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US – AGEM reaches record high in February

By - 8 March 2017

The AGEM Index reached another record high in February, continuing the momentum from previous months.

The composite index stood at 351.4 points at the close of February 2017, which represents an increase of 21.3 points, or 6.5 per cent, when compared to January 2017.

The AGEM Index reported a year-over-year increase for the 17th consecutive month, rising 155.4 points, or 78.4 percent, when compared to February 2016.

During the latest period, eight of the 13 global gaming equipment manufacturers reported month-to-month increases in stock price, with two up by more than 10 per cent. Five manufacturers reported decreases in stock price during the month with one experiencing double-digit losses.

The broader stock markets continued to gain value in February 2017. The S&P 500 reported a month-to-month increase of 3.7 percent, rising to 2,363.64. Additionally, the Dow Jones Industrial Average increased 4.8 percent to 20,812.24, while the NASDAQ increased 3.8 per cent during the period to 5,825.44.

Aristocrat Technologies (ALL) contributed 11.07 points due to a 9.64 per cent increase in stock price to AU$16.60.

Scientific Games Corporation (SGMS) reported a 21.47 per cent increase in stock price, rising to $20.65 and contributing 4.82 points.

Konami Corp (TYO: 0766) contributed 3.74 points due to a 4.87 per cent increase in stock price to ¥4,740.

With a stock price of $9.10 (-6.47 per cent), Agilysys (AGYS) contributed negative 0.17 points.
Ainsworth Game Technology (AGI) contributed negative 0.12 points to the index due to a 3.31 per cent decline in stock price to AU$1.75.

With the final numbers for the year tallied, it is a good time to review performances of the past year at two of the largest US domestic markets, as well as Macau China. Nevada’s tourism and gaming industries showed positive trends to close out 2016. Visitation to the Las Vegas area finished the year at an all-time high of 42.9 million travelers with roughly 620,000 more people visiting Las Vegas compared to the previous year. Visitation experienced a positive boost from the convention segment, with 6.3m trade show attendees, also a record from the 2007 high of 6.2m. The number of conventions held in the Las Vegas area rose, as Las Vegas hosted 21,864 trade shows, a 2.6 per cent increase over the previous year.

As for gaming revenue, the Nevada Gaming Control Board recently released the 2016 Gaming Abstract, which reported total revenue for casino operations in the state of Nevada at just over $25.2bn for the fiscal year ending June 30. Of the total, gaming revenue accounted for 42.6 per cent, or nearly $10.8bn over the same period. Total revenue was up 2.6 percent from 2015 while gaming revenue increased 1.3 per cent as the hospitality sector of the casino business continues to expand.

Of the statewide revenue total, $22.6bn, or 89.5 per cent, originated in the Clark County (Southern Nevada) market area. Additionally, 86.2 percent of the statewide gaming revenue was generated in Clark County, with nearly $9.3bn in gaming spend. Revenue in Clark County rose 2.5 percent from the $22bn reported in 2015, while gaming revenue grew 1.1 per cent from $9.2bn in the prior year.

Over 66.1 percent of Nevada’s gaming revenue was attributed to coin-operated devices with $7.1bn worth of coin-operated revenues in the year 2016. By comparison, pit revenue accounted for $3.2bn on the year, or 30.2 percent of total gaming revenue. Coin-operated devices experienced reasonable growth from 2015. In the state of Nevada, coin-operated revenue grew 3 percent from the $6.9bn reported in the prior year.

Pennsylvania gaming revenue also experienced a moderate increase from $3.17bnin 2015 to $3.21bn in 2016, or a 1.2 percent revenue increase. Slot machine revenue in the area remained relatively flat year to year with a small increase of 0.2 percent from $2.36bn in 2015 to $2.37bn in 2016.

Macau gaming revenue declined 1.9 percent year over year from $28.9bn to $28.3bn in 2016, though the last five months of 2016 showed positive increases in year-over-year revenues. The number of slot machines decreased in Macau from 14,578 units in 2015 to 13,826 units at the end of 2016, and slot machine revenue followed suit with a 3.1 per cent decline.

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