Investors Back Canadian Online Gambling Companies

Investment in online gambling companies is on the rise in Canada. The country now ranks second in terms of industry market capitalization. The United Kingdom remains the market leader and is ironically the sphere where many Toronto Stock Exchange listed companies operate.

Greg Taylor, a portfolio manager at Aurion Capital Management, pointed out that the non-resource sector has shown growth in times of global slowdown and today online gambling is the obvious choice in this sector. H2 Gambling Capital has forecasted that the value of the global online casino and bingo market will reach US$13.5 billion by 2018 at a compounded growth rate of 10%. This is the reason that it is drawing large investments. If the American online gambling market opens up completely due to federal legislation, the surge will be unimaginable. Right now only a few states offer legalized online gambling.

Amaya is the biggest online gambling company globally. The company made its market debut in April 2010 at $1 per share and is now trading at 35 times that price. Amaya is looking to expand its casino games and sports betting streams. But there are a number of smaller companies in Canada that are on the radar of investors. These have diversified products like software, fantasy sports, online payments and bingo. They are making money. The Intertain Group has a market cap of $1.3 billion as a result of a gain of 155% in the share price last year. Intertain is eyeing the online bingo market, which does not have the same “stigma” that has been heaped on online poker. Therefore the company is a good bet for investors.

Innova Gaming Group is another company that is likely to do well in the coming years. It operates lottery terminals and the Ontario Lottery and Gaming Corporation is pushing these terminals in bingo halls and gas stations across the province. The Stoney Creek, a lesser known Ontario based company, is doing deals with various U.S. states. If you are on the right side of the government then it helps. Gaming Nation has a market cap of only $80 million. It offers the 50/50 cash draws at major sporting events through online terminals in stadiums with live pots that fans can track. It does business with sports leagues like NHL, NFL and EPL. The company is now looking at U.S. high school sports and football stadiums.

Dan Daviau, chief executive of North American Capital Markets at Canaccord Genuity Group, said, “These aren’t risky stocks. They are growing and have significant cash flows, so investors feel very comfortable.”

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