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European gaming companies lifted by New Jersey license hopesUS-GAMBLING-EUROPE-NEWJERSEY:European gaming companies lifted by New Jersey license hopes
By Keith Weir
LONDON (Reuters) - The prospect of online gambling being legalized in New Jersey sent shares in gaming companies surfing higher on the other side of the Atlantic on hopes that it could unlock a market worth up to $850 million.
Though New Jersey Governor Chris Christie vetoed the bill, he called for only relatively minor amendments that mean it could be passed within a few months.
That would allow casino operators in betting hub Atlantic City to offer online gambling to the nine million residents of |New Jersey, creating opportunities for European operators with experience and technological expertise in the sector.
It also fuelled the hopes of gaming companies that other American states could follow suit and liberalize their gambling laws, though Christie proposed that the New Jersey law, if passed, should be reviewed after 10 years to gauge its impact on problem gambling.
Shares in bwin.party, the world's largest listed online gaming group, soared more than 20 percent on the London Stock Exchange on Friday. Bwin.party has a joint venture with Boyd Gaming, which is licensed in New Jersey.
Rival company 888 Holdings, which is partnered with Caesars Entertainment Corp, saw its shares gain 16 percent.
"We view this as a watershed moment for state regulation of online gaming in the U.S.," Panmure Gordon said in a research note "Operators who are able to establish initial market share will be well positioned for further growth in New Jersey and other regulating states."
Panmure Gordon estimates the size of the New Jersey market to be between $500 million and $850 million.
Hoping to build on its World Series of Poker agreement with Caesars Entertainment Corp, as well as a strategic agreement with leading gaming machine manufacturer WMS, 888 Holdings has high hopes for an uplift from New Jersey.
"While it is still early days, we are very excited by the opportunities that the U.S. market looks set to provide," it said.
Other European companies with experience in the sector could also pounce on a change in the New Jersey law and seek partnerships with the group of about eight companies that operates land-based casinos in the state.
The European operators are looking to focus their activities on regulated markets where they can be certain of their returns.
William Hill, Britain's largest bookmaker with more than 2,300 high street betting shops, has already shown its appetite for overseas expansion, having obtained a license in Nevada, another state with more liberal gaming laws.
Analysts at Citi, however, were cautious on talk of New Jersey leading to wholesale liberalization in the United States.
"Up to eight other states are currently preparing legislation, but attitudes vary, with some states (such as Delaware) aiming to reserve the market for the state lottery and others (such as California) planning only on regulating poker," it said.
(Additional reporting by Neil Maidment; Editing by David Goodman)
Related Keywords:US , GAMBLING , EUROPE , NEWJERSEY