The world’s largest free-to-play online poker company announced in after hours Wednesday that it had applied for a license to operate real money online poker with the state of Nevada.
Thursday, stocks shot up to 5 percent by mid afternoon Thursday.
Analysts remained cautious regarding the news nonetheless.
"We really looked at it on a global basis, and there just are not a lot of countries where online gambling is legal, and there are a few states," said Ken Sena, an Internet analyst at Evercore Partners, in an interview with CNBC Thursday. "And where it is legal, it tends to have punitive taxes and it tends to favor sort of the brick-and-mortar legacy casinos because they provide more jobs and more tax revenues, so we see this as a long shot."
Sena said he has a $1.70 price target on the company's shares along with an "underweight" rating.
"There is the potential for more value there so I'm not necessarily saying that this a short, but we still do continue to see this as sort of a risky bet so we are underweight on it," he added.
- Aaron Goldstein, Gambling911.com