AGEM Index

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The AGEM Index increased in November 2012 after declining in the prior month. The composite index was 133.82 by the close of the month, up 5.59 points, or 4.4 percent, since October 2012. The index has now reported month-to-month increases in eight of the past 12 months. In the latest period, 11 of the 17 global gaming operators reported increases in stock price, with four up by more than 10 percent. Of the six companies whose stock prices fell, Wells-Gardner Electronics (WGA) reported the greatest decline of 13 percent.

The broader stock markets did not fare as well during the month, with the Dow Jones Industrial Average (DJIA) reporting a decline, and the S&P 500 and NASDAQ witnessing modest increases. The DJIA ended November at 13,025.58, down 0.5 percent when compared to the end of October. Meanwhile, the S&P 500 reported a slight increase of 0.3 percent, rising from 1,412.16 to 1,416.18. NASDAQ witnessed the greatest increase among the indices during the month, rising 1.1 percent to 3,010.24.

Selected positive contributors to the November 2012 AGEM Index included the following:

• Aristocrat Technologies (ALL) contributed 1.94 points, due to a 15.6 percent increase in stock price to $3.26 (AUD).
• With a stock price of $13.87, up 8 percent, International Game Technology (IGT) contributed 1.91 points.
• Konami (KNM) reported a stock price of $24.20, up 4.8 percent, and contributed 1.07 points.

Selected negative contributors included the following:

• Bally Technologies (BYI) contributed negative 1.15 points, due to a 9.6 percent decline in stock price to $45.14.
• With a stock price of $14.78, down 7.1 percent, Multimedia Games (MGAM) contributed negative 0.19 points.

In addition to voter-approved gaming initiatives in Maryland, Rhode Island and Florida during the latest election, activity in Philadelphia remains heated. In 2004, Pennsylvania legalized commercial casinos. The state law allowed for two casinos in Philadelphia, and in 2006, five operators submitted applications in the hopes of being awarded one of the licenses. SugarHouse Casino opened in 2010, but the second approved casino proposed by Foxwoods had its license revoked after facing delays due to financing and public opposition.

The Pennsylvania Gaming Control Board is now reviewing a new set of applications for the second license. Six operators are in the running, including Wynn PA Inc., Stadium Casino LLC, PA Gaming Ventures LLC, Tower Entertainment LLC, Market East Associates and PHL Local Gaming LLC.

Wynn is proposing a property called Wynn Philadelphia on a 60-acre site on the Delaware River in Fishtown. If approved, the resort-casino will include a 307-room hotel, spa, nightclub, entertainment facility, five-star restaurants, and a casino with 2,500 slot machines and 100 table games.

Stadium Casino LLC is a joint venture between Cordish Cos., developer of Maryland Live at Arundel Mills, and Greenwood Gaming and Entertainment Inc. The company is hoping to develop a property in the Stadium District. The project would include a 220-room hotel, 2,013 slot machines and 125 table games.

Penn National is also planning a property in the Stadium District called Hollywood Casino Philadelphia. The company partnered with the City of Philadelphia under the name PA Gaming Ventures LLC. If approved, the property will include a multi-level gaming area with 2,250 slot machines and 81 table games. Penn National will control one-third of the equity, while the remainder will go into the city’s school district and pension fund.

Tower Entertainment LLC, founded by developer Bart Blatstein, would develop The Provence on North Broad Street. The property, which would be operated by Hard Rock International, would include a 125-room hotel, 3,300 electronic games and 150 table games.

Market East Associates submitted an application for Casino Philadelphia at 8th and Market Street, which would include 2,630 slot machines and 106 table games.

PHL Local Gaming LLC is planning Casino Revolution at 3333 South Front Street, which would include 2,000 slot machines and 85 table games.

The Pennsylvania Gaming Control Board expects it will take at least a year until a decision is made, but interest for new projects remains high in the Keystone State.

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