(Article on the impact of the elections on casino stocks updated with comments from MGM CEO Jim Mullen on the re-election of Reid.

NEW YORK (TheStreet) -- Casino stocks were brought to the polls yesterday, with several gaming measures put up for a vote.

Oregon, Maine, Maryland, California and Missouri were among the states seeking approval for the development of new casinos. Amid the economic downturn, states are seeking new sources of revenue, which has led to looking at gaming for a boost.

In Nevada, there was significant interest in the battle between U.S. Sen. Harry Reid and tea party candidate Sharron Angle. Reid, who has been a friend to the casinos, won the election.

Reid aided MGM Resorts ( MGM) in its development of its $8.4 billion CityCenter resort/casino. MGM CEO Jim Murren commented about Reid's re-election during the company's third-quarter conference call.

"I know what he means to the gaming sector," Murren said. "The Internet gaming bill has a better chance now. This was a positive for the whole industry today. He understands the gaming industry, having served as chairman of the Nevada Gaming Commission.

Overall, the big winners at the polls were WMS Industries ( WMS), Bally Technologies ( BYI), International Game Technology ( IGT) and Isle of Capri Casinos ( ISLE), and to a lesser extent, Pinnacle Entertainment ( PNK)and Ameristar Casinos ( ASCA), Wells Fargo analyst Carlo Santarelli, wrote in a note.

Read on for a breakdown of the ballot initiatives voted on and how they will affect casino stocks.


In one of the most meaningful votes for the casino sector this year, Cordish was granted the local referendum to construct a slot casino at Anne Arundel Mall in Maryland.

This approval is a negative for Penn National Gaming ( PENN), which operates casinos in Charles Town and Perryville that attract customers from the Anne Arundel market.

The Anne Arundel facility is about 75 miles from Penn's Charles Town property and 55 miles from its recently opened Hollywood Casino in Perryville. The two properties account for 19.9% of Santarelli's 2013 net revenue estimate and 20.3% of its property level EBITDA for Penn.

Santarelli estimates that about 10% to 15% of Penn's Charles Town net revenue will be at risk due to the passing of the initiative. He believes Penn will ultimately look to shut down its Laurel Park live race operations, as a result, and potentially exit its race track investments in Maryland.

In July, Penn entered into a joint-venture with MI Developments to own and operate the Maryland Jockey Club, which owns both Laurel Park and Pimlico race tracks. Now that the referendum passed, it kills the hope of getting slots at Laurel Park, which was what Penn was betting on.

But Cordish's approval to construct a 4,750 slot casino is a positive for the three equipment makers, WMS, Bally and IGT, Santarelli noted.


Cape Girardeau, Mo., residents approved a local ballot initiative that will allow a casino development in the city.

Isle of Capri is the biggest beneficiary here, as it will be one of the four developers seeking the 13th license in Missouri. This project is a distinct growth drive for Isle of Capri, Santarelli wrote in a note.

Isle of Capri has estimated its Cape Girardeau project would cost $125 million to develop and employ 450 to 500 people. In an application to state gambling regulators, Isle of Capri predicts it will attract 1 million visitors per year from six states and boost city and county tax rolls by $3 million.

Of course, the approval by voters does not guarantee the Missouri Gaming Commission will award the city a license. If it was rejected, however, it would have almost definitely prevented the 13th license.

This is also a slight positive for Ameristar and Pinnacle's St. Louis properties, as Cape Girardeau is the best geographical location for a 13th license in terms of not stealing market share, Santarelli wrote in a note.


It's still too close to call the outcome of the vote for a casino in Oxford County, Maine. As of Wednesday morning, with more than three-quarters of Maine's precincts reporting, neither side was ready to claim victory.

Maine residents have voted on about six casino initiatives over the past decade, with just one passing. The only initiative that passed was in 2003, which allowed for the creation of a slots parlor adjacent to an affiliated racetrack. This is currently Penn National's Hollywood Bangor facility.

If the Oxford casino is passed it would, most certainly, be a surprise win.

Penn has been one of the biggest opponents of the initiative, helping to finance Citizens Against the Oxford County Casino. The casino in Oxford would be 120 miles away from its Bangor property, and Santarelli predicts it would be a competitive threat, especially in the spring and summer months.

If passed, however, it would allow up to 2,500 slots in the state, and be a positive for equipment manufactures, Santarelli wrote.

"Should table games be permitted, we see a scenario in which Penn National Gaming could benefit from the proposal should it be able to also get table game approvals in time," he continued.


California residents voted down an initiative that would have allowed a $1.2 billion mixed-use tribal resorts and casino in Richmond, Cali.

The casino would have been built by the Guidiville Band of Pomo Indians and Upstream Point Molate. It was expected to have 4,000 slot machines and 1,100 hotel rooms.

This proposal doesn't drastically affect the sector one way or another, but if passed, would have been most notable for the slot machine makers.


In Oregon, a state ballot seeking the development of a casino at the Multnomah Kennel Club in Wood Village, about 15 miles from Portland, Oregon, was voted down.

The Multnomah casino would have been the first private casino in the state, and was expected to have up to 3,500 slot machines and 150 table games.

Existing Indian casinos in Oregon spent a lot to get the measure opposed.

Again, this measure presented little tangible effects on the sector, but would have been a positive for equipment makers, if passed.

--Written by Jeanine Poggi in New York.

>To contact the writer of this article, click here: Jeanine Poggi.

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