Ahead of the Bell: Sports betting may help Dover
Associated Press, 11.24.08, 07:25 AM EST
The possibility of legalized sports betting in Delaware could help alleviate some pressure Dover Downs Gaming & Entertainment Inc. faces now that Maryland has legalized gambling, an analyst said Monday.
Lawrence Klatzkin of Jefferies & Co. boosted his Dover rating to "Hold" from Underperform," saying the threat from Maryland's action has already been priced into the stock.
Legalized sports betting could provide an additional $26.3 million of tax revenue a year to Dover, Klatzkin explained. He predicts the measure may pass in the near term, due to the state's more than $200 million deficit as well as the new Maryland competition. While Governor Ruth Ann Minner has been against legalized sports betting, Klatzkin said this may change next year when incoming Governor Jack Markell takes over.
However, Klatzkin slashed Dover's price target to $2.75 from $4.50, due to the severe impact Maryland gambling is expected to have.
"While we believe it would be at least another two years before anything substantial could be operational, Maryland gaming being legalized will likely have an extremely negative impact on Dover Downs. Roughly 50 percent of Dover's players come from Maryland (per management)," Klatzkin wrote in a client note.
Associated Press, 11.24.08, 07:25 AM EST
The possibility of legalized sports betting in Delaware could help alleviate some pressure Dover Downs Gaming & Entertainment Inc. faces now that Maryland has legalized gambling, an analyst said Monday.
Lawrence Klatzkin of Jefferies & Co. boosted his Dover rating to "Hold" from Underperform," saying the threat from Maryland's action has already been priced into the stock.
Legalized sports betting could provide an additional $26.3 million of tax revenue a year to Dover, Klatzkin explained. He predicts the measure may pass in the near term, due to the state's more than $200 million deficit as well as the new Maryland competition. While Governor Ruth Ann Minner has been against legalized sports betting, Klatzkin said this may change next year when incoming Governor Jack Markell takes over.
However, Klatzkin slashed Dover's price target to $2.75 from $4.50, due to the severe impact Maryland gambling is expected to have.
"While we believe it would be at least another two years before anything substantial could be operational, Maryland gaming being legalized will likely have an extremely negative impact on Dover Downs. Roughly 50 percent of Dover's players come from Maryland (per management)," Klatzkin wrote in a client note.
