Stocks that Could Be Effected by the Upcoming Midterm Elections

(NEW YORK)--As the US midterm election approaches in early November, there are several stocks and sectors that could be effected by the pending results.

First on the radar is online gaming. PokerTek, Inc. (NASDAQ: PTEK), a developer of electronic poker-related products for use in the gaming and amusement markets, could benefit from a possible move to push the current House bill HR2267 through a 'lame duck' session after the election in early November. It is more then likely that the US House of Representatives will fall into control of the Republicans, but Democrats may attempt to push through the stalled bill into the more gaming friendly Senate for consideration in early 2011.

As states and local officials scramble to find new sources of tax revenue, the prospects for a relaxation on regulations for online gaming may find some hope in the more libertarian Tea Party agenda. In addition, a victory for Sen. Harry Reid (D - NV) could bode well for the gaming industry as a whole as the state looks to develop jobs in their all important gaming industry.

PTEK currently has only around 15 million shares outstanding, with a tight float of around 7 million. The Company recently announced that for the third quarter revenues had increased, gross margins continued to expand and their operating cash flow was in the black for the first time in Company history.

The Company is expected to release third quarter financial results before the bell on Nov. 2, 2010.

California Proposition 19

Another sector that may be effected by the upcoming election is the popular Marijuana stock sector, including Cannabis Science, Inc. (OTC: CBIS), a US biotech company developing pharmaceutical cannabis products.

As polls show Democratic Governor candidate Jerry Brown and Sen. Barbara Boxer (D - CA) now pulling ahead in the polls, the prospects of an increased democrat turn-out could push California's Prop 19 in the yes column. Prop 19 would make it legal, in the state, for the possession and cultivation of small amounts of marijuana for personal use. Through new legalization and regulation the state would also benefit from the increased tax revenue generated from this new industry.

This could have a sharp effect for marijuana stocks, such as Cannabis Scientific, and the prospects for increased legislation in other states across the country. Polls currently show Prop 19 leading in the yes column, but it could still be too close to call at this time. But again, with the new poll data showing a lean towards the democratic side of the ballot, the prospects for Prop 19 passing have surely increased.

CBIS recently announced plans to develop a FDA Investigative New Drug Applications (NDA) for its cannabis clinical trials.

Other stocks in the marijuana sector are Marijuana, Inc. (OTC: PCIO), International Merchant Advisors, Inc. (OTC: IMAI), and Converted Organics (NASDAQ: COIN).

For now, traders have their radars focused on the upcoming midterm elections, and how certain stocks may or may not benefit from the results next Tuesday.

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