The Passed Seven
by Paul Larson (TMF Parlay)

MARKET CLOSE             5/30/97  6/6/97
S&P 500 (SPX):           848.28   858.01 (+1.15%)
Nasdaq Composite:       1400.32  1404.84 (+0.32%)
CBOE Gaming Index (GAX): 215.19   213.84 (-0.63%)

Chicago, IL (June 6, 1997) -- For the third week in a row we saw the bull market dash forward while the Chicago Board Options Exchange Gaming Index (GAX) ran the other direction. I've often jokingly called myself a broken record in the past, and this week is no different. It is scary to think that a year ago the GAX was sitting at 327.31, or a full 53% higher than where it stands today. A true eye-popper of a downward move for an index if you ask me.

GAX index component PRIMADONNA <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: PRMA)") else Response.Write("(Nasdaq: PRMA)") end if %> was in the news again recently, but this time for a much more grim reason. Almost two weeks ago, a 7-year-old girl was raped and killed in the washroom at one of the company's Primm, Nevada casinos. The girl was left unattended near the casino while her father was nearby drinking and playing craps. The suspects were seen following the girl into the washroom by the casino security cameras and will likely be prosecuted. Nevertheless, some have wondered about Primadonna's liability in the case since the casino knew the girl was wandering around unattended and yet continued to pour the girl's father free drinks. Common sense says the father should be slapped, but common sense and the law are often like oil and water. It took a couple of days for the news to affect the stock, but Primadonna dropped from $22 on Monday to $19 on Thursday before rebounding on Friday to $19 5/8.

Some view this piece of news as a validation of NEW HORIZON KIDS QUEST's <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: KIDQ)") else Response.Write("(Nasdaq: KIDQ)") end if %> business model. The company specializes in putting childcare facilities in casinos to prevent exactly this kind of thing from happening. Where in the past many casinos may have thought the childcare facilities were a nice amenity to offer their patrons, they may be thinking of them as more a liability prevention now. In other words, childcare may have gone from being an option to a necessity in the casino industry. It was also announced this week that Kid's Quest received a contract to install an additional five facilities for STATION CASINOS <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STN)") else Response.Write("(NYSE: STN)") end if %> around the country. I'm almost certain the Primm incident acted as a catalyst for this contract.

Whoops, I made a mistake...

When speaking of INTERACTIVE GAMING & COMMUNICATIONS (OTC: SBET) I mistakenly said that the stock traded on the Nasdaq national exchange. Shame on me, the stock is an OTC Bulletin Board stock and not a Nasdaq listed security. There is a rather large difference between being a Nasdaq listed stock and a Bulletin Board stock, with the main differences being a more stringent background check and requirements as far as SEC filings are concerned. I was made aware of an excellent (and very Foolish) article that explains the difference between Nasdaq listed stocks and OTCBB listed stocks that you can reach by clicking here. It also has a list of companies that are misrepresenting their stock listing status. I would almost call it a "must read" for those interested in small-cap stocks.

Winners and Losers

While CASINO MAGIC <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CMAG)") else Response.Write("(Nasdaq: CMAG)") end if %> and VIRTUAL GAMING (OTC: VGTI) reversed moves we saw a week prior, STUART ENTERTAINMENT <% if gsSubBrand = "aolsnapshot" then Response.Write("(NASDAQ: STUA)") else Response.Write("(NASDAQ: STUA)") end if %> and INTERNATIONAL LOTTERY AND TOTALIZER <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ITSI)") else Response.Write("(Nasdaq: ITSI)") end if %> made the "winner" list for the second week in a row. There was no news from either company.

Top percentage movers (stocks over $1)

Winners                      Closing Price  Weekly Move
Virtual Gaming (VGTI)        4 1/4           +54.55%
Net Bet (NBET)               3 3/4           +25.00%
Stuart Entertainment (STUA)  4               +23.08%
Int. Lottery and
   Totalizer (ITSI)          1 25/32         +21.28%

Losers                       Closing Price  Weekly Move
Butler National (BUKS)       1 3/16          -15.56%
Casino Magic (CMAG)          1 7/32          -13.33%
Canterbury Pk. (TRAK)        2 31/32         -12.04%
Penn National (PENN)        16               -11.11%

Earnings Summary

A rather light week in the earnings department. There was one notable "upward guidance" earnings pre-announcement by COLORADO CASINO RESORTS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CCRI)") else Response.Write("(Nasdaq: CCRI)") end if %> that said the company expects profits of above $0.10 per share for its third quarter and approximately $0.15 for its fiscal fourth quarter ending in October. The low stakes Colorado casinos tend to see the most traffic in the summer months when there is no mountain snow for commuters to contend with.

The Motley Fool's own Debora Tidwell also transcribed CIRCUS CIRCUS' <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CIR)") else Response.Write("(NYSE: CIR)") end if %> earnings conference call that I spoke of in last week's update.

                         1997      1996
Autotote (TTE)           (0.14)    (0.19)
Fair Grounds (FNGO)       2.23      1.41
Gaming Lotterty (GLCCF)  (0.10)    (0.04)

Did You Know...
The Grand Victoria in Elgin, Illinois, half owned by Circus Circus, is the highest grossing riverboat casino in the country?

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