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Shares of Score Media and Gaming Inc. (SCR-T) ) soared 24 per cent on Thursday after the federal government introduced a bill to legalize single-event wagering in Canada, following a similar trend south of the border.

The Toronto-based company’s stock closed up 19 cents to 98 cents on the Toronto Stock Exchange, after hitting an intraday high of $1.04. That came within 2 cents of its high of $1.06 reached briefly in June.

Score Media offers sports betting across all major sports leagues and events in parts of the U.S. including New Jersey, Colorado, and Indiana, with other states expected to follow soon. It’s currently illegal to bet on a single sports event in Canada. Instead, players have to bet on the outcomes of two or more games, known as a ‘parlay.’

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“Canadians deserve a modernized and regulated sports betting market and we commend the federal government for their efforts to legalize single-event wagering,” Score Media chief executive officer John Levy said in a release.

Score Media estimates the market potential of online gaming in Canada to be between US$3.8-billion and US$5.4-billion in annual revenue, based on historical data from gaming markets in the U.S. and globally.

Eight Capital analyst Suthan Sukumar described the news as “incrementally positive” on the regulatory front for sports betting in Canada.

While the bill still has to pass several stages in the legislative process before becoming law, Mr. Sukumar notes both the Conservatives and the NDP have expressed support for the bill. It’s expected to go to Senate vote early in the New Year.

“In our view, the passing of this legislation would effectively kickstart new regulatory frameworks for provinces to regulate sports betting and ultimately online gaming at the provincial level, allowing approved third party gaming suppliers and operators into the market, like theScore,” wrote Mr. Sukumar, who has a “buy” and $1.25 target price on the stock.

He also said provinces like Ontario are already further ahead with online gaming tabled in the upcoming budget, and B.C. and Alberta are also expected to be “early movers.”

“We continue to see theScore as uniquely positioned as a preferred gaming provider in Ontario and the other Canadian jurisdictions given its Canadian roots, and their large Canadian user base... experience in scaling regulated sports betting operations in the U.S.,” he wrote.

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Justice Minister David Lametti said in a statement that the amendments will “help create a safe and regulated environment for Canadians” that want to participate in single-event sport betting, while also “taking profits out of the hands of organized crime.”

Mr. Lametti also said the move would create jobs and “create the opportunity to work with Indigenous people to strengthen their participation in the gaming industry.”

Canaccord Genuity analysts Aravinda Galappatthige and Matthew Lee also called the legislation “an early step” for Score Media, but believes it’s “a marked positive for SCR given our belief that Canadian legalization can be a key growth catalyst.” (SCR is the stock symbol for Score Media). They believe legalization in Ontario could occur as soon as the first half of next year, and a product launch from SCR within the 2021 calendar year.

The analysts, who have a “buy” and $1 target on the stock, expect each province will decide on their own framework, “which could include licence/skin agreements with local land-based gaming operators, the inclusion of indigenous gaming operators, and a variety of tax rate considerations. Despite the many possibilities, we expect most provinces will likely look to the New Jersey model (market access partnerships with local casinos) as a template given the success the state has seen.”

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