Let’s halt one rumor before it gains traction.
Scientific Games Corp.’s $1.5 billion acquisition of slot machine manufacturer WMS Industries doesn’t mean a statewide lottery is headed to Nevada.
New York-based Scientific Games provides lottery systems and equipment to U.S. states, Canadian provinces and foreign governments. The company was actively seeking to acquire a traditional slot machine vendor when the buyout was announced in February.
It wasn’t about bringing a lottery to Nevada.
That said, Wall Street, which was skeptical about the deal, is starting to find some comfort with the transaction.
Scientific Games is paying $26 per share for WMS, roughly 59 percent above the slot maker’s closing stock price on Jan. 31.
When the buyout was announced, both WMS and Scientific Games officials said the transaction would provide $100 million of synergistic cost-savings between the merged companies.
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Several one-time charges and costs associated with the opening of a hotel-casino in Baton Rouge, La., caused regional gaming operator Pinnacle Entertainment to suffer a net loss in the fourth quarter.
The Las Vegas-based company said Wednesday its net loss in the quarter that ended Dec. 31 was $42.4 million, or 72 cents per share, compared with a profit of $25 million, or 40 cents per share, a year earlier.
The largest charge Pinnacle took in the quarter was a noncash write-down of approximately $25 million related to the company’s investment in a casino project in Vietnam. Pinnacle also reported one-time charges surrounding casino expansion projects in St. Louis and the opening of the L’Auberge Baton Rouge in September.
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Pinnacle Entertainment board member John Giovenco, who served as the regional casino companys interim chief executive officer for five months, retired from his position last week.
The Las Vegas-based company made the announcement Friday.
Giovenco joined the Pinnacle board in 2003 and took part in many aspects concerning the companys growth.
After CEO Dan Lee resigned in November 2009, Giovenco stepped in and directed the company until the hiring of current CEO Anthony Sanfilippo in March 2010.
John has made significant contributions to the board’s decisions during his tenure, Pinnacle Chairman Richard Goeglein said in a statement.
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What fiscal cliff?
Gaming stocks were oblivious to investor worries that the lack of a year-end agreement in Congress to avoid wide-ranging tax increases and spending cuts would push the economy over the edge.
The sector closed out 2012 on a positive note in December.
Of the 12 gaming companies followed by Las Vegas financial adviser Applied Analysis, 11 showed marked increases in their average daily stock prices during the month.
Eight of the companies finished 2012 with a higher average daily stock price than in 2011.
Applied Analysis principal Brian Gordon told the firm’s clients Monday in a research report that investors believed a compromise would likely take place in Congress concerning federal revenue enhancements and other measures.
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