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Center of Power

Investing in the gaming industry is no longer a U.S. monopoly

Center of Power

For a very long time, investors focused on New York as the center of the stock-investing world in the gaming industry.

More recently, London has gained prominence thanks to the rise of internet gaming companies and the London Stock Exchange?s version of Nasdaq, the Alternative Investment Market, or AIM.

But investors in North America could get along quite well not worrying about the rest of the world, knowing that there were few opportunities in the likes of an Aristocrat in Australia or Aruze in Tokyo.

That insularity is dissipating rapidly because of two factors:

1. Homegrown European and Asian companies have become serious international competitors, including in North America.

2. Many international companies see little advantage in having to endure the hassles of listing in the United States when they can fulfill their financial needs listing at home.

In other words, investors everywhere are going to have to start trading outside New York and London if they want to take full advantage of opportunities.

Here are a few examples:

• Lottomatica is the Italian lottery company that bought GTECH. It has adopted a diversification strategy that also makes it a slot machine company and an internet software provider. In addition, it is entering the embryonic sports betting industry in Italy.For that growth and diversity, an investor has to buy the stock on the Milan exchange in Italy. LTO does have an American pink sheet symbol: LTTOY.

 • Intralot is the second-largest lottery company in the world, with global growth ambitions. It is making something of a splash in the United States, having captured the lottery contracts in five relatively small states and now, its biggest yet, Ohio. So, there is a choice beyond Lottomatica and Scientific Games for investors wanting to play international lottery growth. But to do so with this Greek company, you?ll have to go to the Athens stock exchange.

• Crown Ltd. is more than an Australian casino operator and partner in Macau?s Melco PBL.It also is becoming a North American casino company with purchase of Gateway casinos in Canada, Meadows racino in Pennsylvania, the Cannery casinos in the Las Vegas locals market and a significant stake in Fontainebleau rising on the Las Vegas Strip. Crown, naturally, lists on the Australian stock exchange, but it has a pink sheet symbol: CWLDF.

• Genting International was a small part of the big Genting Group not long ago. The gaming arm of that big group did not even own Genting Highlands, the giant Malaysian casino. But Genting International is a growth vehicle now. It has acquired Stanley Leisure, the largest United Kingdom casino operator (which has properties in Europe as well). And the Sentosa Island mega-resort rising in Singapore will be one of the world?s great casino resorts. In a good political move, Genting International moved to the Singapore stock exchange a few years ago. It has a pink sheet symbol: GIGNF.

• Genting Group. Other publicly traded Genting companies are involved in gaming. Resorts World operates Genting Highlands in Malaysia, the region?s biggest resort. And Star Cruises is a cruise liner with casinos aboard, but its potentially big project is a mega-resort proposed for Manila Bay in the Philippines.

 • Elixir Game Technologies lists on both the American Stock Exchange and in Hong Kong. As is common in Asia, EGT is aligned with other public companies, such as its ultimate parent, Melco International. EGT is the one company mentioned here that is not a casino operator. It supplies slot machines to Asian slot parlors in turn-key operations.

• Hong Kong Stock Exchange has emerged as the place to buy Asian gaming stocks. In addition to Melco Crown trading there, so does Melco International, the parent of the Melco half of Melco Crown. Also trading is Galaxy Entertainment, AMAX, NagaCorp, Shun Tak, and a host of other companies and, in the not-so-distant future, the granddaddy of all Asian casino operators, Stanley Ho?s SJM.

• Aruze trades on the Tokyo Stock Exchange. Historically a gaming machine supplier, Aruze owns of chunk of Wynn Resorts, and soon will become a casino operator if its proposed Pagcor City mega-resorts in the Philippines come into being. These are just a few examples of the growing globalization of an industry that not many years ago had only a handful of publicly traded companies based mostly in Nevada.

Frank Fantini is the editor and publisher of Fantini?s Gaming Report. A free 30-day trial subscription is available by calling toll free at 1-866-683-4357 or online at www.gaminginvestments.com.

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