Stock upgraded on N.Y. casino move

Tuesday, Oct. 30, 2001 | 9:29 a.m.

UBS Warburg upgraded International Game Technology from "hold" to "buy," citing growing political momentum for legalized gambling and improved earnings visibility.

UBS gaming analyst Robin Farley raised her 12-month price target for IGT form $49 to $60, an 18 percent premium over Monday's close. Farley also raised her 2003 earnings estimate from $3.55 to $3.71.

The upgrade follows New York's passage of a bill last week that could introduce up to six new Indian casinos in that state, as well as slots at five racetracks. Farley estimated the potential slot demand from New York at 22,000 machines.

"New York alone is not enough to make IGT a buy, but it is a buy based on our probability analysis of other states that may legalize (casino gambling)," Farley wrote. "If political momentum for new legalizations starts to materialize, multiple expansion could move the stock even without clear earnings visibility."

Possible future markets for expansion include Kentucky, Maryland, New Hampshire, Ohio, Pennsylvania and Rhode Island, she wrote. In addition Farley said investors should consider the possibility of casino legalization in the United Kingdom and Mexico.

"If Britain and/or Mexico do move forward and legalize gaming, it could be an opportunity for U.S. gaming operators to develop casinos as well as a boon to equipment suppliers such as IGT," Farley wrote.

Former prosecutor hired as casino regulator

CHICAGO -- Former federal prosecutor Philip C. Parenti has accepted a job as administrator of the Illinois Gaming Board, the regulatory board announced today.

Parenti will fill the spot left open when Sergio Acosta, also a former federal prosecutor, returned to the U.S. attorney's office in Chicago last month. Acosta led the board in several high-profile decisions, including the denial of a riverboat license to Emerald Casino Inc. in Rosemont.

"It's an honor to join the Gaming Board as its administrator," Parenti said in a statement. "The Gaming Board plays an important role in the economic well-being of the state by assuring the integrity of riverboat gambling through regulation."

The board's administrator oversees a staff of about 100 in Chicago and Springfield and heads investigations into the riverboat gambling industry.