Barclays Capital says European online gambling regulation will lead to strong revenue growth

The Reuters news agency reports that the investment arm of a major UK bank is now monitoring several high profile online gambling companies following increased interest in the sector.

Barclays Capital is following the fortunes of Bwin, Sportingbet, 888 Holdings and Party Gaming, the report notes.

Shares in the European-facing, Vienna-listed Internet gambling group Bwin rose 4 percent to Euro 34.23 after Barclays Capital started coverage of the stock with an "overweight" rating and a target price of Euros 45.

In a review of the sector, the broker says that online gambling and betting regulation in European countries, including Italy and France, will lead to strong revenue growth.

"Bwin is our top pick in the online industry due to its strong positioning in key European markets," the initial BarCap report comments. "In Italy, we forecast the acquisition of Gioco Digitale to grow poker revenue by 100 percent in 2010... In France and Spain, Bwin is also well positioned to take advantage of regulation."

BarCap gave Sportingbet an "overweight" stance, and classified 888 Holdings and PartyGaming with "equal weight" ratings. All three British stocks traded slightly higher on the news.