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Slot Companies Keep Sales High as States Expand Gambling

Changing state laws that permit expanded gambling are turning into a boon for casino supply companies, as they expect to sell many thousands of new slot machines and video poker games.

While giant Las Vegas gambling operators struggle to fill their casinos, the gaming manufacturers that supply them are doing great business. The need to create new revenues has caused a tide of expanded gambling to cover the US, and slot suppliers are churning out machines to stock new venues.

Just this week, Illinois funded a $31 billion infrastructure bill through expanded gaming. Video poker machines will be legal at local establishments that serve alcohol, and state tracks will carry slots.

An estimated 77,000 video poker machines may flood the state, along with thousands of slots. And the same day, Governor Ted Strickland of Ohio issued an executive order to put slots at the seven tracks in his state, resulting in another potential 18,000 machines.

Joseph Gref cautioned in a JPMorgan client note that the actual number of video poker games may be half that optimistic estimate, and says "we think there will be additional regulatory oversight for this expansion so we think the earliest for new shipments would be calendar 2010."

But companies like IGT, Bally's, and WMS all seem likely to find enough orders to cause satisfactory results, especially compared to such companies as Las Vegas Sands and MGM Mirage. While Gref says he expects IGT to get as much as 60 percent of the new Illinois business, there is still Ohio to equip... and potentially Massachusetts this fall...and then maybe Kentucky...

Published on July 14, 2009 by A.J.Maldonado

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Posted by: andreasWhen: 05/01/2010 12:37:21 PM EST
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