The market is underestimating Amaya Gaming’s growth opportunities, says Garcea

The Borgota is the largest casino in Atlantic City, and the sixth to partner with Amaya Gaming. Amaya Gaming’s (TSX:AYA) deal with bwin.party is a move that significantly strengthens the Canadian company’s presence in the U.S. gaming market, says Global Maxfin Capital analyst Ralph Garcea.

This morning, Amaya announced that it had entered into a licensing agreement to provide a wide selection of on-line casino gaming content to bwin.party in New Jersey. Under the arrangement, on-line gaming websites provided by bwin.party to its licensed gaming operator partner Borgata Hotel Casino & Spa in New Jersey will be integrated with Amaya’s casino gaming system.

Garcea, noting that Amaya is now partnered with six of the New Jersey’s 12 casinos thinks the street is underestimating the growth opportunities that are available to Amaya in the U.S. online gaming space. He says the company could see a return on equity in the mid-20% range by the end of 2015.

In February of this year, New Jersey became the third state to legalize online gaming. On November 26th it will become the second US state to actually launch online gaming. Dozens of companies have applied for licenses in New Jersey, and recently the New Jersey Division of Gaming Enforcement disclosed that the Trump Plaza and the Trump Taj Mahal have, in fact, received New Jersey Internet Gaming permits. With a more than 20% market share, the Borgata is Atlantic City’s largest casino.

In a research update to clients this morning, Garcea reiterated his STRONG BUY rating and $11.00 one-year target on Amaya Gaming. Shares of the company closed today up 4.6% to $7.75.

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