Amaya Gaming's Stock Price Soars After Approval To Offer Services in New Jersey
On Sept. 30, 2015, poker players in New Jersey had reason to celebrate, as PokerStars and Full Tilt received approval from state gaming regulator, the New Jersey Division of Gaming Enforcement (NJDGE), to operate in the Garden State.
Players are not the only ones to celebrate, as investors in Amaya Gaming, the parent company to PokerStars and Full Tilt, have plenty of reasons to do so as well.
On Sept. 29, the day before the NJDGE granted approval for the online gaming licenses, the stock price of Amaya Inc. closed at CAD 22.98 ($16.47) per share where it trades on the Toronto Stock Exchange under AYA, according to BloombergBusiness. Just a week later, the stock price soared by almost 36 percent to closing price on Oct. 6 of CAD 31.23 ($23.40) per share.
According to CNBC, one analyst believes that this is just the beginning, and the stock price may eventually more than double to a stock price around $40 per share.
Macquarie Group Limited analyst Chad Beynon commented about the company's stock price that, "We see this stock as a double — you just have to be patient and stick through some of these catalysts."
The Wall Street analyst added that, "We think this New Jersey announcement was a big one, and the first of many to come."
Beynon also commented that approval for online poker is just part of the reason that the stock price should continue to surge.
"What we think will change is the valuation and the multiples that will be ascribed to this company," said Benyon. "Much of the growth we're predicting to be sourced from casino and sports betting businesses as well as its poker operations."
This is certainly good news for Amaya, who, in addition to making in-roads in the New Jersey, have also began to step into the US marketplace nationwide after purchasing daily fantasy sports (DFS) site Victiv. Victiv was then relaunched under the name StarsDraft a little more than a month ago. Additionally, the NJDGE explained last month about the due diligence involved in potentially granting approval in the Garden State in face of the "bad actor" clause included in the state's regulation.
NJDGE Director David Rebuck explained to Global Gaming Business' Roger Gros that the main reason the regulatory's approval took this long was due to a "thorough, comprehensive review" of Amaya's $4.9 billion acquisition of PokerStars last year.
Rebuck added that, "We've done 80 sworn interviews, we've traveled to half a dozen foreign countries."
While launching in New Jersey does not mean that the site will instantly be available everywhere in the US, it is good news for online poker players around the country. For example, it would be hard for other states such as California who are rumored to include a "bad actor" clause in any online gaming regulation being considered to pass into law to restrict PokerStars and Full Tilt from obtaining licenses.
Beynon agrees with this sentiment, stating that, "The New Jersey ruling should serve to put a stamp of approval on the company in the US, which makes it a significant milestone given the 'bad actor' debate and the level of due diligence the NJDGE conducted."
Stay tuned at PokerNews as more develops in the United States regulated online gaming marketplace.