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Nov
26th

Online Gaming Stocks Strong

A few years ago investing in internet gaming companies was a risky business because of legal issues in various countries including the United States. The UK ,instead of taking a prohibitionist approach to the developing industry, decided to legalize, tax and regulate internet gaming. The policy worked out well for the UK and today the country has a mature thriving internet gaming market worth billions and gaming stocks are traded on the London stock exchange.

The online gaming industry has not been free from problems as evidenced last week when a Bwin.party digital entertainment CEO was detained in Brussels. The report of the arrest brought Bwin’s stock down almost immediately. In the US many large gaming companies are hedging their bets and are partnering with online gaming companies to be in a favorable position should internet gambling be legalized in the United States. In November 2011 MGM Resorts International and Boyd Gaming Corp signed a three way poker deal with Bwin.party digital entertainment. Brick and mortar casinos are searching for new markets. Caesar’s is moving into India and MGM plans new operations in Canada.

Today the online gambling industry is worth billions and has shown itself to be recession resistant. At the height of the global recession internet gambling was one of the few growth industries. Many internet casinos have a brick and mortar owner and operator. Some observers say that online gaming stocks are replacing the gold mine penny stocks everyone thought they could strike it rich with. Many experts say that investing in online gambling takes a cool head and lots of nerve.

Investing in gambling has many pitfalls not found in other industries. Traditionally gambling has been at the mercy of governments and governments can legalize or prohibit internet gambling at will with very little notice. When the US decided to ban online gaming in 2006 gaming stocks plummeted on global exchanges and some never fully recovered. Many investors are now taking a chance on social gaming which at present is relatively unregulated. Many experts say that investing in mobile gaming companies is a wise move. Recent technological developments have made mobile gaming the fastest growing sector of the gaming industry. There is serious money to be made from internet gaming but trading is likely to be volatile for the near future.

 

By Jeff Davis