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Late last year when the new Republican House was waiting to be sworn in, there was hope around the gambling industry that an online gaming bill might be shoved through before more conservative legislators took over. Well that never happened, and I for one thought it would be at least another two years until we heard about online gaming regulations.
But Nevada may be shimmying its way into online gaming for its state's residents only (wink, wink; nudge, nudge). With PokerStars leading the way, some people are trying to figure out a way to make Nevada the center of future legal online gaming, or so the lobbyists claim. But big gaming isn't behind this localized push, with MGM Resorts (NYSE: MGM ) and Caesars Entertainment both publicly favoring federal regulation. And Nevada regulations may not pass without casino support.
In an odd bit of timing, the online gaming bill that was defeated last year resurfaced just last week, and Senate Majority Leader Harry Reid (D-Nev.) appears to be making another push at it. It doesn't look as if anything is imminent, but the conversation is good for companies like Caesars and MGM, which would be major beneficiaries.
There was also the Gaming Control Board's approval of a relationship between Caesars Entertainment and Cassava Enterprises and Fordart, two subsidiaries of online gaming company 888 Holdings. We don't know exactly what the relationship entails, but you can read between the lines that Caesars wants to have a presence in online gaming. The push for online gaming has started again, and this time more options are opening up.
While Las Vegas Sands (NYSE: LVS ) and Wynn Resorts (Nasdaq: WYNN ) would both get a piece of the online gaming pie, this is really something MGM investors should be cheering for. MGM has more brands, more casinos, and is in much worse financial shape than its competitors. I wouldn't hold my breath for online gaming quite yet, but it's encouraging to see that online gaming may have an effect on casinos sooner rather than later.
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