AGEM releases March 2013 Index

The index reached its highest level since early 2008. The majority (13 of 17) of global gaming operators reported increases in stock price when compared to February of this year. Those reporting negative stock performances included Global Cash Access (GCA), Aristocrat Technologies, Scientific Games Corporation and Intralot. 

The broader stock markets reported similar month-to-month increases in March of 2013, with all three up by over 3 %, as valuations climbed to new heights. NASDAQ finished the month at 3,267.52, up 3.4 % from February. The S&P 500 and Dow Jones Industrial Average (DJIA) witnessed the greatest increases, with the S&P 500 rising 3.6 % to 1,569.19 and the DJIA increasing 3.7 % to 14,578.54. 

Selected positive contributors to the March 2013 AGEM Index included the following: 

-Bally Technologies contributed 1.27 points, due to an 8.8-% increase in stock price to a month-end value of us$ 51.97. 

-With a stock price of us$ 16.50 (up 3.5 %) IGT contributed 1.02 points. 

-Lottomatica reported a 3.7-% increase in stock price to 18.33 euros and contributed 1.00 point. 

Selected negative contributors included the following: 

-Intralot reported a 20.8-% decline in stock price to 1.83 euros and contributed negative 0.53 points. 

-With a stock price of us$ 8.75, down 2.8 %, Scientific Games contributed negative 0.14 points to the index. 

The resort industry in Las Vegas continues to move through the recovery cycle, but in recent months, investments in properties located both on the Strip and Downtown have gained global attention. While the majority of new capital is currently being spent on renovations of existing hotels, there are new resort-casinos on the horizon that could be a meaningful step forward for Nevada and gaming equipment manufacturers in general. 

The north end of the Las Vegas Strip is facing a makeover in the coming years with the renovation of the former Sahara and acquisition of the former Echelon site for a new project. In February, construction began on SLS Las Vegas with completion expected in fall of 2014. SBE Entertainment plans to spend us$ 750 million on the resort, which is expected to create 1,600 construction jobs and 2,500 permanent jobs. The resort will include over 1,300 rooms, 4 night clubs, 12 restaurants, 696 sqm of retail and a 6,131-sqm casino floor that will include 860 slot machines and 112 table games. The project recently obtained the final piece of its financing package and development activity appears to be moving forward. 

Genting Group recently purchased the 87-acre stalled Echelon site from Boyd Gaming for us$ 350 million with plans to build a us$ 2-us$7 billion resort called Resorts World Las Vegas. The property is expected to begin con struction in 2014 and will be the first major resort casino since the Cosmopolitan opened in December of 2010. When it opens in 2016, Phase 1 is expected to total 743,224 sqm, with 3,500 rooms, 210,000 square feet of dining, 250,000 square feet of retail space, 46,451 sqm of convention space and an indoor water park. Casino space will comprise approximately 16,258 sqm, providing an opportunity to global gaming suppliers. The new resort is expected to be a major boost for the Las Vegas economy, creating thousands of construction and permanent jobs. 

Other investments include Caesars Entertainment's us$ 185-million renovation and rebranding of Bill's Gamblin' Hall into the Gansevoort Las Vegas (2014). The project is expected to include 1,000 employees, 188 guest rooms and a rooftop club and pool. The casino floor will be approximately 3,716 sqm. 

Downtown is also benefitting from recent investments. Lady Luck is currently being transformed into the Downtown Grand, a us$ 100-million renovation that will include 650 guest rooms and a 3,251 sqm casino housing 30 table games and 700 slot machines. It is estimated the renovation will create 500 construction and 600 permanent jobs. New developments - in Nevada and globally - are providing increased revenue expansion opportunities for gaming suppliers.