Intel Virtualization Journal

LAS VEGAS, NV -- (Marketwire) -- 02/09/10 -- The AGEM Index ended the month of January 2010 at 102.88, dipping 3.44 points or 3.23 percent from the previous month and falling back to a level not seen since July 2009. The AGEM Index has been in tow with the broader S&P 500 Index over the last few months, which also slid 3.7 percent during the month of January 2010. However, it is important to note the extent of movement in the index relative to the latest downturn in the business cycle. The AGEM Index remains down 32.2 percent since it reached its zenith of 151.84 at the beginning of the recession in December 2007, but reversibly, it has gained nearly 55.2 percent from when it closed at 66.30 12 months ago. While market confidence has edged upward from its abyss, the timing for valuations approaching pre-recessionary levels will be slowed by investor caution. The global gaming suppliers' ability to continue investing in innovation and diversification of new product lines while maintaining strong balance sheets will be key considerations going forward.

Selected positive contributors to the index during the month include: (1) Global Cash Access (GCA) with the largest contribution, adding 0.26 points to the index based on a 8.14-percent increase in its stock price; and (2) Shuffle Master (SHFL) contributing 0.21 points with a 7.89-percent increase in its stock performance.

Selected negative contributors to the index include: (1) INTRALOT S.A. (INLOT) with its stock price dropping 21.95 percent, contributing -0.93 points to the index; and (2) WMS Industries (WMS) posting -0.88 points to the index with a 7.30-percent decline in its stock valuation.

While we continue to note that new markets will drive valuations, which we have recently seen through favorable-gaming legislation, it is important not to lose focus on consumers in existing markets, where leisure and business travel remain remarkably down. These areas will be closely watched during 2010.

AGEM                             Stock Price At         Percent
                                    Month End           Change
                  Exchange:  ----------------------  -------------  Index
                   Symbol                            Prior   Prior  Contri-
                 (Currency)  Jan-10  Dec-09  Jan-09  Period   Year  bution
                ------------ ------  ------  ------  ------  ------ ------
Ainsworth Game    ASX: AGI
 Technology        (AU$)       0.18    0.18    0.07   (2.78) 139.73  (0.01)
                ------------ ------  ------  ------  ------  ------ ------
Aristocrat        ASX: ALL
 Technologies      (AU$)       3.97    4.02    3.75   (1.24)   5.87  (0.06)
                ------------ ------  ------  ------  ------  ------ ------
Astro Corp.     Taiwan: 3064
                   (NT$)      67.00   74.00   40.70   (9.46)  64.62  (0.07)
                ------------ ------  ------  ------  ------  ------ ------
Bally            NYSE: BYI
 Technologies      (US$)      39.67   41.29   20.19   (3.92)  96.48  (0.47)
                ------------ ------  ------  ------  ------  ------ ------
Elixir Gaming    AMEX: EGT
 Technologies      (US$)       0.26    0.25    0.13    4.00  100.00   0.01
                ------------ ------  ------  ------  ------  ------ ------
GameTech        Nasdaq: GMTC
 International     (US$)       1.60    1.40    1.23   14.29   30.07   0.01
                ------------ ------  ------  ------  ------  ------ ------
Gaming Partners Nasdaq: GPIC
 International     (US$)       5.66    5.61    6.80    0.89  (16.76)  0.00
                ------------ ------  ------  ------  ------  ------ ------
Global Cash      NYSE: GCA
 Access            (US$)       8.10    7.49    2.71    8.14  198.89   0.26
                ------------ ------  ------  ------  ------  ------ ------
IGT              NYSE: IGT
                   (US$)      18.34   18.77   10.60   (2.29)  73.02  (0.69)
                ------------ ------  ------  ------  ------  ------ ------
INTRALOT S.A.   ATHEX: INLOT
                   (EUR)       3.20    4.10    3.02  (21.95)   5.96  (0.93)
                ------------ ------  ------  ------  ------  ------ ------
Konami           NYSE: KNM
                   (US$)      16.98   18.00   20.39   (5.67) (16.72) (0.71)
                ------------ ------  ------  ------  ------  ------ ------
Lottomatica     MILAN: LTO.MI
 (GTECH)           (EUR)      14.35   14.03   14.42    2.28   (0.49) (0.01)
                ------------ ------  ------  ------  ------  ------ ------
Multimedia      Nasdaq: MGAM
 Games             (US$)       4.93    6.01    1.71  (17.97) 188.30  (0.13)
                ------------ ------  ------  ------  ------  ------ ------
Shuffle Master  Nasdaq: SHFL
                   (US$)       8.89    8.24    3.39    7.89  162.24   0.21
                ------------ ------  ------  ------  ------  ------ ------
Transact        Nasdaq: TACT
 Technologies      (US$)       7.25    6.94    3.92    4.47   84.95   0.02
                ------------ ------  ------  ------  ------  ------ ------
Wells-Gardner    AMEX: WGA
 Electronics       (US$)       2.49    2.27    0.64    9.69  289.06   0.01
                ------------ ------  ------  ------  ------  ------ ------
WMS Industries   NYSE: WMS
                   (US$)      37.08   40.00   22.22   (7.30)  66.88  (0.88)
                ------------ ------  ------  ------  ------  ------ ------
Change in Index
 Value                                                               (3.44)
                ------------ ------  ------  ------  ------  ------ ------
AGEM: December
 2009                                                               106.32
                ------------ ------  ------  ------  ------  ------ ------
AGEM: January
 2010                                                               102.88
                ------------ ------  ------  ------  ------  ------ ------

ANALYSIS PROVIDED BY UNION GAMING GROUP

Gaming supplier shares couldn't overcome a difficult January macro. Fears around a double-dip recession abounded as stimulus capital wore off. The market grew incrementally, concerned about 4Q09 results (broader market and gaming in particular), while fears on sovereign credit (Greece, Portugal, Euro zone) began to infiltrate sentiment.

Gaming sector activity was mixed during the month. Pennsylvania passed its gaming table bill; Kentucky filed multiple gaming bills with the Governor's support; four additional proposed casinos met financial deadlines in Iowa; Delaware advanced a table measure; Illinois' 10th casino license received local planning approval; Calder represented the second Miami-Dade casino to open in the county; and the prospect of racino approvals in Ohio appeared greater given ballot initiative dynamics.

At the same time, Florida officially rejected the Seminoles compact proposal; Delaware voted against casino expansion in the state; Indiana's land based casino proposal was shot down; and Missouri decided to yank Pinnacle's President casino license.

Market data improved in Las Vegas with November and December (delayed) visitation and airlift statistics showing growth along with Consumer Electronics Show (CES) attendance up a resounding 6% during the period.

Macau's gaming revenue continue to grow at a blistering pace, along with continuation of momentum in Asian gaming given a partial opening of Genting's Resort World Sentosa (RWS) in Singapore and the publication of Junket rules by the Casino Regulatory Authority (CRA) in that market.

The AGEM Index

The Association of Gaming Equipment Manufacturers (AGEM) produces the monthly AGEM Index that comprises 17 global gaming suppliers throughout the world. A total of 12 suppliers are based in the United States and are listed on the NYSE, Nasdaq or AMEX, while two trade on the Australian exchange, one supplier trades on the Athens exchange, one trade on the Milan exchange, and another trades on the Taiwan OTC exchange. The index is computed based on the month-end stock price (adjusted for dividends and splits) of each company and weighted based on approximation of market capitalization. Market capitalizations for manufacturers trading on foreign exchanges have been converted to US dollar equivalents as of month-end for comparability purposes. The AGEM Index is based on a 100-point value as of January 2005.

About AGEM

AGEM is an international trade association representing manufacturers and suppliers of electronic gaming devices, systems, table games, key components and support products and services for the gaming industry. The Association works to further the interests of gaming equipment suppliers throughout the world. Through political action, tradeshow partnerships, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM has assisted regulatory commissions and participated in the legislative process to solve problems and create a positive business environment.

AGEM Membership Roster

The current AGEM membership roster, 81 strong, is a who's who of the supplier segment of the global gaming industry: AGEM Gold Members: Aristocrat Technologies, Aruze Gaming America, Austrian Gaming Industries, Bally Technologies, GTECH/Atronic/Spielo, International Game Technology (IGT), INTRALOT S.A., Konami Gaming and WMS Gaming. AGEM Silver Members: AC Coin & Slot, Action Gaming, Casino Technology, Interblock USA, JCM Global, MEI, Multimedia Games, Octavian International, Shuffle Master, Suzo-Happ Group, TCSJohnHuxley and Wells-Gardner Electronics. AGEM Bronze Members: Ainsworth Game Technology, Astro Corp., Cadillac Jack, Cammegh Limited, CashCode / Crane Payment Solutions, Diamond Game, Digital Display Group, Euro Games Technology (EGT), GameTech International, Gaming Support, Incredible Technologies, Jumbo Technology, KGM Gaming, MCA Processing, Modern Gaming, Rocket Gaming Systems and Summit Gaming. AGEM Associate Members: CMYK Creative, Cole Industries, Cybertec Gaming Systems, DynaGraphic Printing, Elite Casino Products, Esterline Advanced Input Systems, FutureLogic, Gaming Partners International, Gary Platt Manufacturing, Global Cash Access, Global Gaming Group (G3), Grand Products, Greenberg Traurig LLP, Howard & Howard, IdeaWork Studios, IDX, Intel, IPS, James Industries, Kreller Group, KSK, Lewis & Roca, Masterpiece Advertising, MC2, Mikohn Signs and Graphics, Money Controls, Nanoptix, Paokai Electronic Enterprise Co., Proforma GPS, Regulatory Management Counselors, Sanmina-SCI, Strategy9, Talent Associates, Tgraphics/Outpost Productions, The Bright Group, 3M Touch Systems, Tournament One, TMX, Trade Show Fabrications, TransAct Technologies, Veridocs, Wrex Products and Young Electric Sign Company (YESCO).

AGEM Index and Overview

The AGEM index and overview is prepared by Applied Analysis (AA). AA is a Nevada-based advisory services firm providing a wide range of consultation services for public and private entities. The company utilizes extensive experience in economics, information technology and finance to provide a wide range of services, including urban economic consulting, financial advisory services, market analysis, public policy analysis, hospitality industry and gaming consulting and information system and technology consulting.

Industry Analysis

Industry Analysis is prepared by Union Gaming Group (UGG). UGG is an independent research firm, government and industry advisor, focusing on the global gaming business. UGG provides research, access and advisory services and offers varying levels of research products and services, which capitalize on UGG's relationships with corporate managements, governments, and other parties relevant to the global gaming business.

Disclaimer

Data and information contained herein is provided for informational purposes only, and is not intended for investment, company evaluation or other decision-based purposes. This analysis is based on selected economic data from a wide range of economic data and statistics and is not intended to be a comprehensive overview of all economic factors. Neither Association of Gaming Equipment Manufacturers, its members, partners, principals or employees, nor any of its data or content providers shall be liable for any errors in the content, or for any actions taken in reliance thereon. By reviewing this data, a user agrees not to redistribute the information found therein. AGEM shall not be liable for any actions taken in reliance thereon.

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