Casino stocks hit jackpot with court ruling

Any stock investor gambling on the Supreme Court repealing the ban on sports betting was a winner.

The two chains with the biggest shares of the national casino market, Penn National Gaming and Caesars Entertainment Corp., both saw healthy spikes, with Penn rising 4.7 percent, to $33.75, and Caesars, up 5.5 percent, to $12.55.

“Our conclusion is Penn and Caesars have the most upside, respec- tively, among casino operators. Meanwhile, Scientific Games has the most upside among the equipment suppliers,” David Katz, a managing director at Jefferies, wrote in a Monday report.

Shares of Scientific Games rose 11 percent, to $59.30.

Last month, Katz said the equity value in Penn National could rise 21 percent and Caesars perhaps 15 percent over two to three years if sports betting were legalized.

The Supreme Court on Monday ruled that the national ban on sports betting was unconstitutional, and now each state will decide whether to legalize it.

New Jersey successfully fought the sports leagues in the highest court and will be the first of the 47 nongambling states to allow wagers.

Katz believes 33 states could potentially legalize sports betting over the next two to five years, with some just issuing sports betting licenses to casino and horse race operators.

Las Vegas bookmaker William Hill plans to manage a New Jersey sports book out of Monmouth Park in as soon as a few weeks.

Hill’s company share price in London rose Monday by 11 percent, to 313.10 British pounds ($424.66).

“Although bookmaking is practical and profitable in-house among the very largest operators in Las Vegas at present, we believe most operators ... would likely outsource this aspect in the initial phase,” Katz said.