(Reuters) - Shares in gaming and casino companies jumped on Monday, led by Scientific Games Corp, as investors wagered on new business opportunities for the industry after the U.S. Supreme Court paved the way for states to legalize sports betting.
The ruling endorsed New Jersey’s bid to allow sports betting and struck down a 1992 federal law that widely prohibited the practice, potentially adding a new line of business for many casinos and for betting technology providers such as Scientific Games and International Game Technology.
It takes the United States a step closer to the possible expansion of legal sports betting nationwide, rather than select places such as Nevada, home to gambling capital Las Vegas. The illegal sports betting market is worth billions of dollars annually.
Scientific Games is particularly well placed to benefit from the ruling due to its acquisition in January of Canadian digital gaming and sports betting firm NYX Gaming Group Ltd, according to Todd Eilers, analyst at Eilers & Krejcik Gaming.
“I’d say there’s a lot of states that would move forward with sports betting,” said Eilers, who expects Scientific Games and International Game Technology to seek contracts with casino operators looking to expand into sports betting.
“Any regional casino operator with a lot of casinos across a lot of states would be the best positioned,” he added.
Scientific Games shares were last up 12.8 percent at $60.20, a record high, with trading volume 3.2 times the 10-day moving average.
International Game Technology shares were up 4.0 percent, on track for their biggest one-day percentage gain since early March.
Shares in racetrack and casino operator Churchill Downs also hit a record high and were last up 5.5 percent at $294.41 with trading volume 2.9 times the 10-day moving average.
Casino operator Penn National registered a record high, with its shares last up 3.8 percent at $33.48.
Shares in Caesars Entertainment, which operates casinos in 13 U.S. states and five countries, were last up 7.8 percent at $12.83.
Madison Square Garden, owner of the New York Knicks basketball team and the New York Rangers hockey team, was last up 3.5 percent at $263.10.
Overseas bookmakers William Hill, Paddy Power Betfair and GVC Holdings also jumped in brisk trading on Monday.
Reporting By Sinéad Carew, Editing by Rosalba O'Brien