European Firms Ready for Online Gambling in the US

\European Firms Ready for Online Gambling in the USIn February New Jersey became the third state to legalize online gambling along with Nevada and Delaware. Legalization has the potential to open up new very lucrative markets for gaming companies and in Europe gaming company executives are ready to cash in on the American interactive gaming market. After several years of federal restrictions on internet gambling New Jersey Governor Christie signed a bill allowing online poker and casino games. Unlike Nevada New Jersey and Delaware plan to offer players a variety of games in addition to poker including online bingo, blackjack, keno, roulette, slots and many other casino and table games.

For interactive gaming firms in Europe the turnaround in the United States has been big news. Several European firms have announced partnerships with American casino operators. Recently Gibraltar based 888 Holdings became the first company to receive an interactive gaming license in Nevada. 888 has formed a partnership with Caesar’s Entertainment to operate poker games using Caesar’s brand. A spokesman for 888 Holdings told reporters “The potential for the U.S. gaming market is huge. 888 is able to offer bricks and mortar casinos with the perfect platform to launch their brand online, once all regulations are in place.”

Prior to 2006 888 made about half of its money in the United States but withdrew from the American market after federal laws were passed making online gambling illegal. The strategy paid off and thanks to the fact that 888 avoided any conflict with authorities in the US the company was in a perfect position to take advantage of legalization. In addition to Caesar’s 888 has deals with WMS gaming and Avenue Capital. Fellow European internet gaming company Bwin.party has agreements with MGM and Boyd Gaming. William Hill, based in the UK, is in the midst of making a deal to purchase Playtech, its joint venture partner.

Interactive gaming stocks have also been in the news. In a research note to investors Panmure Research said of 888 Holdings “The group is well positioned in the U.S.” Panmure was more bullish on bwin.party and maintains a “buy” rating on the company’s stock. In a research note written after news of New Jersey Governor Christie signing the internet gambling bill Citi wrote “Although Nevada and Delaware have both passed online gaming regulation, (New Jersey) is a key state given its size and the fact that it has permitted casino as well as poker. California will probably be the most important state to watch in the medium term although we don’t expect regulation to be passed before (year-end 2014). Seven other states also have ongoing draft regulation.”

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