Analysts Bet on US Gambling Market

Published on: January 27, 2011 

According to research done by Daniel Stewart Analyst, Michael Campbell, Playtech and Party Gaming has the greatest chance of landing business-to-business deals in a potentially lucrative US online gambling market.

On Monday, 24th January, 2011, Campbell highlighted the potential for a legislative u-turn and the re-opening of a once lucrative market after online gambling was controversially banned in the United States in 2006.  A lot has changed since 2006 with new laws being considered with both federal and state governments struggling to deal with the fall-out from the financial crisis.

Campbell added that due to the recession, bricks and mortar casinos have suffered immensely and are therefore now looking for new ways to generate income.

It was also felt that with the United States moving fast in the direction of online gambling licensing and regulation that certain companies are worth buying into as their stocks should rise significantly as a result of the changes in the US gambling market.

According to Daniel Stewart and Co. Playtech and Party Gaming who currently face European markets will be the biggest winners of the change in legislation.  The company issued a report urging investors to buy stock in Playtech and Party Gaming as in their view they have the greatest chance of landing B2B deals in the United States market.

The company is, however, less optimistic for 888 Holdings and recommended that investors sell 888 stock due to the fact that the group has not yet settled with the US Department of Justice for providing gambling services to US Citizens prior to the introduction of the Unlawful Internet Gambling Enforcement Act in 2006.

The Unlawful Internet Gambling Enforcement Act (UIGEA) made the online gambling and casino industry illegal by preventing money transfers from any American financial institution to online gambling websites.  This resulted in the market being hit very hard with the entire sector losing a large proportion of their valuations.

Five years later, the US legislature is looking at ways to reopen the potentially lucrative industry.

The report predicts that gambling companies will be able to start applying for licenses as early as the second half of this year or by early 2012 and that it is their view that online gambling will move ahead whether legislative change happens at Federal or State level or a combination of both.

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