Reuters  Apr 22  Comment 
* Entertainment Gaming Asia inc.'s Dolphin products subsidiary enters into binding letter of intent to sell its assets to gaming partners international corporation
Benzinga  Oct 6  Comment 
Below are the top gaming activities stocks on the NASDAQ in terms of earnings per share. The trailing-twelve-month earnings per share at Churchill Downs, Inc. (NASDAQ: CHDN) is $2.43. Churchill Downs' ROE for the same period is 5.90...
TheStreet.com  Dec 3  Comment 
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.  TheStreet Ratings quantitative algorithm...
SeekingAlpha  Jun 28  Comment 
ByValueArtifex: Playing Your Cards Right If you have been following my articles you will notice that I am attracted to companies that occupy an advantageous position in the supply chain. A perfect example of my "Bottle Neck Theory" is...
StreetInsider.com  Mar 13  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/Gaming+Partners+International+%28GPIC%29+to+Acquire+GemGroup+/9280796.html for the full story.
StreetInsider.com  Nov 11  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/Gaming+Partners+International+Corp.+%28GPIC%29+Misses+Q3+EPS+by+17c/8868944.html for the full story.


Gaming Partners International (NASDAQ:GPIC) makes gambling chips - the stand-ins for currency used at most casinos - along with other gambling equipment such as dice, wheels, playing cards, table layouts, and furniture. GPI sells its products directly to casinos. The company earned $49.5 million in revenue and $1 million in net income in 2009.[1]

The company has been a major beneficiary of the growth of Macau, Asia's rapidly growing gambling capitol. Because most of GPI's products have a useful life of several years, the company's growth is driven in large part by the physical expansion of the gaming industry. Most of its new product sales occur when it acquires new customers or when existing customers build new casinos.

RFID chips are the other area of growth for GPI. GPI holds a license that provides the exclusive right to manufacture and distribute RFID gaming chips and readers in the USA. GPI also owns international patents related to the process of embedding RFID components into gaming chips. RFID chips have built-in radio components that allow a computer to automatically keep track of the chips on the table. From a security perspective, this greatly increases the difficulty of counterfeiting chips. This technology also adds value by relieving casino personnel from the work of detecting problem gamblers, card counters, or good customers who deserve free drinks. These are areas of considerable expense for most casinos.

Analysts also believe that adoption of RFID chips will increase as price continues to decline due to advances in technology. GPI is also innovating on the hardware side by releasing chips that respond to higher-frequency radio waves (13.56 Mhz instead of 125 Khz) so they can be read faster and in larger stacks.

Company Overview

GPI operates in two primary divisions: GPI-USA, which sells directly to casinos in the USA and Canada, and GPI-SAS, which markets to foreign casinos - largely in Europe and Asia. GPI's largest brands are Paul-Son, Bud Jones, B&G, and T-K.

Casino chips comprise over 60% of GPI's sales, but these are inherently durable products. Thus, external factors such as the opening of new casinos, the expansion of existing casinos, and the replacement of chips, have a profound influence on GPI's revenue.


  • Gaming Chips (66% of revenue) - Gaming chips act as the currency of the casinos for traditional table games. The breadth of the company's gaming chip product line allows it to offer the most complete array of configurable options within the industry. A new casino order will typically include at least five to seven distinct chip denominations, colors and styles, ranging in denominations from $0.50 to in excess of $1 million. The company sells American-style casino chips (clay chips), European-style Casino chips (jetons and plaques), and RFID chips.
  • Table Layouts (9% of revenue) - The company makes table layouts for casinos in North America. All live gaming tables are covered with a layout printed with artwork particular to each specific game and casino preference.
  • Playing Cards (9% of revenue) - GPIC manufactures and sells two lines of paper casino playing cards under the Paulson® brand.
  • Gaming Furniture (6% of revenue) - the company sells a variety of furniture including tables that can integrate with any third party casino equipment.
  • Table Accessories and Other Products (5% of revenue) - include roulette reader boards, foot rails, chip trays, and drop boxes.
  • Dice (3% of revenue)
  • Themed Products

Business Growth

FY 2009 (ended December 31, 2009)[1]

  • Net sales fell 18% to $49.5 million.
  • Net income fell 77% to $1 million.

Trends and Forces

Growth of the Gaming Industry

GPI's products have long replacement cycles, with its chips and gaming furniture lasting 5 years or longer and its table layouts lasting 60-150 days. Thus, GPI requires a healthy flow of new customers in order to grow revenue. Since GPI sell its products to casinos, GPI relies on the growth of the gaming industry. The gaming industry itself is affected by tight regulation and varying degrees of social acceptance. The fastest growth is expected to come from Asia, which is estimated to grow gambling revenues 15.7% annually through 2011.[3] Much of Asia's gambling growth is coming from Macau (see Macau Tourism), where operators predict they can double the number of Macau casinos to 50 by 2011.

Popularity of Table Games

GPI's products, such as chips, table layouts, and playing cards are used exclusively at table games. If the gaming industry thrives but were to switch away from table games toward alternatives like slot machines, video poker, or sports betting, GPI would suffer decreased demand. Online gambling may also be viewed as a competitor to casino's table games. While the U.S.'s Unlawful Internet Gambling Enforcement Act has significantly dampened the ease with which U.S. gamblers can play online, the online sector is growing quickly in other countries around the world.[4] In GPI's favor, some analysts expect casinos to shift their space toward tables games and away from slot machines, which appealed more to the baby boomer generation and less to the incoming generation of gamblers.

Success of RFID Casino Chips

GPI's greatest innovation in recent years has been the RFID chip, which adds security to casinos' currency and additionally relieves casinos from some of the tedious work related to rewarding good customers for their business and kicking out bad customers like card counters. Casino losses to counterfeit chips are minor. However, casinos overspend by 20-30% on the perks they give to good customers, leaving a wide margin in which computer software could improve on the otherwise manual process. The company holds a license giving it the exclusive right to manufacture and distribute these casino chips in the United States. The acceptance of the U.S. gaming industry (and indeed the global gaming industry) to pay nearly double for these high-tech chips, would significantly increase revenues and operating margins. Currently, casinos are still slow to adopt the RFID technology because of cost and customer privacy concerns, though many new casinos are investing in the technology.[5]


GPI competes against other large casino equipment companies across the globe. GPI is unique in that it sells a full gamut of casino supplies while other companies produce only a subset of GPI's offerings.

In the U.S. market,

  • Chipco International produces casino chips
  • US Playing Card Company competes in playing cards and gaming furniture
  • Gemaco Playing Card Co. makes table layouts and playing cards
  • Midwest Game Supply Co. manufactures dice and table layouts

In the Asian market,


  1. 1.0 1.1 GPIC 2009 10-K "Selected Financial Data" pg. 12
  2. GPIC 2009 10-K "Product Segments" pg. 1-4
  3. Gambling Revenue Climbs to 144 Billion
  4. Internet Gambling Industry Growth to Reach $528 Billion by 2015
  5. Vegas Casino Bets on RFID
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