Online Gambling Stock May Be the Ticket

Published Tuesday, November 13, 2012 -

The investment in online gambling stocks has always been somewhat risky mainly because most of the companies are relatively new and growing with competition always nipping at the heels of successful operations.

The recent news that digital entertainment’s co-CEO was detained in Brussels for questioning brought its stock down within seconds of the announced arrest. It’s not so much that the company has been experiencing anything all the others operators are its more that there is a perception the company is going to have some trouble that sends shudders through the market.

The investment in the bricks and mortar gambling outfits in the USA ,Hong Kong or Europe is just as interesting. Interesting, especially when you look at the huge debt loads that some of these operations have to contend with. MGM Resorts International and Boyd Gaming Corp signed a three way poker deal with digital entertainment last November 2011. This was an attempt to hedge their bets against other online gambling operators looking at entering the US online poker world should that ever happen. MGM has a debt load of as much as $13 billion that demands interest payments of $836 million in the last three quarters alone. This situation which isn’t as bad as Caesars Entertainment may cause some investors to think that maybe it wasn’t a great idea for MGM and to team up. MGM has a problem with too much debt and has a problem in Belgium.

The brick and mortar resort casinos need to find new markets so Caesars is moving into India and MGM into Canada meanwhile is trying to survive the online gambling world and its legal complications in Europe and the U.K. Investing in gambling is complicated and risky but it at least it remains interesting for those putting their bets on the new trend towards social gambling .

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