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Atlantic City Casinos' Finances an Open Book

25 March 2002

ATLANTIC CITY, New Jersey – As reported by the Press of Atlantic City: "The Securities and Exchange Commission is calling for greater corporate disclosure. The U.S. House Financial Services Committee is considering the Corporate and Auditing Accountability, Responsibility and Transparency Act. A Big Five accounting firm is under indictment for obstruction of justice.

"Amid mounting pressure for greater accountability among corporations, the casino industry might stand tall by comparison to others, according to industry experts.

"`Investors seeking out simple business models with straightforward financial statements may want to revisit casino stocks,' Merrill Lynch analysts David Anders and Salvatore Di Pietro said.

"`In our opinion, if accounting standards tighten, casino companies' results will likely be unaffected. In fact, to the degree that other industries are negatively affected by tighter accounting standards, we believe the relative growth rates and returns on assets for casino companies will look even more compelling,' the analysts said.

"…State regulatory schemes that casino operators consider onerous may now, more than ever, be vital in ensuring investor confidence.

"…Investors with interests in Atlantic City gaming houses can find out how much money a casino won in a certain month, how much money gamblers inserted into a casino's dollar slot machines in a month or how many free drinks a casino dispensed in a quarter.

"No other casino state offers that much disclosure, but most offer at least monthly revenue breakdowns that can't be found in other industries.

"…William Eadington, a University of Nevada-Reno economics professor who directs the school's Institute for the Study of Gambling and Commercial Gaming, said the regulatory schemes have always been designed with financial integrity in mind…"

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