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New Jersey Governor Chris Christie signing a bill that would legalize online gambling in the state gave publicly traded casino and bookmakers a much needed boost.
Zynga, which plans to offer “real money” Web poker by year’s end or early 2014, witnessed a 3 percent rise on top of a 15 percent increase witnessed over the past week. The world’s largest free-to-play online poker company has been on a roll ever since Nevada legalized interstate Web gambling last week.
Casino giant Boyd Gaming, which is hoping to enter the online fray, posted a 7 percent increase in its shares early Wednesday.
The European Internet gambling firms posted significant increases as well with bwin.party seeing as much as 15 percent to 158 pence, leading advancing stocks on the FTSE All-Share Index. It was up 13 percent just before Noon London time. About 4.2 million shares traded, or 35 percent more than the daily average in the past three months.
Bwin.Party has partnership agreements with Boyd Gaming Corp. and MGM Resorts International to offer Internet gambling in the US.
888 was up 9.25p to 159.5p in Wednesday’s trading. That firm has entered into a partnership deal with Caesars Interactive, parent company of the World Series of Poker.
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Morgan Stanley raised its target price for Bwin from 160p to 200p and for 888 from 140p to 175p following Christie’s signing the Web gambling legislation into law.
Morgan Stanley Analyst Vaughan Lewis said:
New laws in New Jersey mean online gambling should launch in 9-12 months. We think 888 and Bwin.party will be among the winners here, and increase our 2015 earnings per share forecasts by 24% for 888 and 5% for Bwin.party. Longer-term implications are more positive, as the world's largest gambling market opens.
We expect European operators to be involved as suppliers and partners. The law restricts the online gambling market to the 8 existing casino licensees. With limited operational knowledge in the US, we expect most operators to enter into partnerships and software agreements. This should benefit industry leaders with proprietary technology, such as Bwin.party and 888.
New Jersey is small…but the longer-term impact could be significant. The US is the largest single gambling market in the world, and we see long-term potential worth up to 460p per share for 888 and 560p per share for Bwin.party.
- Aaron Goldstein, Gambling911.com
