Income fluctuations in the gaming industry

Progressive Gaming International Corporation one of the biggest providers of content products and services worldwide used in the gaming industry, lost around $14.4 million last year, including charges of $4.4 million, connected to the division, transfer and provisions for some of legal and tax matters and around $1.2 million for stock compensation expense resulting from the implementation of FAS 123R.

The company had a serious fluctuation of profits all because of a lower licensing revenues and slot/table revenues. Gaming executed a $2.0 million license transaction for its sports wagering systems, but the revenues weren’t recognized until payment was received.

Due to the new installations of Casino Link (the first software solution for casinos which centralizes gaming management across all casino properties-for dramatically improved efficiency, tighter security and surveillance, and lower costs) in international jurisdictions, the system revenues increased, along with the demand for progressive jackpot and mystery systems products.

But, in spite of the new Casino Link Jackpot System (CJS), Intelligent Table System (TM) (ITS) and central-server based gaming products, Progressive Gaming International Corporation has gained only modest revenues.

Why? Because of the timing issues relating to regulatory approvals. Is clear that the installation of these products is expected to drive more growth in system revenues. Slot and table incomes increased due primarily to an improved installed base of Texas Hold 'Em Bonus(TM) poker / World Series of Poker.

The European Union's adoption of the Restriction of Hazardous Substances in electronic equipment initiative changed the perspectives of the gaming industry. Russel McMeekin, President and CEO of Progressive Gaming said that they have contracts and planned installations of over 1,000 table games for major gambling operators, project that will truly develop in late 2007.

He sustained that on the CJS front, customer reaction on installations has been outstanding with many of the casinos experiencing income growth of up to 3 times on slot games pre-CJS installation levels.

The future strategy of Progressive Gaming is to establish the right business partners and customers, associating with Cantor Gaming, a subsidiary of Cantor Fitzgerald, for mobile gaming.