Michael Campbell, an analyst at brokers Daniel Stewart & Company, sees nothing but rainbows on the US online gambling horizon. In a note issued to clients last week, Campbell stated that “online gambling will move ahead whether legislative change happens at Federal or State level or a combination of both.”
Campbell identifies poker as the thin end of the online gambling wedge, suggesting it “may be the only product vertical to pass at Federal level.” But it’s at the state level that Campbell expects real progress to be made, first in New Jersey, then in California, with “legislative change implemented and licenses granted in 2H11 or early 2012.” In Campbell’s view, this will cause “a tipping point, whereby other states will follow.”
Because he’s a stocks guy, Campbell suggests Playtech and PartyGaming will be the public companies most likely to benefit from America’s future embrace of online gambling. But Campbell isn’t handing out prizes to all public gaming firms. “We see a number of issues plaguing 888 Holding’s chances of entering the US market,” including a weakened balance sheet that will prevent the reaching of a PartyGaming-style settlement with the Dept. of Justice as well as the lack of approval by Nevada regulators re 888’s tie-up with Caesars Entertainment.
For the record, CalvinAyre.com thinks Campbell’s on the money when he predicts online gaming making inroads at the state level. However, we think Campbell’s crystal ball got a little foggy when he surveyed the federal future. In our most optimistic outlook, legislative changes at the federal level – even Campbell’s limited poker-only prediction – are still years away.