monitor court decisions and congressional legislation on the subject, and will be meeting with representatives of the U.S. Department of Justice to discuss Nevada’s legal standing with online gaming. “There are a lot of unanswered questions out there,’’ Warren said.

”¡ Approved licensing of Mark Yoseloff, chairman and CEO of Shuffle Master. At the Gaming Control Board meeting, the mathematics Ph.D. predicted corporate revenues of $50 million to $60 million this year.

The Las Vegas-based game maker announced last week that revenues climbed 6 percent to $11.9 million and net income was $2.5 million (unchanged) for the first quarter ending Jan. 31. The company reported strong growth in table game revenue and significant increases in slot revenue compared to the same period a year ago. Total shuffler revenue was down from a year ago and approximately even with the fourth fiscal quarter of 2001.

Shuffle Master’s total installed slot games topped 800 units, up 60 percent over the first quarter of 2001 and total installed table games exceeded 1,300 units, a gain of 22 percent. Recurring revenue increased to $9.9 million, up 18 percent. It marked the 17th consecutive quarterly increase.