Slot stocks up on Okla. success

Monday, March 1, 2004 | 9:43 a.m.

SUN STAFF AND WIRE REPORTS

Shares of gambling-machine makers rose Friday after the Oklahoma Legislature passed a measure to allow three horse-racing tracks to operate the same electronic betting games being played at the state's Indian casinos, and assured the legality of the tribal-operated games.

The Oklahoma House, in a 52-47 vote Thursday, passed Senate Bill 553, which the state Senate had already approved. The measure has the support of Oklahoma Gov. Brad Henry and the state's horse industry and Indian tribes.

Shares of Austin, Texas-based Multimedia Games Inc., the major player in Oklahoma's tribal electronic-bingo market, rose $1.66, or 4.1 percent, to $42.

The stock of slot-machine maker Alliance Gaming Corp. of Las Vegas was up 41 cents, or 1.7 percent, at $24.28, and Reno competitor International Game Technology's shares rose $1.84, or 4.9 percent, to $39.24.

The Oklahoma legislation excludes slot machines, but its passage will open the door for International Game and Alliance Gaming to enter the state's electronic bingo market and offer other video betting games the measure may allow, Susquehanna Financial Group analyst Eric Hausler said.

The U.S. Supreme Court today rejected a challenge to the video-bingo games that tribes in Oklahoma and some other places operate without benefit of a specific regulatory compact with the states.

The Oklahoma bill will allow tribes in that state to enter such a compact, giving their electronic-bingo games a protected status and diminishing the threat of an adverse high-court ruling for Multimedia, Hausler said.

"All the risk isn't gone but a good chunk of it is," Hausler said.

Separately, a bill to authorize 15,500 slots machines at up to six locations in Maryland passed the state Senate on Friday and headed to an uncertain future in the House of Delegates.

The heavily amended version of Gov. Robert Ehrlich's slot machine bill was approved on a 27-18 roll call after about an hour of debate. That is two votes more than last year, when it squeezed through the Senate on a 25-21 vote, just one vote more than the 24 required for passage.

The vote was preceded by a last-minute flurry of activity, including a visit by Ehrlich to Republican senators at a caucus meeting in the Senate lounge just before the Senate convened for the day.

"The governor gave ... an emphatic speech to the Republican senators before the vote asking for solidarity. He is pleased with the votes he got," said Shareese DeLeaver, a spokeswoman for Ehrlich.

A slot machine bill passed the Senate last year but died in the House Ways and Means Committee, where it will be sent again this year when it reaches the House next week.

House Speaker Michael Busch, D-Anne Arundel, who played a key role in defeating the governor's bill at the 2003 session, would not predict what will happen to it this year. Busch said the House will be in no rush to take up the slots issue.

"We'll wait until it comes over and judge it like any other revenue source," Busch said. "It will have a hearing. It will go through the same process every other bill will go through."

But he has said major changes will be required before the House will vote to authorize slot machines. Busch and some House leaders oppose automatically giving slot machine licenses to racetrack owners and believe the state can get a better deal if it owns the slots facilities and leases them out to an operator.

The governor's office and legislative fiscal advisers estimate the state's share of slot machine revenues would be almost $830 million when all 15,500 proposed slot machines are in operation. The money would be used for public schools.

During Senate debate, supporters said the bill is the only way to produce the revenue needed to fund the state's $1.3 billion "Bridge to Excellence" school aid plan.