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The gambling industry has been continuously expanding since its inception. In the past few years, it has experienced accelerated growth due to this activity becoming less taboo virtually everywhere. Boosting local economies and filling government coffers are the primary reasons why more and more lawmakers are deciding to allow this pastime, despite the well-known harms associated with it.
Currently, the global gambling market has an estimated size of around $750 billion. Per a study published by Global Industry Analysts, the worldwide sector should start to pull in annual revenues of $876 billion in the next five years. However, regardless of these impressive numbers, gambling stocks can be super volatile. Their prices can dramatically get affected by regulator’s decisions, the economic climate, government measures regarding different social/financial policies, and so on. Thus, many veteran investors consider them cyclical and advise sticking to only buying shares in massive corporations active in this field, as they have the capital necessary to weather storms and continue expanding. What follows is a rundown of the five best gambling stocks most analysts are suggesting those looking to invest in this sphere should consider.
Penn National Gaming
Penn National is a Wyomissing-based operator of racetracks and casinos. This entity is a corporate spin-off of the real estate investment trust Gaming and Leisure Properties, from whom it separated in 2013. It also owns a 36% stake in the digital media company Barstool Sports. Penn National’s assets have a value of around $14.6 billion, with the company raking in annual revenues of $3.5 billion in 2020, most of it generated from online slots. Earlier this year, it saw positive returns from the internet gambling sphere, as it announced plans for a launch of its Barstool Sportsbook app in Virginia. The dedicated smartphone betting software previously went live in Indiana, Illinois, Michigan, and Pennsylvania. Penn’s stocks have fallen by almost half from where they were in March, but the sustained margin improvement in the company’s land-based operations should boost this price soon.
DraftKings
American daily fantasy sports contest organizer turned sports betting operator has been on an up and down ride throughout the year. Its stock price dipped to $35 in November 2020 and rose to $75 in March 2021. It recently bought out the Vegas Sports Information Network, a sports betting content creator, that will help DraftKings expand its audience reach and content capabilities. In Q1 of 2021, the company’s revenues went up 253%, and it got reported that 43 hedge funds had stakes worth somewhere in the neighborhood of $960 million in DraftKings. Trading under the code DKNG, this Boston-based operator is now also branching off into the interactive gaming sector, or in lay terms, online casinos.
Paysafe
Here is a company that operates within the gambling industry but does not provide any betting services. The Paysafe Group is an online payment provider with headquarters in the Isle of Man. It has popular e-wallets Neteller and Skrill under its umbrella. These have gotten designed to cater to online gamblers. Paysafe is new to the US market, attaining a public listing through a deal with Foley Trasimene Acquisition II in March. The internet casino sphere is a booming field that should reach a global size of $158 billion by 2028. Paysafe’s assets, Neteller and Skrill, allow it a premium position to process gambling payments throughout the US. It also has an extensive relationship with European betting juggernaut Flutter Entertainment. Since Paysafe has a connection with roughly 75% of US operators, it is in an excellent spot and should be a relatively safe investment.
VICI Properties
Based in New York, Vici got birthed four years ago when it split from Caesars Entertainment Corporation. It is a REIT or a real estate investment trust that owns twenty-nine racetracks, hotels, and casinos. In March, news broke that Vici struck an agreement to purchase the Venetian for $4 billion. In August, it announced that it would engage in a Strategic Acquisition of MGM Growth Properties LLC worth $17 billion. In Q1 of this year, its reported revenues were $374 million, beating projections by one million. During the summer, Vici’s stocks showed a 22% gain year to date, remaining steady throughout 2021.
Wynn Resorts
Founded by Kazuo Okada and Steve Wynn, Wynn Resorts is a Paradise, Nevada operator of high-end casinos and hotels. In its nineteen-year existence, this corporation developed six properties. That includes three apiece in Las Vegas and Macau and one in Everett, Massachusetts. In May, Wynn completed its merger with blank check company, the Austerlitz Acquisition Corporation, a move that should allow it to seize a vaster North American audience. Despite Wynn Resorts’ operating revenues dropping 23%, their stock price over the summer was up 27% compared to the same period last year. It now trades at around $90.
About the Author
Shelly Schiff has been working in the gambling industry since 2009, mainly on the digital side of things, employed by OnlineUnitedStatesCasinos.com. However, over her eleven-year career, Shelly has provided content for many other top interactive gaming websites. She knows all there is to know about slots and has in-depth knowledge of the most popular table games. Her golden retriever Garry occupies most of her leisure time. Though, when she can, she loves reading Jim Thompson-like crime novels.
