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AGEM Index reaches another industry high

The AGEM Index reached another record high in February, continuing the momentum from previous months. The composite index stood at 351.4 points at the close of February 2017, which represents an increase of 21.3 points, or 6.5 percent, when compared to January 2017. The AGEM Index reported a year-over-year increase for the 17th consecutive month, rising 155.4 points, or 78.4 percent, when compared to February 2016.

During the latest period, eight of the 13 global gaming equipment manufacturers reported month-to-month increases in stock price, with two up by more than 10 percent. Five manufacturers reported decreases in stock price during the month with one experiencing double-digit losses.

The broader stock markets continued to gain value in February 2017. The S&P 500 reported a month-to-month increase of 3.7 percent, rising to 2,363.64. Additionally, the Dow Jones Industrial Average increased 4.8 percent to 20,812.24, while the NASDAQ increased 3.8 percent during the period to 5,825.44.

Selected positive contributors to the February 2017 AGEM Index included the following:
Aristocrat Technologies (ALL) contributed 11.07 points due to a 9.64 percent increase in stock price to AU$ 16.60.

Scientific Games Corporation (SGMS) reported a 21.47 percent increase in stock price, rising to $ 20.65 and contributing 4.82 points. 

Konami Corp (TYO: 0766) contributed 3.74 points due to a 4.87 percent increase in stock price to ¥4,740.

Selected negative contributors included the following:
With a stock price of $ 9.10 (-6.47 percent), Agilysys (AGYS) contributed negative 0.17 points.

Ainsworth Game Technology (AGI) contributed negative 0.12 points to the index due to a 3.31 percent decline in stock price to AU$ 1.75. 
                  
With the final numbers for the year tallied, it is a good time to review performances of the past year at two of the largest US domestic markets, as well as Macau China. Nevada’s tourism and gaming industries showed positive trends to close out 2016. Visitation to the Las Vegas area finished the year at an all-time high of 42.9 million travelers with roughly 620,000 more people visiting Las Vegas compared to the previous year. Visitation experienced a positive boost from the convention segment, with 6.3 million trade show attendees, also a record from the 2007 high of 6.2 million. The number of conventions held in the Las Vegas area rose, as Las Vegas hosted 21,864 trade shows, a 2.6 percent increase over the previous year.

As for gaming revenue, the Nevada Gaming Control Board recently released the 2016 Gaming Abstract, which reported total revenue for casino operations in the state of Nevada at just over $ 25.2 billion for the fiscal year ending June 30. Of the total, gaming revenue accounted for 42.6 percent, or nearly $ 10.8 billion over the same period. Total revenue was up 2.6 percent from 2015 while gaming revenue increased 1.3 percent as the hospitality sector of the casino business continues to expand.

Of the statewide revenue total, $ 22.6 billion, or 89.5 percent, originated in the Clark County (Southern Nevada) market area. Additionally, 86.2 percent of the statewide gaming revenue was generated in Clark County, with nearly $ 9.3 billion in gaming spend. Revenue in Clark County rose 2.5 percent from the $ 22.0 billion reported in 2015, while gaming revenue grew 1.1 percent from $ 9.2 billion in the prior year.

Over 66.1 percent of Nevada’s gaming revenue was attributed to coin-operated devices with $ 7.1 billion worth of coin-operated revenues in the year 2016. By comparison, pit revenue accounted for $ 3.2 billion on the year, or 30.2 percent of total gaming revenue. Coin-operated devices experienced reasonable growth from 2015. In the state of Nevada, coin-operated revenue grew 3 percent from the $ 6.9 billion reported in the prior year.

Pennsylvania gaming revenue also experienced a moderate increase from $ 3.17 billion in 2015 to $ 3.21 billion in 2016, or a 1.2 percent revenue increase. Slot machine revenue in the area remained relatively flat year to year with a small increase of 0.2 percent from $ 2.36 billion in 2015 to $ 2.37 billion in 2016.

Macau gaming revenue declined 1.9 percent year over year from $ 28.9 billion to $ 28.3 billion in 2016, though the last five months of 2016 showed positive increases in year-over-year revenues. The number of slot machines decreased in Macau from 14,578 units in 2015 to 13,826 units at the end of 2016, and slot machine revenue followed suit with a 3.1 percent decline.

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