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Caesars Entertainment leads gains in casino share prices

2 April 2013

LAS VEGAS -- Shares of Caesars Entertainment Inc. posted strong gains in March, adding to increases in the previous month.

The casino giant saw its average daily stock price increase more than 39 percent during the month, after February’s 46 percent jump.

Brian Gordon — a principal with Las Vegas-based financial adviser Applied Analysis, which charts the monthly stock performance of eight publicly traded casino operators and four gaming equipment manufacturers for a gaming index — said Monday that Caesars continues to benefit from a hope that legalized Internet gaming could be on the horizon.

Caesars, which operates 10 resorts on or near the Strip and four casinos in Atlantic City, owns the World Series of Poker brand. New Jersey and Nevada are in various stages of legalizing forms of Internet gaming within the respective state’s boundaries.

In March, Nevada gaming regulators licensed European Internet gaming giant 888 Holdings for an interactive license. The company is a partner with Caesars in operating World Series of Poker websites in legal Internet gaming markets in Europe.

The companies plan to launch legal Internet gaming websites under the World Series of Poker brand in legal U.S. markets.

Half of the casino operators charted by Applied Analysis experienced upticks in their average daily stock prices during the month, led by a 7 percent increase in shares of Boyd Gaming Corp. and a 4 percent jump by M Resort owner Penn National Gaming.

Boyd Gaming sold its 87-acre Echelon site to Malaysia-based casino giant Genting Group in early March for $350 million. The sale was viewed as a positive move for Boyd.

“Penn National also posted a positive stock performance, potentially benefiting from its pending conversion into a real estate holding company and operator entity,” Gordon said in a report to the firm’s clients.

The Applied Analysis Gaming Index increased by 0.2 percent to 458.9 in March, largely a result of average daily stock price increases by all four gaming equipment manufacturers listed in the index.

Janney Montgomery Scott gaming analyst Brian McGill on Monday predicted potentially profitable months ahead for the largest slot machine makers.

McGill said he met with company representatives last week at the National Indian Gaming Association Conference in Phoenix and came away convinced that sales of video lottery terminals to both the Illinois and the Canadian lottery markets will be better than many expect.

“We continue to believe that shipment trends are going to come in ahead of expectations during the March quarter for both (International Game Technology) and Bally (Technologies),” McGill told investors.

His general view is that replacement sales of slot machines will improve this year to 60,000 or more games, up from 55,000 in 2012.

“Even if we were to be high in our market estimate, we are still confident in shipment estimates for both IGT and Bally,” McGill said.
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