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Court ruling lifts lid on Indians’
use of Class II machines

Mar 2, 2004 4:53 AM

A U.S. Supreme Court ruling relative to Indian casino use of Class II gaming machines sent the shares of slots manufacturers skyrocketing on Monday. Showing major increases were International Game Technology (IGT), Alliance Gaming Corp. (AGI), Multimedia Games Inc. (MGAM), as well as others.

The court rejected the federal government’s appeal seeking to overturn two appellate rulings that permitted Indian casinos to use the machines, often referred to as pull tab machines.

A number of Indian casinos had delayed purchasing additional Class II machines after the U.S. Justice Dept. appealed recent rulings from four U.S. Circuit Courts of Appeal. Some analysts have estimated that the Supreme Court ruling could mean the sale of as many as 100,000 additional Class II machines throughout the country, especially in such jurisdictions as Oklahoma and California.

When trading ended on Wall Street Monday, IGT shares were at $41.54, up $2.30; AGI was at $27.00, up $2.74, and MGAM was at $22.38, up $1.38.

THE INSIDER: American Wagering Inc. (BETM), the corporate parent of Leroy’s Horse and Sports Place, has submitted a plan to emerge from Chapter 11, the federal bankruptcy protection it entered last July. The company plans to pay court judgments to Las Vegas Gaming and Michael Racusin, the principal reasons it filed for bankruptcy.

Barrick Gaming Corp. says it has succeeded in putting together the $82 million financing it needs to acquire four Downtown Las Vegas casinos from Jackie Gaughan. The company expects to present its acquisition plans before the Nevada Gaming Control Board on March 3.

GTECH Holdings Corp. (GTK) and Hasbro Properties Group have agreed to license GTECH to develop and distribute select lottery products featuring Hasbro’s MONOPOLY and BATTLESHIP brands in the U.S., Canada and Mexico.

Analysts at Roth Capital have dropped their ratings on Shuffle Master Inc. (SHFL) from buy to neutral

The Detroit City Council has voted to withdraw its objection to a deal to settle an Indian lawsuit against two Detroit casinos, thus permitting the casinos to go forward with permanent casino construction.

Pinnacle Entertainment has closed on the sale of 37 acres of land in Inglewood, Cal., for $22.2 million. The buyer was identified as Watt Developers LLC, a regional homebuilder located in southern California.

The Maryland Senate is expected to vote this week on legislation that would permit 15,500 slot machines at six locations including three racetracks.

A bill has been filed in the Kentucky legislature that would permit as many as nine casino licenses in the state.

Station Casinos Inc. (STN) has reduced its interest payments by selling $350 million of 6 7/8% senior subordinated notes to redeem their 8 78% subordinated notes.

Gaming analysts at Jefferies & Co. have raised their ratings on Shuffle Master Inc. (SHFL) from hold to buy.

Standard & Poor’s Rating Services has affirmed the debt ratings of Pinnacle Entertainment Inc. (PNK).

Mikohn Gaming Corp. (MIKN) says it has entered an agreement with DEQ Systems Corp. of Quebec, Canada, to offer a promotional side bet system on table games to its customers.

Mandalay Resort Group (MBG) will hold a fourth quarter earnings conference call at l:30 p.m. PST on Thursday, March 4.

Lakes Entertainment Inc. (LACO) is planning to raise $20 million through an initial public offering of World Poker Tour.

New York State Racing and Wagering Board has refused to renew the harness racing license for Vernon Downs, a property owned by Las Vegan Shawn Scott. Without a racing license, the property can’t install and operate video lottery machines.

Penn National Gaming Inc. (PENN) has warned Maine officials that reducing the company’s take from slot machines at Bangor Raceway to 61% would jeopardize the $30 million investment the company had planned for the track. The previous law approved by referendum would have given the company 75% of the machine revenues.

A dispute over the issuance of complimentary food and hotel accommodations has caused a stalemate in negotiations between New Mexico state officials and the operators of nine Indian casinos on new gaming compacts.

New Jersey racetracks won’t be permitted to install slot machines, in competition with Atlantic City casinos, but under a plan soon to be adopted the casinos will pay about $20 million annually to subsidize the purses at the horse tracks.

Iowa lawmakers have voted to permit racetracks to add table games to their slots operations but chose to ban new gambling licenses.

Cash Systems Inc. (CKN) says it has negotiated contracts with an additional half-dozen locations for the installation of cash advance services.