The Passed Seven
by Paul Larson (MF Parlay)

MARKET CLOSE          1/28/97       2/3/97
S&P 500:              765.02       786.70 (+2.05%)
NASDAQ:              1354.37      1373.75 (+1.43%)
CBOE Gaming Index:    231.39       230.25 (-0.49%)

Reno, NV (Feb 3, 1997) -- Yes, you've read that byline correctly. This chi-town Fool has headed west to take care of some business and do some Foolish "field research" in the gaming industry. I've talked with more than a few influential folks in the industry this week, and I will relay any substantial information I've acquired via the gaming industry message folder when I have more time.

This week was a relatively slow week in the gaming industry, an especially slow week considering the amount of news we had last week. The big story last week, and maybe of the year, was the Hilton <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HLT)") else Response.Write("(NYSE: HLT)") end if %> hostile bid for ITT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ITT)") else Response.Write("(NYSE: ITT)") end if %>. There have been a great number of prognostications on how this deal will progress including potential poison pill buyouts and counteroffers. Most of these are pure speculation and should be viewed as such.

The only substantial news that has hit the wire thus far was the fact that ITT had a board meeting this week concerning the tender offer and has decided to not take an action. No additional board meetings have been scheduled, but ITT must decide on a course of action before February 14. However, as of now there is nothing to report. No one knows what ITT is thinking and it will be an interesting few weeks as their plans become known.

In an interesting piece of news to hit the wires, Europa Cruises <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KRUZ)") else Response.Write("(Nasdaq: KRUZ)") end if %> announced that they have been paid $400,000 by Hilton for the exclusive right to negotiate a possible joint venture concerning Europa's proposed Diamondhead, Mississippi casino. While the money (about $.02 a share) will not mean much to Europa, just the fact that Hilton is willing to sit down with them can be viewed as a nod of confidence for the company that has been struggling with profitability for the past few years. The interesting piece of news was the fact that the piece of news concerning the joint venture was not exactly kept under wraps. More than a few posts here in the Fool and on the internet had been touting Europa and the upcoming "big news." While the rumors were in fact substantiated this time, it should be noted that caution should still be used when investing in "hot tips" from this forum.

Station Casinos <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STN)") else Response.Write("(NYSE: STN)") end if %> came out with earnings this week. The company report earnings per share of $.20 versus year ago earnings of $.21. While the gross revenues and net income were up versus year ago levels, the company paid a substantial preferred stock dividend that knocked the income per common share to $.20. The company also announced that the first 15 days of operation at its Kansas City unit produced $7.5 million worth of revenue. While the first 15 days certainly have some "honeymoon" attachment to them, the numbers jive with what most here in the Fool have been guessing the company can do at the unit: $14 million a month. In addition, the company announced that they will be opening their new Sunset Station casino in Las Vegas this coming July. While the company has trailing yearly revenues of approximately $418 million, the company should have 1998 revenues north of $650 million.

In this week's news shorts. . . Sodak Gaming <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SODK)") else Response.Write("(Nasdaq: SODK)") end if %> dropped significantly this week to $14 1/4 after investors were spooked but what was said in a conference call the company had. Showboat <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SBO)") else Response.Write("(NYSE: SBO)") end if %> announced they will be managing a Lummi Indian casino near Vancover. Alliance Gaming <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ALLY)") else Response.Write("(Nasdaq: ALLY)") end if %>, owners of the old Ballys slot machine business, reported earnings of $.03 per share. Finally, Acres Gaming <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AGAM)") else Response.Write("(Nasdaq: AGAM)") end if %> completed their long awaited strategic alliance agreement with International Game Technology <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IGT)") else Response.Write("(NYSE: IGT)") end if %>.

That's all from this Fool. Fool on!

Did You Know. . .

That there were no (legal) proposition bets concerning the OJ verdicts were allowed in Nevada? Rumor is the book makers in the state have been deluged with requests for such bets.

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