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New ratings structure adopted

Tuesday, Nov. 5, 2002 | 11:05 a.m.

Wall Street investment firm Goldman, Sachs & Co. has adopted a new ratings system for gaming companies that rates stocks relative to their peer group rather than the broader market.

Goldman analyst Steven Kent has assigned a "neutral" rating to the sector amid concerns that earnings growth over the next 12 months will be limited for most casino operators.

"We are concerned that the underpinnings of support that allowed gaming shares to outperform in the first half of 2002 will disappear as consumer confidence slows, comparisons become increasingly difficult and new amenities that may have attracted customers to casinos in 2002 no longer have the draw," Kent wrote in a research note to investors.

Kent advised investors to keep a "trading orientation" or focus on shares of slot manufacturers such as International Game Technology of Reno and Las Vegas-based Alliance Gaming Corp.

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