Zynga Inc (NASDAQ:ZNGA) shares are up 5 percent after New Jersey approved online gambling. Caesars Entertainment Corp (NASDAQ:CZR) rose 2 percent and Boyd Gaming Corporation (NYSE:BYD) jumped 5 percent on the news.
New Jersey Gov. Chris Christie approved online gambling in his state in an effort to increase the state’s revenue and revive business conditions in the second largest gaming city in the U.S. — Atlantic City. New Jersey is the second state to legalize online gambling. Nevada became the first state to do so last week.
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Together Caesars Entertainment Corp(NASDAQ:CZR) and Boyd Gaming Corporation (NYSE:BYD) make up about 60 percent of Atlantic City’s gambling revenue. Caesars operates four casinos in New Jersey, while Boyd Gaming runs the Borgata Hotel and Casino resort.
Today marks the third consecutive day of increases for shares of Zynga Inc (NASDAQ:ZNGA). The online social gaming giant is in the process of securing an online gambling license for New Jersey.
Analysts at Deutsche Bank believe that the online gambling market in New Jersey could be worth $250 million a year. At this point the law states that the players must be physically located in New Jersey. Legislators believe this can be regulated through the use of technology which tracks the user’s location. Also states could create compacts with other states in order to expand the pool of gamblers across state lines.
Online gambling has been the subject of controversy for years; in 2011 the Department of Justice changes its view on the subject, which prompted many states to take up the issue. Experts told The Wall Street Journal that online gambling hubs could be up and running sometime later this year.