Casinos Still Like Odds

"Passage of Question 712 levels the playing field of the existing slot providers and is a positive for International Game Technology and Alliance Gaming (AGI Quote)," wrote Citigroup's Rietbrock. "Implications for Multimedia Games (MGAM Quote) are somewhat mixed. Although Multimedia will benefit from the level playing field, the passage of 712 further opens the market to competition from Alliance and IGT. Legalization of video poker should be a specific positive for IGT, which has a dominant share of that segment."

Elsewhere, Wisconsin voters approved setting aside land for a large tribal casino. Rietbrock wrote that it could pave the way for an $800 million casino by 2008 -- a modest positive for gaming equipment makers but a slight negative for casino operators with facilities near Chicago, particularly Mandalay Resort Group (MBG Quote).

In Nebraska, voters rejected Amendment 3, which would have allowed two casinos anywhere in the state, and Initiatives 417 and 420, which would have allowed two casinos in Omaha and slot machines and video poker elsewhere.

"Passage of either proposition would have been meaningfully negative for casinos located in Iowa, especially for operators with exposure to the Council Bluffs or Sioux City markets," wrote Rietbrock. Those operators include Harrah's Entertainment (HET Quote) and Argosy Gaming (AGY Quote). "If the Amendment or Initiatives had passed, we believe Omaha (large feeder market into Council Bluffs) would have been a very likely site. We do not believe gaming expansion in Nebraska is likely to be revisited in the near term following the defeat of both propositions."