The online gambling industry’s long-held hopes for a regulated US market received a shot in the arm after New Jersey decided to press ahead with legalising online poker and casino.
European gaming stocks surged on Friday after the state’s Republican governor Chris Christie said that, despite vetoing a bill to legalise online gambling, he was prepared to sign an amended version. These amendments include provisions for a 10-year trial period, an increase in the tax rate on online casino winnings from 10 per cent to 15 per cent and greater player protection.
The Garden State will work with bricks-and-mortar casinos that have longstanding licences. But these companies require the expertise of predominantly European online operators to provide the actual games to New Jersey residents online.
“Now is the time for our state to move forward, again leading the way for the nation, by becoming one of the first states to permit internet gaming,” said the governor, whose state includes the depressed casino centre Atlantic City.
Nick Batram of Numis said Mr Christie’s move was a significant step in lobbyists’ attempts to create a US online gambling market.
“If Christie does pass an amended bill [which now looks more likely than ever], this would be an important development for the US online gaming market as a whole,” he said.
The bill allows established casinos and racetracks to offer online poker and some casino games in New Jersey, which has a population of 8.9m.
Several European-based gambling and gambling-related companies have been steadily building joint ventures in the US with casino operators and other legal gambling entities in readiness for a shift in the US egulatory landscape.
888 Holdings has a joint venture with Caesars, which has four casinos in Atlantic City, under which it would provide casino and poker products to Caesars, which would then market these games to customers. 888 also has a strategic alliance with gaming machine manufacturer WMS.
Bwin.party has similar relationships with MGM and Boyd Gaming. Optimal Payments has a deal with Caesars to provide payment services.
In Friday afternoon trading, 888 shares were up 15 per cent and Bwin.party by 16 per cent. Optimal Payments’ share price rose 9 per cent.
Other gambling companies made smaller gains, including Playtech, the online gambling services provider – up more than 7 per cent – and William Hill, which has a licence from the Nevada gaming commission, up 1.4 per cent.
Analysts said an amended bill could be passed by the end of next month, leading to an online gambling market in operation by the end of 2013.
While Mr Batram said it was unclear what benefits could emerge from a regulated New Jersey market, he said that “perhaps the biggest value is in the fact that a major state is prepared to legislate positively for online gaming and that, where New Jersey goes, others will follow”.
Ivor Jones of Numis said the move could encourage Federal legislators to pass a law in an effort to control the development of online gambling nationwide.
Gibraltar-based 888 said: “While it is still early days, we are very excited by the opportunities that the US market looks set to provide.”