A Department of Justice opinion could open the door to more online gambling run by states. News about the opinion sent shares of companies tied to gambling higher, with Wynn Resorts (WYNN) rising 3.4%, MGM International (MGM) up 4.5%. Boyd Gaming (BYD) rose 10%.
On Friday, the DOJ appeared to reverse its previous position on Internet gambling, saying that the online sale of lottery tickets within the state does not violate the Wire Act of 1960.
Roth Capital Research analyst Todd Ellers sees the big casino operators and equipment makers gaining from the opinion:
“We view the ruling as a significant event for the U.S. gaming and lottery industry that essentially opens the door for states to consider offering internet gaming and lottery products (ex sports wagering)…[W]e believe individual state lotteries and vendors like Scientific Games, Gtech, and Intralot will be the first to benefit from selling virtual lottery tickets online. In addition, casino operators w/ strong brands (i.e. Caesars, MGM, Las Vegas Sands (LVS), & Wynn) would also benefit from operating virtual casinos if authorized by enough states. Finally, traditional gaming suppliers like IGT (IGT), Bally Technologies (BYI), WMS Industries (WMS), Aristocrat, and Konami should also benefit from providing game content and/or technology to host online casinos.”
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