Shares of casino companies and game makers traded higher Tuesday after the Justice Department said it was relaxing its enforcement of a rule that bans Internet gambling.
The U.S. Department of Justice released a legal opinion on Friday saying that federal law doesn't cover online betting that's not related to sporting events. The situation has been unclear since Congress passed and former President George W. Bush signed a 2006 law forbidding operators from running games by preventing financial institutions from processing funds for most online wagering.
Sterne Agee analyst David Bain said the opinion could lead eventually to full federal legalization of online gambling. In the meantime, Bain said states could proceed more quickly with ballot initiatives to allow it. He said the new interpretation of the 2006 law and earlier related federal regulations also could allow for online lotteries in some states.
"The interpretation, in essence, may now limit the Wire Act to gambling on sport-related events," Bain wrote.
Bain said the change could be good for MGM Resorts International, Wynn Resorts Ltd, Las Vegas Sands Corp., and other big casino companies — and for their suppliers, including International Game Technology, Bally Technologies Inc. and WMS Industries Inc.
MGM Resorts shares gained 56 cents, rising by midafternoon Tuesday to $10.53. Wynn stock rose $4.33, or 3.9 percent, to $114.33 and shares of Las Vegas Sands picked up 60 cents, increasing to $44.14. International Game Technology stock advanced 75 cents, or 4.5 percent, to $17.30, while Bally shares gained 73 cents to $39.61 and WMS shares added 51 cents to $21.32.
© Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.