Investors took a flutter on gaming shares on Friday morning, encouraged by news that online gambling is set to be legalised in New Jersey, which would make it one of the first US states to allow online wagering.
New Jersey governor Chris Christie gave his conditional support to internet gambling. The bill to legalise online gambling in the state – seen as a potential precursor for other legalisations elsewhere – is expected to be passed without trouble.
The stand-out shares on rising London markets, Bwin.Party (BPTY.L) and 888 Holdings (888.L), jumped 15% and 10% to 134p and 127p respectively. William Hill (WMH.L) was 2.3% higher to 404p and Betfair (BETF.L) rose by 1.25% to 688p.
A statement from governor Christie's office said: 'Governor Christie concludes that now is the right time for the state to move forward and again lead the nation by becoming one of the first states to permit Internet gaming, but only with the right limitations and protections.'
Richard Hunter, head of equities at Hargreaves Lansdown, said that Bwin could be a beneficiary if the New Jersey development turns out to be part of a wider trend: 'If we cast our minds back, bwin for example used to be PartyGaming – a FTSE100 constituent which had some 75% of its income from the US. When the ban was introduced, the stock dropped like a stone.
‘If this New Jersey announcement were to be mirrored in other states, one could conceivably see the stock regaining some of its former glory,' he added.
Nick Batram, an analyst at Peel Hunt, agreed that if the bill is passed, it would be be an 'important development for the US online gaming market as a whole'. Batram added: 'What the European operators can make from it is uncertain but an online US should be positive for everyone.'
The mood was upbeat in wider markets, with gains across Europe and Asia, countering losses overnight in the US. The FTSE 100 rose 0.6% to 6,267 while the Eurofirst 300 was up by 0.65% to 1,155. The euro clawed back some of yesterday’s sharp losses – when European Central Bank president had warned on the economic impact of a strengthening euro – up 0.17% to $1.3418.
Markets were boosted by data from Asia, where the Chinese Trade Balance and Japanese Economy Watchers Sentiment reports beat expectations. Inflation in China declined to 2% in January, from 2.5% in December, in line with market expectations. Both sets of Chinese data may have been distorted by the changing timing of the Chinese New Year.