A day after Pennsylvania gambling regulators voted to permit slot machine distributors to operate throughout the state, the ripple effect was immediately felt in the industry. Shares of Penn National Gaming Inc. (owner/operators of Penn National Race Course and six off-track betting centers in the state) ebbed up slightly on the NASDAQ to $38.13 Thursday, after a 9 percent initial gain on Wednesday to $38.25.

In other related stocks, shares of International Game Technology (a slot machine designer/manufacturer) rose $1.25 or 3.5 percent to $37.19 on the NYSE, before closing the week even higher at $37.94. For the past 52 weeks, it has been trading in the $25.44-$39.39 range. Similarly, fellow slot-maker Bally Technologies Inc. received a bump of its own upon the vote of 79 cents or 5.2 percent to $16.02 on the NYSE. It closed the week at $16.47. The Pennsylvania Gaming Control Board still has to approve slot parlors at the state’s six horseracing tracks, with a favorable decision expected by September’s end. Pending the approval, four tracks have indicated they would open slot parlors by the end of the year.

Meanwhile, Boyd Gaming Corporation and MGM Mirage unveiled their $200 million Borgata Hotel Casino and Spa expansion this week in Atlantic City. The expansion features three new signature restaurants as well as more casino games, an 85-table poker room and additional nightclub. The expansion’s next phase is already underway and will include a second hotel adjoining the property. Boyd’s shares were up slightly at week’s end to $40.19 on the NYSE, while MGM’s gained 53-cents to close at $40.80. Boyd Gaming is still trying to rebound from a poor first-quarter earnings report that has seen the stock drop from $54.

Elsewhere, Riviera Holdings Corp. announced it will hold a shareholders meeting on Aug.8 to vote on its proposed acquisition by Riv Acquisition Holdings Inc. Riv agreed in April to buy Riviera for $17 a share, cash, or approximately $211.5 million. Including the assumption of around $215 million in debt, the entire offer would come in near $426.5 million. A 60 percent approval by shareholders is required for Nevada and Colorado gaming regulatory authorities. Some opposition by New York investment firm D.E. Shaw & Co. LP is expected, a group of affiliated firms owning 9.9 percent in Riviera who are on record as feeling the offer is too low. Along with the Riviera Hotel and Casino on the Vegas strio, Riviera Holdings also own a casino in Black Hawk, Colordado. On the American Stock Exchange, share of Riviera were up trading as high as $20.92 as the week closed.

posted by Rex Harris