AGEM Index

In the final month of 2014, the AGEM Index reported a composite value of 181.84. The December 2014 index represents a decline of 3.74 points (-2 percent) when compared with November 2014. Compared with a year ago, the AGEM Index declined 12.11 points (-6.2 percent). The index reported monthly declines for four consecutive months and was down for nine of the past 12 months. In December, Global Cash Access (GCA) completed its acquisition of Multimedia Games Corporation, removing Multimedia Games from the overall index.

During the latest period, eight of the 14 global gaming equipment suppliers reported month-to-month gains in stock price, with one reporting a gain of more than 5 percent. Of the six companies reporting a month-to-month decline in stock price, two were down by more than 5 percent.

The broader stock markets also reported a downturn in December 2014 when compared with the prior month. The Dow Jones Industrial Average declined modestly, falling from 17,828.24 to 17,823.07. The S&P 500 ended the month at 2,058.90, representing a decline of 0.4 percent, while NASDAQ witnessed a 1.2 percent decline to 4,736.05.

Selected positive contributors to the December 2014 AGEM Index included the following:
• International Game Technology (IGT) reported a stock price of $17.25 (+1.3 percent) and contributed 0.50 points.
• Daktronics (DAKT) contributed 0.24 points due to a 4.9 percent gain in stock price to $12.51.
• The biggest stock price gainer, Ainsworth Game Technology (AGI), jumped 5.4 percent. Due to exchange rate fluctuations, the supplier contributed 0.04 points to the overall index.

Selected negative contributors included the following:
• Scientific Games Corporation (SGMS) reported a stock price of $12.73 (-15.9 percent) and contributed negative 1.54 points.
• Aristocrat Technologies (ALL) reported a 0.8 percent increase in stock price to AU$6.56. However, due to a decline in exchange rate, the company contributed negative 1.10 points to the index.

Gaming expansion continues in the state of New York. In November 2013, voters in the Empire State approved a constitutional amendment to expand casino gambling. As a result, New York state, which has nine racetracks with video lottery terminals and five tribal casinos, will eventually add up to seven commercial casinos. However, only four casinos will be allowed initially, and all of them will be located in upstate New York.

The New York State Gaming Facility Location Board recently awarded licenses to three operators, including Montreign Resort and Casino, Rivers Casino and Resort and Lago Resort Casino. Another 13 proposals were rejected by the review board, including plans from Caesars Entertainment to build an $880 million casino in Orange County and Genting’s proposal for a $1.5 billion development in Sterling Forest.

Montreign Resort and Casino will be located in Thompson in the Catskills. The $1.1 billion project will include an 18-story resort with 391 hotel rooms and an 86,300 square-foot casino with 61 table games and 2,150 slot machines. The property is also expected to include an 80,000 square-foot indoor water park, a golf course and a 200,000 square-foot entertainment village.

Rivers Casino and Resort will be built in Schenectady County. The project will cost an estimated $300 million and will include a 150-room hotel and a 50,000 square-foot gaming floor. The casino will include 66 table games as well as 1,150 slot machines.

Lago Resort and Casino will be located in Seneca County. The $425 million project will include a 94,000 square-foot casino with 2,000 slot machines and 85 table games. In addition, the development will include 207 hotel rooms, a 40,000 square-foot pool area and a 10,000 square-foot spa.

In addition to the three commercial casinos soon to be underway, the Oneida Indian nation is planning to open a $20 million casino in Chittenango, which is 60 miles from the planned Lago Resort and Casino in Seneca County. The 67,000 square-foot development is expected to open in the spring of 2015 and will include 430 slot machines, a 500-seat bingo hall, dining, a country-western bar and a general store.

As casino gambling in the state of New York continues to expand, global gaming equipment suppliers are keeping a close eye on opportunities in the region.

However, concerns regarding the supply-demand balance in the region persist.

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