AGEM Index

The Association of Gaming Equipment Manufacturers (AGEM) produces the monthly AGEM Index, which is comprised of 16 global gaming suppliers throughout the world. A total of 12 suppliers are based in the United States and are listed on the NYSE, Nasdaq or AMEX, while two trade on the Australian exchange, one supplier trades on the Milan exchange and another trades on the Taiwan OTC exchange. The index is computer based on the month-end stock price (adjusted for dividends and splits) of each company and weighted based on approximation of market capitalization. Market capitalizations for manufacturers trading on foreign exchanges have been converted to U.S. dollar-equivalents as of month-end for comparability purposes. The AGEM Index is based on a 100-point value as of January 2005.

Union Gaming Group Analysis
Gaming suppliers’ market performance is correlated with macro data and broader markets. July was an important step in the recovery of the markets, particularly for the consumer discretionary stocks—such as casino operators, which gaming equipment stocks typically key off of. The S&P 500 crossed 1,000 for the first time since the fall of Lehman Brothers. The equipment stocks all made new highs on excitement surrounding broader market earnings reports and better relative news from IGT. Sector-specific events also bolstered the group as Ohio, Illinois and Delaware looked likely to execute on proposed gaming expansion.

One by one, casino operators from the U.S. to Asia suggested stability in their businesses, providing for additional confidence. Early signs of capital expenditure recovery surfaced, suggesting the worst of the storm has blown by. Most of the macro data released during the month still looked weak, especially jobless claims and housing starts, but summer bulls were able to prevail as the rate of change also suggested the worst was in the rearview mirror. While there will continue to be conflicting signals surrounding recovery, July 2009 may have marked the beginning of the new bull market. Earnings reports in August will be important pieces to the market puzzle, and whether or not the bulls may continue their summer run or the bears will take back the market they have dominated since July of 2007.

About AGEM
AGEM is an international trade association representing manufacturers of electronic gaming devices, systems and components for the gaming industry. The association works to further the interests of gaming equipment manufacturers throughout the world. Through political action, tradeshow partnerships, information discrimination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM and its member organizations have assisted regulatory commissions and participated in the legislative process to solve problems and create a positive business environment.

AGEM Index and Overview
The AGEM Index and overview is prepared by Applied Analysis (AA). AA is a Nevada-based advisory services firm providing a wide range of consultation services for public and private entities. The company utilizes extensive experience in economics, information technology and finance to provide a wide range of services, including urban economic consulting, financial advisory services, market analysis, public policy analysis, hospitality industry and gaming consulting, and information system and technology consulting.

Industry Analysis
Industry analysis is prepared by Union Gaming Group (UGG). UGG is an independent research firm, government and industry advisor, focusing on the global gaming business. UGG provides research, access and advisory services and offers varying levels of research and product services, which capitalize on UGG’s relationships with corporate managements, governments and other parties relevant to the global gaming business.

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