International edition
September 20, 2020

The decline in valuations is attributed to concerns regarding the national recession

US: Gaming index backs off recovery

(US).- Valuations within the gaming sector fell back in June after two consecutive monthly increases, according to locally based Applied Analysis, which maintains the Applied Analysis Gaming Index. The Index, which tracks 10 publicly traded gaming-related companies, fell by 7 points to 233.03, a 2.9% decline.

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aming operators contributed to the decline with a 10.2-point drop in value that was partially offset by a 3.2-point pick-up by gaming equipment manufacturers. International Game Technology and Bally Technologies each posted month-to-month gains in their monthly average stock prices, while the balance of the sector, gaming operators, witnessed weakening demand for their stocks.

The decline in valuations is being attributed to concerns regarding the depth and breadth of the national recession as hotels slash room rates to maintain occupancy as visitation and consumer spending indicators remain well of their peaks. “The consumer mix is having an impact on all revenue sources and a disproportionate effect on the margin,” states the report accompanying the index. “The high-profile bankruptcy filing of Fontainebleau Las Vegas, a multi-billion construction project on the Las Vegas Strip, also brought increased attention to the sector and the challenges that exist.”

On the flip side, MGM Mirage auditors stopped questioning the company’s ability to stay afloat amid a heavy debt load, providing a short term boost to that company’s stock price and preventing a larger decline in the Gaming Index, and Las Vegas Sands held a grand opening for its Sands Casino Resort Bethlehem, which officially opened in late May.

Produced and maintained by the local business research and advisory firm Applied Analysis, the index was launched in 1998 with a value of 100. The index hit a record high of 667.09 in October 2007. In December 2007, three new companies were added to the index (Penn National Gaming, Pinnacle Entertainment and Ameristar Casinos) to offset the privatizations of Station Casinos and Harrah’s Entertainment, which caused them to be removed from the Index.

The full list of companies in the AA Gaming Index is as fllows: MGM Mirage, Las Vegas Sands, Wynn Resorts, Boyd Gaming, Penn National Gaming, Pinnacle Entertainment, Ameristar Casinos, International Game Technology, WMS Industries and Bally Technologies.

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