(Reuters) - The prospect of online gambling being legalized in New Jersey sent shares of gaming companies on both sides of the Atlantic surging on hopes it could unlock a market worth up to $1 billion.
New Jersey Governor Chris Christie vetoed an internet gaming bill on Thursday but called on the legislature to make amendments which, if incorporated, would be signed into law.
That would allow casinos in Atlantic City to offer online gaming to the nine million residents of New Jersey and also create opportunities for European companies with expertise in running online gaming operations.
It also fuelled hopes that other American states could follow suit and liberalize their gambling laws, though Christie proposed that the New Jersey law, if passed, should be reviewed after 10 years to gauge its impact on problem gambling.
U.S. casino operator Caesars Entertainment Corp's shares rose for the second straight day to trade up 27 percent at $12.75 on the Nasdaq while Boyd Gaming rose 8 percent to $7.64 on the New York Stock Exchange.
Caesars runs four casinos -- Bally's Atlantic City, Caesars Atlantic City, Harrah's Resort Atlantic City and Showboat Atlantic City -- while Boyd Gaming owns the Borgata Hotel and Casino resort in U.S.'s second biggest gaming destination.
"This would have the biggest impact on Boyd Gaming, who own the Borgata, and estimate it could be worth $3 to shares today. This bill would also be a positive for Bally Technologies Inc, International Game Technology, WMS Industries Inc and Shuffle Master Inc," Janney Capital Markets analyst Brian McGill wrote in a note.
Shares in the UK-based bwin.party, the world's largest listed online gaming group, soared more than 20 percent on the London Stock Exchange. Bwin.party has a joint venture with Boyd Gaming, which is licensed in New Jersey.
Rival 888 Holdings, which is partnered with Caesars Entertainment, saw its shares gain 16 percent.
"We view this as a watershed moment for state regulation of online gaming in the U.S.," Panmure Gordon analysts wrote.
CROWDED MARKET
Estimates for the size of the New Jersey market vary between $500 million and $1 billion.
Janney Capital's McGill said the online gaming market could ramp up to $1 billion in three years.
"Both (Caesars and Boyd) have the capabilities (in-house or through partnerships) to implement platforms quickly, but competition could be high with margins at more modest levels initially," Credit Suisse analyst Joel Simkins wrote in a note.
Hoping to build on its World Series of Poker agreement with Caesars Entertainment Corp, as well as a strategic agreement with leading gaming machine manufacturer WMS, 888 Holdings has high hopes for an uplift from New Jersey.
Other European companies with experience in the sector could also pounce on a change in the New Jersey law and seek partnerships with the group of about eight companies that operates land-based casinos in the state.
The European operators are looking to focus their activities on regulated markets where they can be certain of their returns.
William Hill, Britain's largest bookmaker with more than 2,300 high street betting shops, has already shown its appetite for overseas expansion, having obtained a license in Nevada, another state with more liberal gaming laws.
Analysts at Citi, however, were cautious on talk of New Jersey leading to wholesale liberalization in the United States.
"Up to eight other states are currently preparing legislation, but attitudes vary, with some states (such as Delaware) aiming to reserve the market for the state lottery and others (such as California) planning only on regulating poker," it said.
(Reporting by Keith Weir in London and Siddharth Cavale in Bangalore; Additional reporting by Neil Maidment; Editing by David Goodman and Sriraj Kalluvila)
Source: http://news.yahoo.com/european-gaming-companies-lifted-jersey-license-hopes-134358353--finance.html
fat tuesday obama sweet home chicago accenture match play george washington carver king cake mardi gras fun.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.