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One of the big issues here with Multimedia Games (NASDAQ:MGAM) has always been competition. Now David Bain of Merriman Curhan Ford, without question the bull's bull on the maker of equipment for Indian casinos, says his channel checks "yielding indications of risks in the company's gaming markets that were more significant than previously thought." As a result, he sliced his rating to neutral.

His reasons are almost point-for-point the reasons bears have given for remaining bearish on this company, even after flopped from their highs two years ago:

Chickakasaws are contemplating a new casino to adjacent to the Winstar casino financed by Multimedia, giving MGAM a guaranteed fixed percent of the win per day: ..."Obviously, if built, the win-per-day would decline at Winstar, impacting Multimedia's revenues from the facility." Especially if Multimedia isn't financing, which effect is its own version of pay to play.

Oklahoma, its biggest market: "...organic market share decline and patron dollars flowing to competitor games."

New York lottery: "...We believe other vendors may aggressivley attempt to get involved..."

Mexican bingo: "...timing of the roll-out of games and potential win-per-day, per device in Mexico may be less than we had hoped for -- at least in the near term."

The beat goes on...