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  • U.S. Internet Gaming and Betting Changes (CRYP, GME, ELRA, CHDN, PENN)

    Written by: Jennifer Romano

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    Revising a Free Market Policy Could Generate New Tax Revenues…

    ELRAThis week online gaming stocks like CryptoLogic Limited (NASDAQ:CRYP), GameStop Corp. (NYSE:GME), and Elray Resources Inc (OTC:ELRA) (now Elray Gaming) and para-mutal online horse betting plays like Churchill Downs, Inc. (NASDAQ:CHDN) and Penn National Gaming, Inc (NASDAQ:PENN)were all given in a gift in the form of a policy change of the Justice Department’s longstanding position that all forms of online gaming are illegal in the U.S.

    Yesterday the Dept of Justice said it was easing up on its ban of internet gamingand I think that’s due to Federal-to-State “Stimulus Dollars” being spent, there might be a large pool of “State Tax Revenues” to be gained via online gaming.

    The DOJ released a legal opinion noting that federal law doesn’t cover online betting that’s not related to sporting events. The 2006 law was brought about by President Bush essentially stopping banks from processing money based in online wagering.

    It’s now theoretically a “States Rights” issue; and this from a Democratic DOJ and White House. States can move quickly to tax; and the “Wire Act” reversal may even one day lead to a further policy revision that now stops at betting on sports related events as opposed to poker for example. The DOJ interpretations will no doubt follow as online lotteries breed.

    Games of chance just got a huge break in my opinion and big caps, mid caps, and small caps all have the opportunity to prosper whether hardware manufacturers, software makers, marketing plays, or actual web sites.

    Each of the stocks mentioned above, of varying price ranges and market caps, stand to benefit (which requires a lot of extra due diligence) and of course gaming shares, even brick and mortar establishments, have all seen share valuations rise.

    It’s also my opinion that with the reversal will come a lot of new players into the online betting field and some interesting partnerships and coalitions are bound to develop.

    This article written by Dennis Askew:

    I haven’t, don’t, and do not intend on holding any of the companies mentioned in this article.

    Dennis Askew is a paid contributor of the SmallCap Network. Dennis Askew’s personal holdings should be disclosed above. You can also view SmallCap Network’s complete disclaimer and disclosure.

    January 2, 2012 @ 4:29 am Trackback URL Posted in Hot Stocks, Trader's Corner and tagged with .