Amaya Gaming’s (TSX:AYA) deal with a subsidiary of Caesars Interactive Entertainment is a real positive, says Cantor Fitzgerald analyst Justin Kew.
Yesterday, Amaya announced that it had struck a deal with the Caesar’s subsidiary to provide it gaming platform and on-line casino gaming content. Caesar’s says it will use the technology to launch the CaesarsCasino internet gambling website in New Jersey.
Amaya CEO David Baazov said the arrangement was an important step in the company’s larger strategy.
“This is an immense win for us, one that should extend our on-line gaming footprint significantly in the United States as well as contribute to our recurring revenue in future years,” he said. “It is the direct result of the investments we have made in both our Amaya Game Office platform, which has gained significant traction, and in preparation for our entry into the emerging regulated on-line gaming industry in the United States.”
Kew says Amaya couldn’t have picked a better license holder in New Jersey. He notes that Caesars owns more than 40% of the land-based market and expects the gaming giant will duplicate this success online. He believes Amaya is now “exceptionally well positioned” to capture additional contracts with Caesars.
In a research update to clients this morning, Kew maintained his BUY recommendation and $8.50 target price.
Kew says he belives the market for online gaming in New Jersey alone New Jersey online market could be worth more than $350-million within three to five years.