NEW YORK (TheStreet) -- It's a good bet that Atlantic City and casino stocks such as Boyd Gaming
(BYD), Caesars Entertainment
(CZR), Las Vegas Sands
(LVS), MGM Resorts International
(MGM) and Wynne Resorts
(WYNN) will not only survive, but flourish now that online gambling is legal in New Jersey.
Investors are doubling down on the news.
Up more than 12% for the week, Caesars owns the Bally's Atlantic City, Caesars Atlantic City, Harrah's Resort Atlantic City, House of Blues at Showboat and Showboat Casino in Atlantic City, plus the Harrah's Philadelphia in Pennsylvania. For Caesar's, the world's most diversified casino entertainment company, about 20% of revenue comes from Atlantic City. Gary Thompson, a spokesman for the company, says, "We think [online gambling in New Jersey] is going to be beneficial not only to our company and other operators but it will also help expand and possibly reinvigorate the market by introducing games to potential new customers."
Boyd Gaming is up nearly 6% for the week. With more than twenty gaming properties, Boyd receives 27% of its almost $3 billion in revenues from a half-stake in the Atlantic City Borgata Casino, the most profitable of its kind in the city. Nearly 30% of revenue comes from properties in the Midwest and the South. A variety of properties in the Las Vegas area account for another 26%. Peninsula Gaming provides the remaining 18% of Boyd's revenues.
Rather than being threatened by online gambling, it is the major centers, New Jersey and Nevada -- the ones you might think would have the most to lose -- that are the biggest proponents of the new legislation.
Las Vegas Sands, Wynn Resorts, and MGM Resorts International have also seen their stock prices surge. Online gambling presents a new paradigm for revenue streams. Boyd was the first U.S. casino to offer gambling from televisions in its hotel rooms. Other potential new sources of gaming revenues could now come from tablets, smartphones, and laptop computers.
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