Significant movement in the broader markets, favorable reports from gaming operators and growth in selected gaming jurisdictions pushed the March 2010 AGEM Index into positive territory for the year as it rebounded from losses witnessed during the first two months of 2010.

With a gain of nearly 5.1%, the AGEM Index ended the month at 107.45, representing an increase of 5.17 points from February 2010. For comparison purposes, the S&P 500 and the Dow Jones Industrial Average rose 5.9% and 5.1%, respectively, during the month of March 2010.

Investor caution has mildly subsided as earnings reports for selected global gaming suppliers and operators included forward-looking statements that 2010 and beyond may be more positive than the past year. As part of their year-end earnings report (released in March 2010), President and CEO of Gaming Partners International (GPIC), Greg Gronau, noted, “With our strong cash and low debt position, we are poised to consider potential strategic acquisitions and partnerships that will grow our business.”

Various AGEM members have expressed similar optimism as their operations have begun to stabilize and leading indicators point to some improvement in both the gaming and broader economic environment. Selected positive contributors to the index during the month included: International Game Technology (IGT) posting 1.41 points to the index with a 5.13-percent increase in its stock price; and WMS Industries (WMS) reporting a 10.57% gain in its stock valuation, contributing 1.30 points to the index. Selected negative contributors to the index included: Bally Technologies (BYI), with its stock price falling 2.10%, contributing -0.24 points to the index; and INTRALOT S.A. (INLOT) contributing -0.14 points to the index with a 3.46% decline in its stock valuation.

While cautious optimism materialized in the broader economy, gaming suppliers continued to operate in a challenging environment as the level of investment in replacement gaming equipment remains somewhat limited. That said, deferred capital expenditures may begin to play a role in operators' financial performances. Global gaming suppliers’ dependence on growth in the U.S. domestic market as well as on the global stage will be key to moving beyond the latest economic cycle. (E-04.08.10)

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