New Jersey Endorses Online Gaming: 3 Actions to Benefit
Zynga could benefit, in large part from its popular Texas Hold ‘Em app, “Zynga Poker”. Last June, “Zynga Poker” had 30 million average monthly users, according to Mike Gupta, then the company’s treasurer and vice president of finance. Gupta also told TheStreet that online gambling is on the company’s radar.
“It’s something that we are exploring,” he said. “We think it’s an interesting adjacency to what we do in our core business.”
Traditional casino operators will benefit, some more than others, according to Credit Suisse analyst Joel Simkins. Simkins cited Boyd Gaming and Caesar’s Entertainment as two names that would benefit.
“Depending on how it’s sliced, online gaming in New Jersey could represent a market of $ 250 million to $ 500 million and although we believe the two companies have the capabilities (internally or through partnerships) to put Implementing platforms quickly, the competition could be high, with margins starting at more modest levels, ”Simkins wrote in a Feb. 7 research note.
David Bain of Sterne Agee also cited Boyd Gaming as a beneficiary, in large part due to his presence in Atlantic City. Boyd, with MGM Resorts, is the owner of the Borgata Hotel Casino & Spa. The analyst, who deems Boyd’s actions “neutral”, however, tempered optimism about the gaming space as a whole.
Caesar’s (formerly Harrah’s Entertainment) has some exceptionally strong brands, including the World Series of Poker, which could play well with social games.
Hedge fund manager John Paulson cited Caesar’s potential for online gambling at the Ira Sohn investment conference last year.
Zynga shares were higher on Wednesday morning, up 2.98% to $ 3.46, while Boyd and Caesar’s shares jumped 6.46% and 4.37% to $ 6.92 and 12 , $ 66, respectively.