NEW YORK, NY -- (Marketwire) -- 02/11/13 -- Shares of gaming stocks surged last week on the prospect of online gambling becoming legalized. Although New Jersey Governor Chris Christie vetoed a bill that would allow gambling over the internet in the state of New Jersey for the second time, he stated that if certain amendments were made he would allow a 10-year trial period. Five Star Equities examines the outlook for companies in the Gaming Industry and provides equity research on Scientific Games Corp. (NASDAQ: SGMS) and SHFL entertainment Inc. (NASDAQ: SHFL).
One of the amendments required by Governor Christie would be raising the tax rate on revenues from 10 percent to 15 percent. If passed New Jersey would become the third state where online gambling is legalized, following Delaware and Nevada. Janney Capital Markets analyst Brian McGill estimates the New Jersey online gaming market could be worth up to $1 billion in three years.
"Now is the time for our state to move forward, again leading the way for the nation, by becoming one of the first states to permit Internet gaming," Christie wrote. "While Atlantic City's reputation and stature as one of the premier resort destinations on the East Coast are well-chronicled, it is no secret that revenue from the region's most important industries, gaming and tourism, has been in decline.
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Scientific Games is a global leader in providing customized, end-to-end gaming solutions to lottery and gaming organizations worldwide. The company has recently entered into a definitive agreement to acquire WMS Industries Inc. for approximately $1.5 billion. The combined iLottery/iGaming platform and content will significantly expand the scope of the combined company's interactive products.
SHFL entertainment's newly introduced Shuffle Interactive, features online versions of Shuffle Master's table games, social gaming, and mobile applications. The company has recently signed an agreement with GameAccount Network to offer SHFL's online gaming products on GAN's platform in the United Kingdom, Italy, and Spain.
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