In my continuing series of the top 25 stocks for the NEXT 25 years, the next name is Progressive Gaming Corp. (NASDAQ: PGIC). Progressive Gaming is headquartered in Las Vegas, Nevada and sells its products around the world. The stock is at $5.40 and carries a current market capitalization of $210 million. PGIC provides integrated casino and jackpot management solutions to the gaming world. The company has two major divisions: slot and table games and its systems division. The slot and tables division develops, licenses and distributes branded table games like the World Series of Poker, Texas Hold 'Em and Caribbean Stud. The slots part of the division offers branded games such as Garfield, the Beach Boys and many more.

The systems division is a bit more complex in nature. Progressive Gaming has developed an RFID (radio-frequency identification) system to track players habits and gaming successes at the blackjack tables. The chips employed in the betting process are tagged with an RFID chip thus allowing the casino to know in real-time, who is betting at which tables and how much. The system falls under the CasinoLink Enterprise umbrella. The gaming industry is a natural collector of customer information to allow for profit-modeling on a per customer basis. PGIC has the patented products to supply the casinos with a soup-to-nuts solution.

The beauty of the model for PGIC is the recurring revenues. Once a blackjack table has been retrofitted for about $5000, PGIC collects a daily royalty based on usage of the table and the RFID-tagged chips. The margins on this are enormous and highly profitable. The casino-based slot machines are also on a recurring revenue model.

On the slot machine side of the company, PGIC products allow for the casino to manage the slot-machines from a central-server, changing the theme of any machine on the fly. The new slot machines are basically $1000 dumb-terminals requiring minimal maintenance versus the traditional slot-machine costing upwards of $12,000 and requiring extensive service and maintenance. With PGIC's solutions, casinos are able to place these dumb terminals in strategic locations within the casino, run the game from the central-server, change the game on the fly, while PGIC collects a daily royalty for its software-driven products. A win-win for the casino and PGIC. The odds, however, cannot be changed or altered.

PGIC was a hardware-based company until three years ago. New management migrated the company to a pure software-driven model and margins are set to expand enormously over the ensuing years. PGIC sells into 21 North American jurisdictions and 33 foreign countries. The high barrier to entry makes the business even more valuable. All vendors have to pass the supervising jurisdictions' strict rules and regulations and be approved by a state or country gaming commission to sell to any casino operator. PGIC has all major approvals in hand.

With the gaming industry searching for high tech solutions to maximize both customer loyalty and profits, Progressive Gaming is positioned to grow into a large company. The revenue base for 2007 is about $80 million and growing to about $110 million next year. The company has spent the last three years unloading all the old legacy hardware business and converting to the software model. The new management is in the midst of retiring and restructuring all the debt it inherited from the hardware days.

With cutting-edge technology, solid worldwide gaming/casino relationships in place and the overall growth of the gaming industry, Progressive Gaming is poised to become a major player and one of the the top 25 stocks for the NEXT 25 years.

Georges Yared is the CIO of Yared Investment Research where he explores more growth stock ideas.