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US Online Gambling Regulation Will Improve Stock Market

Posted on February 12th, 2011

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Stock analysts are keeping a keen eye on what could become a major US trend, predicted to be pioneered by New Jersey—the regulation of online gambling. Daniel Stewart analyst Michael Campbell suggested in a note to clients that prices may increase soon. According to surveys, more and more people show increased interest on gambling, this is due to the introduction of online gambling. Campbell indicated in the note that New Jersey and California have made significant progress in online gambling regulations. With New Jersey and California as a starting point, local and foreign gaming providers would most likely gain some of the licenses.

Companies such as PartyGaming and Playtech, which have established their operations in other countries are among those rumored to step forward and be awarded trade exclusivity. Furthermore if the UIGEA is amended, US-based online gambling companies will no doubt rise up to the forefront to compete. “Poker may be the only product vertical to pass at Federal level, however we believe that individual states will legalize online casino and poker at state level,” read the note, “with New Jersey and California leading the way, we believe will cause a tipping point, whereby other states will follow.”
Michael Campbell, an expert analyst on the subject matter, has high expectations that the online gaming industry will boost annual revenues up by the millions. Stock analysts are hopping in on the online gambling caravan and its visibility is increasing in popularity, especially with the idea of increased regulations on online gambling activities. If the US markets will open, online gambling industry stocks will most likely be the new obsession for stock brokers and bankers in the latter part of this year or in early 2012.

Before the passing of the Unlawful Internet Gambling Enforcement Act way back in 2006, European companies mined gold nuggets in what has already been considered a very huge market potential. With over 10 million people in the US playing online poker alone, according to surveys, the support for online gambling will be immense. Congressman Bill First, Representative Robert Goodlatte, and Representative Jim Leach were among the strongest supporters of the UIGEA. The approval of this law caused several European companies to pull out of the US online gambling market. Had they took a different approach on the matter, the online gambling industry would have been a huge help in the economy especially when the the economic depression hit. The online gambling companies would have also made recovery all the more easier. PartyGaming was one of the companies that complained about the lack of clarity of the UIGEA, and they have since settled a legal dispute with the US, positioning themselves to re-enter the market should regulations be put in place.

It looks promising to know that the US economy is getting back on its feet and getting stronger every month. Recent surveys show that 44% of the American Public would like online gambling to be available in their areas. That translates to well over 130 million Americans supporting online gambling legislation, if the Unlawful Internet Gambling Act remains as a stumbling block that will hold these people back. Millions of dollars in income and tax revenues will go down the drain for every year online gambling remains unregulated. More discussions about this issue will probably be discussed by the US congress in the coming weeks and some of the companies who wishes to invest in the industry as well.

Hopefully, more states will adhere to the demands of the people and create local laws to regulate online gambling to promote healthy economic growth. Once New Jersey will succeed, which many believe to be the case, it will, hopefully cause other states to see the benefits of online gambling. Other states would also loath to be left behind in the progress, thereby causing a domino effect on the country. Oppisition, however, is expected to crop up in any state that considers the regulation of online gambling. New Jersey, which has taken great strides in its effort to regulate the industry, has not done so without any opposition from anti-gambling groups. Supporters hope that once New Jersey sets a good example, opposition will start to dwindle.