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NEW YORK - On the eve of Election Day, shares of some gaming equipment suppliers and casino operators were mostly lower as investors awaited the outcome of key gaming referendums.
In Colorado, Tuesday's voters will look at increasing bet limits, expanding casino operating hours and requiring statewide approval to change the gaming tax rate. Missouri voters will be looking at issues such as capping casino licenses, raising the gaming tax and removing the $500 loss limit.
Elsewhere, residents in Maryland, Maine and Ohio will be asked to vote on gaming expansion measures.
Nicholas A. Danna IV of Sterne, Agee & Leach expects referendum passage everywhere but Ohio.
"In our view, the high level of expected voter turnout and the current economic downturn provide the ideal backdrop for the passage of gaming referendums," Danna wrote in a note to clients.
But Oppenheimer & Co.'s David Katz predicts tighter races, which could lead to volatility in the stocks.
Katz views Maryland's vote on the potential legalization of slot machines at five locations as the most significant measure. The analyst said Penn National Gaming Inc.'s Charles Town property could be hurt by the possibility of new competition coming online, but that would be offset by Wyomissing, Pa.-based Penn potentially receiving a Cecil County, Md., license and table games in West Virginia.
Penn National Gaming's stock gained 67 cents, or 3.5 percent, to $19.93 in afternoon trading. The shares have traded in a 52-week range of $11.82 to $62.25.
Goldman Sachs' Betsy Gorton said slot makers Bally Technologies Inc., International Game Technology and WMS Industries Inc. may get a slight boost from Election Day, as the passage of gaming expansion referendums would create new slot opportunities.
"If all five states approve the initiatives we estimate it could add over 20,000 slot machines to the approximately 925,000 North American base for 2 percent incremental growth," Gorton said.
Shares of Bally Technologies dipped 30 cents to $21.85, while International Game Technology's stock fell $1.08, or 7.7 percent, to $12.92. Shares of WMS Industries fell 18 cents to $24.82.
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