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Why the EML Payments Ltd share price is rocketing higher today

One of the best performers on the local market on Tuesday has been the EML Payments Ltd (ASX: EML) share price.

In afternoon trade the fintech company’s shares are up 9% to $1.32.

Why are EML Payments’ shares rocketing higher?

With no news out of the company or broker notes that I’m aware of, today’s push higher is likely to be attributable to news out of the U.S. Supreme Court.

According to the Wall Street Journal, on Monday the U.S. Supreme Court overturned the 1992 Professional and Amateur Sports Protection Act that outlawed the operation, advertisement, and promotion of sports gambling.

This ruling has cleared the way for all states to allow gambling on sports events, which will be great news for betting companies and EML Payments.

EML Payments provides payment technology solutions for payouts, gifts, incentives and rewards, and supplier payments.

One significant market for the company is sports betting. Betting companies such as Crownbet, William Hill, Ladbrokes, bet365, and Sportsbet use EML Payments to provide their customers with reloadable debit or virtual cards that allow them immediate access to winnings.

If sports betting explodes in the United States because of the Supreme Court’s ruling, then EML Payments could be positioned perfectly to profit.

Should you invest?

I think EML Payments is a quality company that has quickly established itself as a market-leader in a fast-growing industry.

While the full impact of the Supreme Court’s decision is not yet known, I do agree with the market in judging this to be a huge positive for the company.

But like fellow fintech stars Afterpay Touch Group Ltd (ASX: APT) and Hub24 Ltd (ASX: HUB), EML Payments’ shares do come with significant growth already built in. This does make its shares a reasonably high risk investment option and one that may be unsuitable for the average investor.

Investors may want to wait and see if the company comments on this latest development before buying shares because of it.

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