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Regional gaming revenues (excluding new racino markets) only fell 3% in January. A favorable calendar and low gas prices no doubt contributed, but the trend is positive on the margin. As seen in the chart below, comparisons get tougher, but only slightly, until the summer when they ease considerably. Assuming continued depressed gas prices and no further deterioration in the economy, we could actually see some growth in the back of 2009.

Dare I say 2009 consensus estimates are beginning to look reasonable for the first time in over a year? If so, valuations are very attractive for all the regional operators, particularly BYD, PENN, and PNK. Free cash flow yields of 20-40% and EV/EBITDA multiples of 5-6x with numbers one can believe in? Very compelling, indeed.