Global Maxfin analyst Ralph Garcea says the regulatory changes Amaya Gaming (TSXV:AYA) has been anticipating in the U.S. are beginning to happen, and the company is well-positioned to benefit.
On June 14, the New Jersey Gaming Enforcement Division communicated to Atlantic City’s twelve casinos that they should arrange Internet gambling deals by June 30, 2013, in order to go live by November 26, 2013.
Under the arrangement, online vendors who form partnerships with the casinos have until July 29th to file their applications for Internet licenses.
Amaya Gaming, says Garcea, is in great position to compete for these partnerships, given the product offerings it has acquired of late, including the $167-million acquisition of slot machine maker Cadillac Jack last September. He expects Amaya shareholders will see announcements come out of New Jersey in the near term.
New Jersey casinos such as the Golden Nugget Atlantic City, the Tropicana Casino & Resort Atlantic City, and the Trump Taj Mahal have yet to announce a partner.
Garcea says the regulatory changes are bringing about a resurgence in a casino industry that has been on the downswing for years. Much of the rebound, he says, reflects the introduction of Internet gaming.
In a research update to clients this morning, Garcea reiterated his BUY rating and $10, street-high target on Amaya Gaming. The analyst notes that Amaya is currently trading at a 2014 earningss EV/Sales of 3.1x and and EV/EBITDA of 8.3x against industry comparables at 2.4x and 8.5x, respectively.