Stock Prices Up

Analyst: US Online Gambling Will Drive Industry Stock Prices Up

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New Jersey has started the ball rolling for US online gambling regulations, and stock analysts are starting to take note of what soon could become a trend in the US. A note to clients today from Daniel Stewart analyst Michael Campbell suggested that rises in prices may be coming soon.

In the note, Campbell referenced New Jersey and California as states that have made progress towards online gambling regulations. If that trend spreads, companies such as PartyGaming, Playtech, and other top foreign gaming providers would be most likely to gain some of the licenses.

“Poker may be the only product vertical to pass at Federal level, however we believe that individual states will legalize online casino and poker at state level,” read the note, “with New Jersey and California leading the way, we believe will cause a tipping point, whereby other states will follow.”

The idea of increased regulations in the US has become a popular one across the board by stock analysts. If the US market is opened up, online gaming companies stand to increase their revenues by hundreds of millions of dollars annually. Campbell expects that this change will take place in the latter part of this year or in early 2012.

The US is already considered the top online gaming market in the world. Many European companies pulled out of the market after the Unlawful Internet Gambling Enforcement Act was created back in 2006. PartyGaming was one of those companies, and they have since settled a legal dispute with the US, positioning themselves to re-enter the market should regulations be put in place.

Campbell was not as high on other gaming stocks outside of Playtech and PartyGaming. It has been rumored that 888 Holding’s would be one of the companies to gain consideration for licenses in the US, but Campbell feels they first must meet US Department of Justice settlement agreements.