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Low gas prices and especially the removal of the $500 loss limit more than offset the awful consumer environment and some very bad weather. ASCA, PNK, and PENN are the primary beneficiaries of the Missouri strength. These stocks have been strong as of late so some of the good news was anticipated. However, I am very encouraged by the relative recent strength of the regional markets, not just Missouri but Iowa, Indiana, and the racino markets such as Pennsylvania.

Pure gaming revenues are less discretionary than most consumer industries and are more sensitive to changes in gas prices. These traits are advantageous in this environment. Given the data, estimates are starting to look reasonable for some of the regional operators including BYD, PNK, and PENN. PENN recently provided 2009 EBITDA guidance in-line with the usually stale sell side estimates. That was a positive. Considering the incredibly depressed valuations, growing visibility on revenues and EBITDA could continue to drive some of these stocks towards more reasonable valuation levels.