The US Supreme Court has made a landmark ruling that could allow states across the country to legalize sports betting.
Shares of gambling stocks on both sides of the Atlantic surged Monday as the U.S. Supreme Court endorsed a 2014 state ruling in New Jersey that permitted sports betting in casinos and at horse racing tracks.
The court also struck down a 1992 federal law banning sports gambling.
The 6-3 ruling is a victory for New Jersey and other states who have considered allowing sports gambling as a way to encourage tourism and tax revenue. Major U.S. sports bodies such as the NCAA, NFL and NBA had nevertheless backed the federal prohibition.
The NCAA said it was a threat to the “integrity of athletic competition.”
However, Justice Samuel Alito wrote on behalf of the Supreme Court: “The legalization of sports gambling requires an important policy choice, but the choice is not ours to make.
“Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own.”
Shares in UK-based bookmakers jumped on the ruling. Paddy Power Betfair’s share price rose 10.5 percent, 888 Holdings jumped 14 percent, William Hill’s stock gained 9.4 percent and GVC Holdings rallied 6 percent.
In the U.S., shares in Churchill Downs, which owns horse race tracks and casinos rose by 5.73 percent.
On the other hand, Wynn Resorts, the Nevada-based hotels and casino operator, saw its share price fall by 2 percent on the prospect of competition from new entrants to the sports betting market.
The Supreme Court decision strikes down the Professional and Amateur Sports Protection Act (PASPA) of 1992 that prohibited sports betting in most states.
It is currently only legal in a handful of states, including Nevada, home to Las Vegas; Delaware, Montana and Oregon.
Neil Wilson, chief market analyst at markets.com, told the BBC that William Hill stands to gain the most following the ruling because it “can roll out gambling operations pretty swiftly from Nevada, where it already operates and has very strong market presence.”
He added that the company also has a New Jersey operation “that is primed and ready to start taking bets within days.”