Bwin.party Shares Soar on News of MGM, Boyd Partnership But Caution Advised

While shares in Bwin.party have soared in recent days with news that the company has joined forces with powerhouse casino brands MGM and Boyd Gaming to offer online poker to US residents once legislation is passed in the States, some analysts have advised caution.

Share prices rose 11p at 120.7p following the news.  The companies have entered into a long term 15-year deal. 

“This is a potentially huge long-term deal that, along with bwin.party’s excellent European assets and brands, supports our bull stance. Short-term risk remains over changes to German legislation, but we think this is priced in and the shares are good value on current estimates.” Said James Hollins of Evolution Securities.

Paul Leyland at Investec was a bit more cautious with his assessment. “We would not get carried away for three reasons. One, legalisation of poker is still likely to take some time and bwin.party’s ‘suitability’ is not guaranteed. Two, a US regulated poker market is likely to be far less lucrative than historical ‘.com’. Three, medium-term performance should still focus on Europe.”

- Aaron Goldstein, Gambling911.com