The slot floor at the Golden Pelican on a quiet Tuesday. The machine on the right is the one that paid out while falling over.Photo: Golden Pelican Holdings
Shares in Golden Pelican Holdings rose 2.4% on the Palmetto Bay exchange on Tuesday after a rumor, started in a parking lot and amplified by a man with a newsletter, that the casino's slot machines are rigged.
The rumor did not specify in whose favor. Investors assumed the house. Gamblers, interviewed on the floor, assumed the house too, and kept playing, "because where else would I go, the bank?"
How a rumor becomes a rally
The rumor began at 10:15 a.m. PBT, when a man in the Golden Pelican parking lot told a second man that "they've got the machines set tighter than a drum." The second man writes a newsletter, "Pelican Money," with 4,100 subscribers, and sent an alert at 10:22. The LSX opened at 10:30. By 10:31 the stock was up.
Golden Pelican Holdings issued a statement at noon saying its machines are "regularly inspected" and "pay out exactly what the law requires," which analysts noted was "not a denial of being tight, just a description of being legal."
"If the machines are rigged, that's margin. If they aren't, that's a rumor we can't be sued for. Either way, we're buying."
— Trader, speaking from the LSX floor, who asked us not to use his name "in case the machines hear"
The LSX board at 14:02 PBT. The pelican is not a listed company, yet.
The slot that paid out
Not helping the rumor is last Thursday's heist, during which a slot machine knocked over by the departing crew paid out a jackpot as it hit the floor. The casino says the payout was "a coincidence of gravity." The newsletter says it proves the machines "only pay when they're upside down."
The machine has been righted and has not paid out since, which the newsletter also says proves it.
What the regulator says
The Palmetto Bay Gaming Board told Wazel News it has "received the rumor" and will "test the machines in the usual way," which involves an inspector playing each one for an hour with board money. Last year's inspection took eleven days and the inspector came back up $40.
Golden Pelican closed at a six-month high. The man in the parking lot could not be reached, as he was, by the end of the day, inside.