Atlantic City casino shares gain on NJ nod for online gambling
Feb 27 (Reuters) - The legalization of online gambling in New Jersey sent shares of Caesars Entertainment Corp and Boyd Gaming Corp higher, on expectations that this will revive business in Atlantic City, the second-biggest U.S. gaming destination.
New Jersey Governor Chris Christie on Tuesday approved online gambling for the state's 9 million residents in a bid to boost state revenue and regain customers who have chosen to gamble in Pennsylvania and New York.
Shares of Caesars Entertainment, which runs four New Jersey casinos -- Bally's Atlantic City, Caesars Atlantic City, Harrah's Resort Atlantic City and Showboat Atlantic City -- Jersey rose 4 percent to $12.62 at the Nasdaq open on Wednesday.
Shares in Boyd Gaming, which operates the Borgata Hotel and Casino resort, rose 3 percent to $6.70.
The two companies together account for more than 60 percent of Atlantic City's gaming revenue.
There was cheer online gaming companies two, with bwin.party and 888 Holdings jumping on hopes for a new opportunity in a market analysts say is worth $1 billion.
Shares in the UK-based bwin.party, the world's largest listed online gaming group, were up 7.6 percent at 148.3 pence in afternoon trading on the London Stock Exchange.
It was one of the top gainers on Britain's mid-cap FTSE 250 index, double its 90-day daily average.
Shares in rival 888 Holdings, a partner with Caesars Entertainment, rose 5.5 percent to 158.5 pence.
Shares of social gaming company Zynga Inc, which is seeking a New Jersey online gambling license, rose 2.5 percent to $3.45 on the Nasdaq.
"New Jersey has effectively legalized online casino and poker," Citi said in a note, upgrading bwin.party to 'neutral' from 'sell', while analysts at Daniel Stewart maintained their 'buy' rating.
Deutsche Bank estimates that the New Jersey online gambling market could be worth $250 million in its first full year of operation, likely boosting bwin.party's earnings before interest and tax (EBIT) by $8.5 million in 2015.
(Reporting by Siddharth Cavale in Bangalore)