Fortunes looking up for slot makers

New jurisdictions and the loosening of casino wallets are giving Wall Street reasons to take a second look at the slot machine industry.

The primary beneficiary is Reno-based International Game Technology.

JPMorgan gaming analyst Joe Greff upgraded his view of the company last week, crediting new Chief Executive Officer Patti Hart and her management team with strengthening the company's balance sheet, adding liquidity, and reducing operating expenses.

"Investors should be focused on unmodeled earnings-per-share upside over the next two years related to a pickup in domestic replacements and opportunities in newer domestic and international markets," Greff said in a research note.

While states such as Illinois and Ohio may add slots, casino operators are finally looking at spending money to upgrade their slot machine floors.

"Our slot industry contacts indicate there will be some, as opposed to nearly zero, slot capital expenditure budgets for next year," Greff said.

With newer slot machines as the primary catalyst, IGT should benefit and maintain its industry-leading market share, Greff said.

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Red Rock Resort will replace its deli with a branch of The Bagel Cafe, the popular New York-style eatery. The location, which opens in mid-September, will be near Red Rock's race and sports book as well as the poker room.

The Bagel Cafe, which has operated since 1996 at its founding location North Buffalo Drive near Summerlin Parkway, plans to run a full menu of sandwiches, salads, knishes, matzo-ball soup and breakfast items at Red Rock.

The site will also offer a carryout deli and dessert-counter service with items baked at the locale

One question: Will the aroma of fresh-baked bagels and cakes distract poker players and sports bettors?

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The Association of Gaming Equipment Manufacturers added its 81st member when Intralot, an Athens, Greece-based systems provider, joined the trade organization.

Some credit goes to former slot maker spokesman Marcus Prater, the association's executive director, who took over day-to-day operations in March 2008 when the group had 32 members.

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Former gaming analyst Eric Hausler will join Isle of Capri Casinos next month as senior vice president of strategic initiatives. He'll help the St. Louis-based casino operator evaluate acquisition and management opportunities and coordinate with the investment community.

Hausler held a similar role with Trump Entertainment. Before joining the gaming industry, Hausler was an analyst at Bear Stearns and Susquehanna International.

Howard Stutz's Inside Gaming column appears Sundays. E-mail him at hstutz@reviewjournal.com or call 702-477-3871. He blogs at lvrj.com/blogs/stutz.