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Bear Stearns Re-initiates Coverage

24 November 2003

CHICAGO, Illinois – As reported by CBS MarketWatch: "Filling a hole left with the departure of a perennially top-ranked analyst earlier this year, Bear Stearns re-initiated coverage of the gambling industry Friday with a sector rating of `market weight' and a `preference for equipment over operators.'

"Mark Abramson, replacing Jason Ader who left in February, rolled out his ratings on a total of 16 companies -- 12 casino chains and four equipment makers.

"Although the brokerage continues to favor an `overweight' position in cyclicals, gambling gets the lower rating as the `income elasticity of demand ... is at the lower end of the spectrum of the consumer discretionary category,' he wrote in a note to investors. `Put simply, we expect only modest acceleration in the rate of growth in spending on gaming as an economic recovery gains traction and household income and employment rise.'

"…Rising competition, particularly from `Indian' casinos could hurt public operators by forcing them to spend more on marketing, Abramson added, and Las Vegas will soon have to absorb several huge new casinos after a period of relatively slow supply growth…"

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