The Passed Seven by Paul Larson (MF Parlay) MARKET CLOSE 4/3/97 4/10/97 Nasdaq Composite: 1213.76 1235.77 (+1.81%) CBOE Gaming Index: 199.16 201.61 (+1.25%) S&P 500 (SPX): 750.32 758.34 (+1.07%) Chicago, IL (April 10, 1997) -- It's been a relatively quiet week in the markets the past seven days as some of the volatility associated with the fear of rising interest rates seems to have subsided for the moment. Both the Nasdaq and Gaming Index made moves on the high flying S&P 500, but both indexes still trail the SPX by 7% and 10% respectively on the year. In the coming weeks we should see the focus move from speculating Alan Greenspan's every move to a careful eye on earnings releases. While it was a quiet news week, this Fool has been up to his neck studying all the annual reports that have recently been filed with the SEC. I enjoy reading the the 10K's because they provide an in depth glimpse at what is really going on with the companies. You tend to get much more management discussion in the 10K than in any of the other required fillings. We now have company fillings a few clicks away from our new Fool home page on the internet at http://www.fool.com. Type the company's symbol you are interested in researching in the upper left corner, select the "snapshot" option, and direct links to the most recent SEC fillings for the company will be listed near the bottom of the page. A simply awesome feature that I have been using copiously of late. The Nevada Gaming Commission this week announced that gaming revenues for the state rose 5% in February versus February 1996. A total of $634.5 million in gaming revenue was booked in the state in February. The trend of having poorer results in the Lake Tahoe and Laughlin markets while having strong results elsewhere in the state continued. Lake Tahoe has been hit with some exceptionally bad weather this winter and should have more normal year-ago comparisons in the warmer summer months. Results were up across all game types with the exception of craps and sports betting. Without a doubt, the decrease in sports book action is somewhat attributable to the increased availability of sports betting over the interent. There were some strong indicators this week that GRAND CASINOS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GND)") else Response.Write("(NYSE: GND)") end if %> is closer to walking away from the STRATOSPHERE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TOWVQ)") else Response.Write("(Nasdaq: TOWVQ)") end if %> debacle. Grand announced this week that it does not intend to waive the minimum cash flow requirements agreed to in the previous bankruptcy agreement with the Stratosphere debt holders. In order for the agreed to reorganization plan to take effect, Grand requires the average monthly average cash flow at the unit to be above $2.267 million. The current six month average, including March, sits at $1.726 million. There are still a few months left for Stratosphere to make up the deficeit, but results would have to improve dramatically (and quick!). It is unclear exactly what Grand will ask for in return for its proposed (and badly needed) investment in Stratosphere. It is highly likely that Grand will ask for further concessions from the Noteholder Committee at a minimum. In the most extreme case, Grand could walk away from the unit and not invest any further capital into the strugling resort. Since Grand owns $50 million worth of subordinated Stratosphere debt, they will inevitably own a portion of the reorganized Stratosphere. It just remains to be seen if it will be as a majority shareholder and manager or just as a minority shareholder. Wall Street seemed to like the news since Grand's stock has risen from $9 1/4 at the beginning of the month to the current $10 3/8. Given Grand's ugly stock action of the past year, mostly due to concerns about Stratosphere, many investors may be relieved to hear that Grand is taking steps to trim its losses in Las Vegas. The company wrote off its $150 million investment in Stratosphere last quarter and many were worried that any further money put into the unit would also be flushed down the toilet. Grand's perceived increased costs controls likely made many shareholders happy. Holy insider buy, Batman! STATION CASINOS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STN)") else Response.Write("(NYSE: STN)") end if %> announced this week that a group of insiders of the company purchased a combined 283,200 shares between March 31 and April 5. Given the average stock price of about $8 1/4 during that time, that means that the management group bought $2.3 million worth of stock. This is their own personal money that management used to buy their stock. As the old saying goes, insider selling can mean anything, but insider buys mean only one thing -- management thinks the stock is undervalued. Exceptionally slow week on the earnings front. The only company to announce this past week was EUROPA CRUISES <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KRUZ)") else Response.Write("(Nasdaq: KRUZ)") end if %>. Management, which is fighting to retain control of the company from a group of revolting shareholders who are holding a proxy battle, was quick to announce the improved results the company showed in the first quarter. The $0.028 profit reversed a $0.01 per share loss the company booked in the year ago quarter. Revenues at the company also rose 35% versus the first quarter of 1996. ARGOSY GAMING <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AGY)") else Response.Write("(NYSE: AGY)") end if %> announced this week that their application to build a riverboat casino in Osceola, Iowa had been rejected by the state's Racing and Gaming Commission. Argosy's stock continues to flounder in the $3 range since results at all of its casinos, sans the new Lawrenceburg, Indiana unit, are detiorating. It is still unclear if the cash-flow from the Indiana boat will be enough to off-set the red ink the other boats are bleeding onto the income statements. LADY LUCK GAMING <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: LUCK)") else Response.Write("(Nasdaq: LUCK)") end if %> announced the re-opening on April 4 of its Natchez, Mississippi riverboat. The Lady Luck riverboat closed on March 21 due to flooding along the Mississippi that closed their landing facilities. Lady Luck was the hardest hit among the riverboats in the area in the latest round of flooding. Finally, the Missouri Attorney General this week filed suit against INTERACTIVE GAMING AND COMMUNICATIONS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SBET)") else Response.Write("(Nasdaq: SBET)") end if %> this week. The suit alleges the company has been illegally booking bets over the internet by allowing unregulated 24 hour a day sports betting, slots, and virtual table games at its web site. The suit seeks an injunction and fines of up to $1,000 per incident. The Attorney General said, "Internet gambling is the antithesis of the highly regulated and closely supervised limited forms of gambling that are legal in the state of Missouri. These online casinos have no business representing to consumers that this gambling is legal in Missouri." Missouri joins New York on the forefront of stomping out illegal internet gambling that is happening right now. While enforcement of these laws is extremely difficult right now, the states are making strong inroads in making life much more difficult for the dozens of internet gaming companies that have sprouted in the last year. Excessively short earnings summary this week... Europa Cruises (KRUZ) $.03 Good luck! Did you know. . . That the Nevada Mega-Bucks progressive top prize is currently at $11.9 million and rising? When hit it will be the world's largest slot jackpot ever won.

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