888 could launch an online gaming offering in Nevada, home to gambling center Las Vegas, as soon as May, a source said after the group won the first ever U.S. license to be awarded to an internet betting firm.
The license to operate in Nevada granted to London-listed 888 Holdings Plc is the first time an internet gambling company has been licensed in the United States, which banned online gambling in 2006.
Following receipt of the license, 888’s launch of online poker in Nevada could come as early as mid-second quarter, a source close to the situation said on Friday.
Revenue from Nevada alone is likely to be limited, but the license is a key step for 888 in its development in the wider regulated U.S. online gaming market.
“This is an historic moment for 888. This is the first time a company uniquely providing online gaming has been licensed by any U.S. jurisdiction,” Chief Executive Brian Mattingley said.
The decision, announced on Thursday, had been expected after the Nevada state gaming control board voted to recommend approval earlier this month.
888 has already signed a deal with Las Vegas operator Treasure Island to launch online poker under its own brand in Nevada.
It has also a signed a non-exclusive deal with Las Vegas casino brand Caesars to power the web spin-off of Caesars’ World Series of Poker tournament, and has agreed a deal with slot machine operator WMS to give it an online presence.
888 has said that, while U.S. income could eventually be considerable, it will likely not have a significant bottom-line impact until 2015.
Internet betting was barred by Congress in 2006, dealing a blow to online gaming companies including 888 who had set up there and driving them elsewhere in their quest for growth.
But the legal position in the United States is changing and national legislation is set to be introduced in the spring as the federal government looks to overtake tax revenue-hungry states racing to follow Nevada in legalization.
Last month, New Jersey – home to the casinos of Atlantic City – legalized internet gambling in the state.
Analysts say companies like 888 and larger rival bwin.party are well placed to take advantage of the move towards a regulated market, having the experience and infrastructure from years of operating in Europe.
“Management teams will need to successfully juggle maintaining growth in the core business whilst preparing for U.S. re-entry,” said analysts at brokerage Panmure Gordon.
“The highest visibility on U.S. re-entry lies with 888 and bwin.party, but Playtech is reported to be in advanced discussions and Betfair’s provisional betting exchange license in California remains a source of key upside should it graduate to a full license.”
Bwin, the world’s largest-listed internet betting firm, said earlier this month it was throwing more resources at the U.S. and other soon-to-be regulated markets and backing out of smaller, unregulated ones.
888, like other online gambling firms, suffered a plummeting share price in 2006 at the time of the U.S. clampdown. Yet the stock hit a seven-year-high earlier this month on hopes of a return to the United States.
By 7.16 a.m. ET the shares were flat at 162.6p.