A two-year-long fascination with the gaming industry’s equipment manufacturing sector continues in the investment community, as interest stirred by Scientific Games’ planned purchase of NYX Gaming Group and the renewed potential for gaming expansion in Pennsylvania boosted the stock value of gambling technology providers during September.
The AGEM Index rose more than 6 percent in September – the 24th straight monthly increase – according to Las Vegas-based financial advisor Applied Analysis, which produces the report for the Association of Gaming Equipment Manufacturers.
Half of the 12 companies followed in the report saw increases in their average daily stock prices during the month. Four companies – Agilysys, Galaxy Gaming, International Game Technology and Scientific Games – had double-digit increases.
The significant contributing factor to AGEM Index in September was Scientific Games’ announcement that it would acquire Canada-based NYX for $632 million.
The transaction allows Scientific Games to capitalize on regulatory developments concerning legalized sports betting. The company would add NYX’s OpenBet Sportsbook to its portfolio of products.
“NYX’s digital sportsbook can be seamlessly delivered throughout Scientific Games’ global gaming and lottery networks in existing and future regulated U.S. and global markets,” Applied Analysis wrote in the report.
The transaction, which Scientific Games is financing through debt and cash on hand, impressed investors, leading to a more than 30 percent increase in the company’s average daily price per share during the month.
International Game Technology saw its average daily share price increase more than 20 percent in September.
Meanwhile, Pennsylvania’s year-long budget battle may finally be coming to fruition, which could provide a new wave of revenue opportunities for gaming equipment providers.
During the month, state lawmakers attempted to complete a gaming expansion deal that would create 10 mini-casinos in rural areas, far removed from the state’s 12 existing casinos. The bill would allow for new gaming opportunities, including online wagering and daily fantasy sports.
Other language in the proposal allows video gaming terminals to be operated in non-traditional locations, albeit on a smaller scale than originally proposed earlier this year.
The proposal is still a long way from consensus.
“The Pennsylvania Legislature is expected to vote on a budget bill the second week in October after gaming expansion and other details are reviewed by House representatives,” Applied Analysis wrote in the report.
Also cited were positive results in September by the three broader stock market indexes. The S&P 500 reported a month-to-month increase of 1.93 percent, the Dow Jones Industrial Average increased 2.08 percent, and the NASDAQ increased 1.03 percent.
AGEM is a non-profit international trade association representing manufacturers and suppliers of electronic gaming devices, lotteries, systems, table games, online technology, key components and support products and services for the gaming industry.
During the Global Gaming Expo, AGEM said it raised more than $145,000 from its members. The trade group plans to contribute the money to the Las Vegas Victims Fund, which will be used to provide relief and financial support to the victims and families of the horrific Las Vegas mass shooting.
Follow @howardstutz on Twitter.
