Gaming Stocks Soar After New Jersey Legalizes Online Gaming
When New Jersey Governor Chris Christie signed a bill legalizing online gambling in the Garden State this week, poker players celebrated. Perhaps more relieved that intrastate gaming is on the way were the Atlantic City casinos, which have been struggling in recent years, especially as customers have been opting to play at venues in neighboring states. While it will still be quite some time before casinos will see any revenue from online gaming, financial markets have already begun to give the industry's firms a boost.
Two companies that will be the most affected by the launch of internet gambling, assuming they apply for and are granted licenses, are Caesars Entertainment and Boyd Gaming. Caesars owns Showboat, Bally’s, Caesars, and Harrah’s in Atlantic City, while Boyd owns the famed Borgata. Those two firms know they have a lot to gain by getting involved in online gaming and both are already getting geared up across the country in Nevada, where they have been granted online poker licenses.
Both publicly traded companies saw their stocks perform well after Christie signed the gambling bill. Caesars opened at $10.80 per share on Monday and closed at $12.13, a gain of 12.3%. It opened even higher on Tuesday, starting the day at $12.50, but settled back down to only slight gains from the day before, closing at $12.18.
Boyd actually closed down slightly the day of the bill’s signing, falling from $6.53 to $6.50, but it jumped up 3.4% on Tuesday to $6.72.
Caesars spokesman Gary Thompson was quoted in a Reuters article as saying, “We think [online gambling in New Jersey] is going to be beneficial not only to our company and other operators, but it will also help expand and possibly reinvigorate the market by introducing games to potential new customers.”
Overseas gaming firms that might be able to get involved as technology partners saw their stock prices helped as well. 888 Holdings, which has already partnered with Caesars in Nevada, was up just a tick on Monday, but saw a nice boost Tuesday, opening at 152.25 pence and closing at 162.75 pence, a rise of 3%.
bwin.party, parent company of PartyPoker and part of a joint venture in Nevada with Boyd Gaming and MGM, saw its shares go up on Tuesday as well. After opening at 141.60 pence per share, it climbed 8.4% to 150 pence.
Of the above companies, only Caesars has kept its gains going, closing Thursday at $12.52 per share. Boyd is back down to $6.57, 888 has dropped to 152.96 pence, and bwin.party has fallen a bit to 148.10 pence.
Another company that could stand to benefit from the legalization of online gambling in New Jersey is the social gaming giant Zynga. Despite being the creator of many of the most popular games on Facebook, Zynga has struggled massively in the financial markets.
Zynga went public on December 16, 2011, opening at $11 per share, but has gone downhill almost from the very start. It closed as low as $2.10 in November, but has rebounded slightly this month, closing Thursday's trading at $3.39. Its stock price wasn’t affected much by the New Jersey news, but as it has been readying itself for legal online gaming, it will likely try to join the fun as soon as it can. It has already partnered with bwin.party in the U.K., getting set to offer real money bingo in the first half of this year.
When New Jersey Governor Chris Christie signed a bill legalizing online gambling in the Garden State this week, poker players celebrated. Perhaps more relieved that intrastate gaming is on the way were the Atlantic City casinos, which have been struggling in recent years, especially as customers have been opting to play at venues in neighboring states. While it will still be quite some time before casinos will see any revenue from online gaming, financial markets have already begun to give the industry's firms a boost.
Two companies that will be the most affected by the launch of internet gambling, assuming they apply for and are granted licenses, are Caesars Entertainment and Boyd Gaming. Caesars owns Showboat, Bally’s, Caesars, and Harrah’s in Atlantic City, while Boyd owns the famed Borgata. Those two firms know they have a lot to gain by getting involved in online gaming and both are already getting geared up across the country in Nevada, where they have been granted online poker licenses.
Both publicly traded companies saw their stocks perform well after Christie signed the gambling bill. Caesars opened at $10.80 per share on Monday and closed at $12.13, a gain of 12.3%. It opened even higher on Tuesday, starting the day at $12.50, but settled back down to only slight gains from the day before, closing at $12.18.
Boyd actually closed down slightly the day of the bill’s signing, falling from $6.53 to $6.50, but it jumped up 3.4% on Tuesday to $6.72.
Caesars spokesman Gary Thompson was quoted in a Reuters article as saying, “We think [online gambling in New Jersey] is going to be beneficial not only to our company and other operators, but it will also help expand and possibly reinvigorate the market by introducing games to potential new customers.”
Overseas gaming firms that might be able to get involved as technology partners saw their stock prices helped as well. 888 Holdings, which has already partnered with Caesars in Nevada, was up just a tick on Monday, but saw a nice boost Tuesday, opening at 152.25 pence and closing at 162.75 pence, a rise of 3%.
bwin.party, parent company of PartyPoker and part of a joint venture in Nevada with Boyd Gaming and MGM, saw its shares go up on Tuesday as well. After opening at 141.60 pence per share, it climbed 8.4% to 150 pence.Of the above companies, only Caesars has kept its gains going, closing Thursday at $12.52 per share. Boyd is back down to $6.57, 888 has dropped to 152.96 pence, and bwin.party has fallen a bit to 148.10 pence.
Another company that could stand to benefit from the legalization of online gambling in New Jersey is the social gaming giant Zynga. Despite being the creator of many of the most popular games on Facebook, Zynga has struggled massively in the financial markets.
Zynga went public on December 16, 2011, opening at $11 per share, but has gone downhill almost from the very start. It closed as low as $2.10 in November, but has rebounded slightly this month, closing Thursday's trading at $3.39. Its stock price wasn’t affected much by the New Jersey news, but as it has been readying itself for legal online gaming, it will likely try to join the fun as soon as it can. It has already partnered with bwin.party in the U.K., getting set to offer real money bingo in the first half of this year.
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