(By Rich Bieglmeier) When a CEO spends more than a million dollars on his company's stock, it is still a big deal in iStock's opinion. Last week, Bally Technologies, Inc.'s (BYI) Chief Executive wrote a check that requires two commas. Oh, how sweet it must feel.
On Wednesday the 6th, Ramesh Srinivasan bought 25,000 BYI shares at $47.48 for a total of $1,186,900. It's the first time in the last two years that the big man did anything other than exercise options, non-open market dispositions, or automatic sales. To make things more interesting, Srinivasan's purchase is the first of any insider or director that we found in the past two years; otherwise, it's been selling or option exercising. The CEO's buy stands out like Shaq at anorexic elves convention.
Bally Technologies is a gaming company that engages in the design, manufacture, operation, and distribution of technology-based gaming devices, systems, server-based solutions, custom mobile applications, and interactive applications. BTI serves traditional land-based, riverboat, and Native American casinos; and video lottery and central determination markets.
This issue is real simple folks. More and more states are considering legalizing online gambling for their residents. There are some legal hang ups with professional and college sporting associations, but board and card games have been okayed by highest courts.
For example, Delaware could allow real money wagers by citizens as early as September, Nevada within weeks (more below) and states like Hawaii, Pennsylvania (spelled it right on the first try), Mississippi, Massachusetts, New Jersey (more below) and others are considering or are on the verge of giving online gaming the thumbs up.
Investors reacted favorably - big time - last week when New Jersey Governor Chris Christie vetoed an online gaming bill, but said he would sign it with a 10 year trial period and higher tax rates. Nevada Governor Brian Sandoval is expected to sign a bill allowing for interstate compacts. The state has already approved in-state Poker, and the Gov adds, "Other states are moving quickly on this issue, and I ask you to pass a [the interstate] bill within 30 days."
While online gaming has been outlawed for more than six years, David O. Stewart at Ropes & Gray, LLP reports, "Despite this government opposition, millions of Americans spend $4 billion every year to gamble online. Prosecutions against online gambling operators have driven the more responsible offshore operators out of the U.S. market, leaving Americans to conduct their online gambling through largely unregulated websites."
According to Stewart's report, Online Gambling Five Years After UIGEA, "Legalizing online poker will create, directly and indirectly, an estimated 10,000 high-tech jobs in this country, the sort of jobs that our citizens urgently need. And it will generate an estimated $2 billion of tax revenue every year for state and federal governments."
US Representative Barney Frank believes internet gambling in the United States would grow to a $14 billion market with one year of legalization. That's just Poker. Meanwhile, all that money goes offshore. It's big business and iStock believes there is no way politicians will keep their taxing hands off the low hanging fruit.
According to the Off Shore Gaming Association, their sources say to "expect some major [federal] legislation to come down regarding online gambling in the near future" A former DoJ agent told the author, "so something big is about to happen, I'm guessing in February or March."
This month or next, it doesn't matter. It is our view that Bally Technologies, Inc.'s (BYI
) CEO, Srinivasan is betting more than a million dollars that online gaming could be coming to a state near you in 2013.