Company’s future grows cloudier

Is the death watch on for Progressive Gaming International Corp.?

The Las Vegas-based gaming technology provider has to post a $20 million bond while it appeals a $39 million judgment in a federal antitrust case. Last week, Progressive said it had an operating loss of $1.5 million in the third quarter.

Goldman Sachs gaming analyst Steve Kent isn't sure what the future holds for Progressive.

"It is still unclear to us how management intends to maintain their capital structure after this ruling given that $45 million of debt needs to be repaid by August 2008," Kent said. "There are options for Progressive and (the) company generally requires minimal cash to operate. That said, we are concerned this could shift management focus."

How did Thursday's downfall in the per share price of Las Vegas Sands Corp. stock affect the holdings of company Chairman Sheldon Adelson, who controls roughly 248 million shares, about 70 percent of the casino operator? Based on a $7.78 decrease in regular trading, and a $19 drop in after-hours trading, the value of Adelson's holdings dropped about $6.6 billion.

International Game Technology is proceeding with development of server-based gaming systems, where customers and casinos can tailor their slot machine products.

IGT Chairman TJ Matthews said the company plans to display a new version of sever-based gaming at the upcoming Global Gaming Expo. Matthews is hopeful field testing of the product will take place by year's end in five locations, including two casinos in Nevada. Analysts tout server-based gaming as the next wave in the slot machine replacement cycle.

"IGT is now in a position that when revenues start to accelerate, they will flow through to the bottom line much quicker than in the past," Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski said. "There are still many investors waiting on the sidelines due to doubt surrounding the server-based gaming story."

Speaking of slot machine makers, Wachovia Capital Markets gaming analyst Brian McGill said potential legislative action in Maryland could provide the entry vehicle for 15,000 slot machines, adding to the possibilities of 22,500 new machines in California, 15,000 in Florida, 12,000 in Kansas and 15,000 in Illinois.

"If these new and existing markets do expand gaming, it should help to drive earnings per share for the equipment manufacturers for the next two to four years," McGill said.

The Inside Gaming column is compiled by Review-Journal gaming and tourism writers Howard Stutz, Benjamin Spillman and Arnold M. Knightly. Send your tips about the gaming and tourism industry to insidegaming@review journal.com.