Risky business: Caesars exec bets on online gaming

Confident in NJ internet gambling: Caesars CEO

Mitch Garber wants investors to put their money on online gamblingthat is if the industry can outmaneuver casino mogul Sheldon Adelson and spread to more than three states.

Garber, the CEO of the newly public Caesars Acquisition Co. (which includes interactive ventures), must contend with the clout of the billionaire Las Vegas tycoon, who spoke to the Washington Post this week about his campaign to ban Internet gaming.

But the Caesars executive remains optimistic that more states will legalize the practice, in particular New Jersey, which plans a test run.

"We look at it as the second domino wave of gaming," he said Thursday on "Squawk on the Street." "It started with Nevada and New Jersey with real, land-based gaming. This is the online version of that. Nevada first and New Jersey second. Other states come one at a time."

(Read more: Why New York casinos could crush Atlantic City)

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The Garden State will launch a five-day test at 6 p.m. Thursday. If it works, the state will join Nevada and Delaware as the only states that allow online gambling. California, Pennsylvania and Massachusetts have online gambling bills pending.

Despite the small number of states that have legalized it, Garber remains bullish on the online gambling industry, which he valued at $6 billion to $9 billion.

"Growth could have been massive online here if we got a federal bill," he said. "It's going to be a little bit slower going state-to-state, but this is a big business."

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Caesars Acquisition was recently spun off from Caesars Entertainment, the nation's largest casino owner, and allows investors a chance to get into the Internet action.

Garber said that potential growth of online gaming shouldn't hurt the parent company's brick-and-mortar casinos. Instead, he said, its popularity will spur interest in gambling in general—much like what Texas Hold' em did for Las Vegas card rooms.

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"It's been proved for a long time, in the U.K. and Australia, that online gaming does not cannibalize offline gaming," Garber said.

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street." Reuters and the Associated Press contributed to this report.