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Analyst Says Plenty of Opportunity for Gambling Stocks

Owners of iPoker, Paradise Poker, Unibet Poker, and bwin Poker Retain “Buy” Recommendations

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Daniel Stewart & Co. today said it retained its “buy” recommendations on a number of gambling stocks, all of which incorporate significant online poker businesses. The company’s analyst, James Hollins, said that, “Despite continuing to outperform the wider market during 2009, the Daniel Stewart Gambling Universe has had a torrid time since the start of H2 2009.”

Hollins indicates that shares had been adversely affected by a number of factors including profit taking, profit warnings (Playtech), concerns over casino yields, ongoing online poker competitiveness, and weak sportsbook margins (Betsson, Unibet).

However the company believes that retail bookmaking is highly resilient, online gambling will show solid growth in the short to medium term, and regulatory and consolidation issues underpin the values of these companies.

The company has reiterated its key picks as:

36 percent upside to 80p Sportingbet target price (owner of Paradise Poker)
38 percent upside to SKr 253 Unibet target price
43 percent upside to €38.9 bwin Holdings target price
58 percent upside to 496p Playtech target price of iPoker network)
53 percent upside to 259p William Hill target price

Earlier this year the company forecast an online poker growth rate of 7.8 percent for 2009.