AGEM index declined slightly in April

April's performance can be attributed to five of the 16 global gaming suppliers witnessing declines in stock price during the month, with two falling more than 10 percent. Of the 11 suppliers that witnessed positive growth in their month-to-month stock price, compared to 14 last month, only one reported an increase greater than 10 percent. Ainsworth Game Technology (AGI) posted an 11.25-percent jump as it continues to consider a public offering.

For comparison purposes, the broader stock markets witnessed slight declines in April. The Dow Jones Industrial Average closed the month at 13,214, representing little change (+0.01 percent) since the end of March. The NASDAQ ended the month at 3,046. Although it reported closing prices above 3,000 for the majority of the month, it declined 1.5 percent since the end of March. Meanwhile, the S&P 500 closed the month at 1,398, down 0.7 percent when compared to a month ago. Other indicators, such as employment, personal income and consumer confidence are showing signs of improvement as recovery continues.

Positive contributors to the index during April 2012 included: Bally Technologies contributed 0.52 points to the index, with a 3.85-percent increase in its stock price to us$ 48.55. With a stock price of us$ 29.03 at month's end, Konami contributed 0.47 points to the index.

Selected negative contributors to the index included: IGT contributed negative 2.15 points to the index, with a decline in stock price of 7.21 percent. Scientific Games had a stock price of us$ 10.16 at the end of the month, down 12.86 percent and resulting in a negative contribution of 0.78 points.

Agendas, talking points and Political Action Committees are not only reserved for campaign staff. As the United States Presidential election gears up for the summer campaign season, many states are also seeking ballot initiatives to be brought to the voters in November. This is a fertile time to put gambling measures in front of voters and several initiatives being pushed forward can have significant implications for both gaming operators and global gaming suppliers.

Like clockwork in Nevada, raising taxes on gambling, which is currently capped at 6.75 percent of gross gaming win, was back on the table this month as a local businessman wanted to force casino operators to pay upwards of 9 percent in taxes through a ballot initiative. While earlier efforts have been dismissed by the courts, speculation of a new petition looms, but publicly the initiative has been dropped. The latest efforts may have dissolved but such initiatives may cause casinos and their operators to remain cautious with regard to their investments in their human resources and capital expenditure requirements, including purchasing replacement gaming products.

In the late stages of a budget session in Maryland, lawmakers tried to adjust their net cash flows by raising revenue after us$ 512 million in cuts were enacted in the prior session. Retracting budget cuts with additional revenue was never finalized. However, a representative from Prince George County, which borders the northeast and southeast quadrants of the District of Columbia, is using this angle to get a gambling bill passed so the referendum can go before voters in November. What could potentially be the sixth casino in Maryland, would also be on steps away from the nation's capital and potentially compete with the Arundel Mills casino opening in June between the District and Baltimore.

A group in Michigan is once again working on a constitutional amendment to permit the development of eight additional casinos in select regions around the state. In April, petition language for the amendment was approved by the Michigan Board of Canvassers, moving the process of collecting more than 322,000 signatures by July 9th forward. It is important to note that a similar measure was filed in 2010 but failed to gather sufficient signatures to qualify for the statewide ballot.

In November, Rhode Island voters and residents of Newport will get the chance to approve a bill signed by the Governor allowing table games at Newport Grand. Currently, casino patrons can only play video slots. 

These measures, and what will likely be a few more, especially in Massachusetts where voter referendums in communities near potential casino sites need to be approved, will continue to lift the tide of global gaming suppliers as demand for additional product rises.