15 Best Gambling Stocks to Buy Now
In this article, we discuss the 15 best gambling stocks to buy now. If you want to skip our detailed analysis of these stocks, go directly to 5 Best Gambling Stocks to Buy Now.
In 2020, as a result of the lockdown in reaction to the global pandemic, several brick-and-mortar casinos saw a sharp drop in revenue with casinos and bookies operating at a reduced capacity and others forced to shut down. However, with technologically-driven transformational advances and the resumption of brick and mortar casinos, the gambling industry is set to be among the fastest-growing in the world with over 1.6 billion gamblers worldwide. According to Research and Markets, the worldwide gambling market is predicted to expand from $465.76 billion in 2020 to $516.03 billion in 2021, at a CAGR of 10.8%.
The Rise of Online Gambling
While many brick-and-mortar casinos were forced to shut down during the global pandemic, online gambling grew in popularity. The internet gambling sector saw a potential economic opportunity as the pandemic hindered physical engagement. According to a report from The Business Research Company, the online gambling market is predicted to increase at a 12.0% annual pace from $58.96 billion in 2019 to $92.86 billion in 2023 at a CAGR of 10.4%.
One of the top companies in online gambling DraftKings Inc. (NASDAQ:DKNG) saw a huge increase after its IPO in 2020. The company was one of the pioneers who started their online presence in 2018 offering online versions of casino games like slots and roulette, as well as sports betting. During the pandemic, as the world of online gambling flourished, DraftKings Inc. (NASDAQ:DKNG) seized the chance to expand its platform. In Iowa, the corporation launched retail and online sports betting, and it recently launched iGaming and online sports betting in Pennsylvania.
The development of online casinos drew the attention of many established casinos. For example, in 2020, global entertainment company MGM Resorts International (NYSE:MGM) launched its mobile betting app BetMGM in partnership with Roar Digital, LLC. In the first three months of 2021, the app made $163 million, accounting for 90% of its total revenue in 2020. MGM Resorts International (NYSE:MGM) currently has a market cap of $18.61 billion and offers a dividend yield of 0.026%.
Earlier this year, PENN National Gaming, Inc. (NASDAQ:PENN) also saw positive returns in the online gambling world and announced plans of launching its Barstool Sportsbook mobile app in Virginia which was earlier launched in Pennsylvania, Michigan, Illinois, and Indiana. The app has over 72,000 registered users in Pennsylvania alone. In the first quarter of 2021, PENN National Gaming, Inc. (NASDAQ:PENN) reported $1.27 billion in revenue which was driven by contributions from the online Barstool Sportsbook and our iCasino platforms.
Another popular casino that jumped into the online gambling trend is high-end hotel and casino developer Wynn Resorts Limited (NASDAQ:WYNN). Wynn Resorts's subsidiary Wynn Interactive will merge with Austerlitz Acquisition Corporation, a blank-check provider, for a $3.2 billion combined valuation to take its platform public via a SPAC. According to Wynn Resorts Limited (NASDAQ:WYNN)'s CEO, the company had to seize the opportunity presented by the increasing expansion of internet gaming.
Pixabay/Public Domain
Should I Invest In Gambling Stocks?
The gambling industry will continue to thrive with more countries legalizing the platform. According to an analysis by Morgan Stanley, 12 states are targeting to legalize sports betting in 2021. In line with this, many startup companies are betting on the industry such as the multi-category gambling platform Bet365 Group Ltd. The platform allows its users to bet on various sports online and offers online casino games. The company was founded in 2000 and already has over 23.1 million active users.
Another stock that is betting on the gambling industry is Gambling.com. The company is set to make its debut in the public market this year under the ticker symbol, GAMB. According to Gambling.com, the price of a share of company stock is currently estimated to be between $11 and $13 per ordinary share. The company currently has operations on 32 websites in 13 countries. In 2020, the company's revenue came in at $27.98 million.
Although the gambling industry had a pause during the COVID-19 pandemic. With its ability to adapt to technological advancements, the industry will continue to grow. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and May 29th 2021 our monthly newsletter’s stock picks returned 206.8%, vs. 91% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, let’s start our list of the 15 best gambling stocks to buy now. The stocks are added to the list are based on hedge fund sentiment, analysts’ ratings, and fundamentals.
15 Best Gambling Stocks to Buy Now
15. Flutter Entertainment PLC (OTCMKTS: PDYPY)
Number of Hedge Fund Holders: N/A
Flutter Enternatinment PLC (OTCMKTS:PDYPY) operates as one of the biggest sports betting and gaming companies worldwide. The company offers its services through its four divisions, online, the US, retail, and Australia. It ranks 15th on our list of the 15 best gambling stocks to buy now.
In 2016, the company was formed by a merger of Paddy Power and its competitor Betfair. In 2020, the company entered an acquisition agreement with worldwide gaming and entertainment technology provider The Stars Group (TSG). TSG International, and Sky Betting and Gaming will be the first two reporting divisions of the newly amalgamated company.
Just Like MGM Resorts International (NYSE:MGM), PENN National Gaming, Inc. (NASDAQ:PENN), Wynn Resorts Limited (NASDAQ:WYNN), and DraftKings Inc. (NASDAQ:DKNG), Flutter Entertainment PLC (OTCMKTS: PDYPY) is one of the best gambling stocks to buy now.
In the first quarter of 2021, Flutter Entertainment PLC (OTCMKTS: PDYPY) revenue came in at $2.05 billion, up 32% year over year. The increase was driven by an uprise since the Covid-19 in its global online player base, where 59% of the company's revenue came from customers in Australia.
14. Churchill Downs Incorporated (NASDAQ: CHDN)
Number of Hedge Fund Holders: 19
Churchill Downs Incorporated (NASDAQ: CHDN) was founded in 1875 and operates as one of the oldest sports betting organizations worldwide. The company has grown its properties with various tracks in different parts of Kentucky, Louisiana, and Florida. The company ranks 14th on our list of the 15 best gambling stocks to buy now. The most recent acquisition of the company was live racing racetrack Turfway Park located in Northern Kentucky. The deal was closed at a total consideration of $46 million in cash and included all outstanding assets of Turfway Park.
This June, Churchill Downs Incorporated (NASDAQ: CHDN) was initiated at Macquarie with an Outperform rating and a $254 price target. Analyst Jordan Bender believes that revenue from historical racing machines in Kentucky might increase three to four times from 2020 levels.
Just Like MGM Resorts International (NYSE:MGM), PENN National Gaming, Inc. (NASDAQ:PENN), Wynn Resorts Limited (NASDAQ:WYNN), and DraftKings Inc. (NASDAQ:DKNG), Churchill Downs Incorporated (NASDAQ: CHDN) is one of the best gambling stocks to buy now.
In the first quarter of 2021, Churchill Downs Incorporated (NASDAQ: CHDN) reported revenue of $152.0 million, up 4.1% compared to the same period of 2020. Churchill Downs Incorporated (NASDAQ: CHDN) has also gained 33% in the past 12 months.
13. GAN Limited (NASDAQ: GAN)
Number of Hedge Fund Holders: 23
GAN Limited (NASDAQ: GAN) is a provider of software solutions for online casino gaming. The company offers online casino gaming through its freemium, simulated iGaming, and real money iGaming. It ranks 13th on our list of the 15 best gambling stocks to buy now.
Earlier this year, GAN Limited (NASDAQ: GAN) acquired Coolbet for $175.9 million. Coolbet's patented sports betting technology will be included in GAN's current B2B technology which will be available to users by the third quarter of 2021.
This May, B. Riley kept its Buy rating on GAN Limited (NASDAQ: GAN) with a $26 price target. Analyst David Bain commented that the company's online sports betting market share are expected to increase with its new sports betting platform.
In the first quarter of 2021, GAN Limited (NASDAQ: GAN) reported revenue of $27.98 million, up 263% year over year. In the second quarter of 2021, the company projects revenue of $34-$35 million and an adjusted EBITDA ranging from $3.0 million- to $7.0 million.
Just Like MGM Resorts International (NYSE:MGM), PENN National Gaming, Inc. (NASDAQ:PENN), Wynn Resorts Limited (NASDAQ:WYNN), and DraftKings Inc. (NASDAQ:DKNG), GAN Limited (NASDAQ: GAN) is one of the best gambling stocks to buy now.
As of the end of the first quarter of 2021, 11 hedge funds out of the 866 tracked by Insider Monkey held stakes in GAN Limited (NASDAQ: GAN) worth roughly $64 million.
Wasatch Micro Cap Fund mentioned GAN Limited (NASDAQ: GAN) in its Q3 2020 investor letter:
“Another weak stock in the Fund was GAN Ltd. (GAN). Based in the U.K., the company provides Software-as-a-Service (SaaS) solutions for online casino gaming and online sports betting. Shares of GAN tumbled in August after the company announced that a large customer, FanDuel, had deployed its own proprietary digital wallet. The news—which meant that GAN would no longer be providing the digital wallet for FanDuel Sportsbook—disappointed investors, who had sent GAN’s stock soaring during the first half of 2020 on hopes that the return of professional sports during the pandemic would substantially boost online gambling. While the loss of the FanDuel project was disappointing, GAN remains profitable on a top-line basis and we believe it is well positioned to benefit from future growth in online gambling.”
12. SciPlay Corporation (NASDAQ: SCPL)
Number of Hedge Fund Holders: 23
SciPlay Corporation (NASDAQ: SCPL) is an online developer of digital games including social casino games such as Gold Fish Casino, 88 Fortune Slots, and MONOPOLY slots and it ranks 12th on our list of the 15 best gambling stocks to buy now.
Earlier this month, the company acquired Finland-based mobile games developer Koukoi Games Oy. The acquisition will improve the online gaming platform and accelerate the company's expansion of casual gaming to meet the growing market.
This March, Macquarie raised its price target on SciPlay Corporation (NASDAQ: SCPL) from $23 to $25, keeping an Outperform rating on the company’s shares. Analyst Chad Beynon commented that the initial public offering of layika and the sale of Glu Mobile (GLUU) is good news for SciPlay Corporation (NASDAQ: SCPL).
In the first quarter of 2021, SciPlay Corporation (NASDAQ: SCPL) reported revenue was $151.1 million, beating consensus estimates of $145.49 million. SciPlay Corporation (NASDAQ: SCPL) has gained 10% year to date and 2.95% in the last twelve months.
As of the end of the first quarter of 2021, 23 hedge funds out of the 866 tracked by Insider Monkey held stakes in SciPlay Corporation (NASDAQ: SCPL) worth roughly $95.5 million.
11. Everi Holdings Inc. (NYSE:EVRI)
Number of Hedge Fund Holders: 24
Everi Holdings Inc. (NYSE:EVRI) is a global holding company. The company also manufacturers slot machines and offers financial equipment and services to casinos, and it ranks 10th on our list of the best gambling stocks to buy now.
This July, BTIG analyst Mark Palmer commented on Everi Holdings Inc. (NYSE:EVRI) and mentioned that the momentum driven by casino activity is long-term. The firm raised the price target to $30 from $25 and reiterated a Buy rating on EVRI.
In the first quarter of 2021, Everi Holdings Inc. (NYSE:EVRI) had an EPS of $0.21, beating consensus estimates of $0.04, the company’s revenue was $139.1 million, beating year over year revenue of $113.31 million. Everi Holdings Inc. (NYSE:EVRI) has gained 60% in the past 2 months and 66% year to date.
Just Like MGM Resorts International (NYSE:MGM), PENN National Gaming, Inc. (NASDAQ:PENN), Wynn Resorts Limited (NASDAQ:WYNN), and DraftKings Inc. (NASDAQ:DKNG), Everi Holdings Inc. (NYSE:EVRI) is one of the best gambling stocks to buy now.
As of the end of the first quarter of 2021, 24 hedge funds out of the 866 tracked by Insider Monkey held stakes in Everi Holdings Inc. (NYSE:EVRI) worth roughly $217 million.
10. Red Rock Resorts, Inc. (NASDAQ:RRR)
Number of Hedge Fund Holders: 28
Red Rock Resorts, Inc. (NASDAQ:RRR) is one of the leading gaming companies worldwide. The company has over 21 casinos and properties offering video poker, slot machines, tables games, and race and sports wagering. Red Rock Resorts, Inc. (NASDAQ:RRR) ranks 10th on our list of the best gambling stocks to buy now.
In May 2021, the company made a $650 million in cash agreement to sell the Palms Casinos Resorts to Stations Casinos LLC which was first announced in 2016.
This May, KeyBanc analyst Brett Andress raised his estimates for Red Rock Resorts, Inc. (NASDAQ:RRR) in light of the company’s improved free cash flow. Andress also raised the firm’s price target from $42 to $48.
In the first quarter of 2021, Red Rock Resorts, Inc. (NASDAQ:RRR) had an EPS of $0.92, beating estimates by $027. The company’s revenue was $352.6 million, down 6.6% year over year, mostly as a result of the COVID-19 pandemic's effects. Red Rock Resorts, Inc. (NASDAQ:RRR) has also gained 248% in the twelve months.
As of the end of the first quarter of 2021, 28 hedge funds out of the 866 tracked by Insider Monkey held stakes in Red Rock Resorts, Inc. (NASDAQ:RRR) worth roughly $607 million.
Diamond Hill Capital mentioned Red Rock Resorts, Inc. (NASDAQ:RRR) in its Q1 2021 investor letter. Here is what the fund said:
“Red Rock Resorts was another top contributor in Q1, as it has been since the pandemic-related market bottom in March 2020. Red Rock controls over half the Las Vegas locals market, where government legislation restricting greenfield development has effectively created a duopoly. Through a tough operating environment, management has meticulously controlled costs and improved the balance sheet and is delivering record margins. We believe there is tremendous pent-up demand waiting to be released amid post-pandemic reopening—on top of favorable conditions for economic expansion in Las Vegas, including an attractive tax environment driving in-migration.”
9. Melco Resorts & Entertainment Limited (NASDAQ:MLCO)
Number of Hedge Fund Holders: 29
Melco Resorts & Entertainment Limited (NASDAQ:MLCO) is an owner and developer of casinos based in Hong Kong. Melco casinos and gaming facilities can be found in parts of Asia and Europe. The company ranks 9th on our list of the 15 best gambling stocks to buy now.
In the first quarter of 2021, Melco Resorts & Entertainment Limited (NASDAQ:MLCO) had an EPS of $0.16, missing consensus estimates by $0.36, and the company’s revenue was $14.3 million, down from $52.9 million year over year. However, this July, CLSA upgraded Melco Resorts & Entertainment Limited (NASDAQ:MLCO) to an Outperform rating from a Buy rating with a $19.96 price target. Galligan mentioned that Macau Gaming's second-quarter performance has already been factored into the stock price.
As of the end of the first quarter of 2021, 29 hedge funds out of the 866 tracked by Insider Monkey held stakes in Melco Resorts & Entertainment Limited (NASDAQ:MLCO) worth roughly $728 million.
8. International Game Technology PLC (NYSE:IGT)
Number of Hedge Fund Holders: 37
International Game Technology PLC (NYSE:IGT) is a multinational gambling company. The company offers various gambling platforms such as gaming machines, lotteries, and sports betting. The company ranks 8th on our list of the best gambling stocks to buy now.
Earlier this month, the company signed a contract with Western Canada Lottery Corporation. The contact allows IGT to air "The Price Is Right" in Canada and introduce a market-specific package that allows users to determine the game they want to play.
This May, Truist analyst Barry Jonas raised the firm’s price target from $32 to $28 and kept its Buy rating. According to Jonas, the company's Q1 earnings has made him bullish on International Game Technology PLC (NYSE:IGT).
In the first quarter of 2021, International Game Technology PLC (NYSE:IGT) had an EPS of $0.44, and the company’s revenue was $1.02 billion, beating estimates of $876.18 million. International Game Technology PLC (NYSE:IGT) has gained 28% in the past 3 months and 29% year to date.
Just Like MGM Resorts International (NYSE:MGM), PENN National Gaming, Inc. (NASDAQ:PENN), Wynn Resorts Limited (NASDAQ:WYNN), and DraftKings Inc. (NASDAQ:DKNG), International Game Technology PLC (NYSE:IGT) is one of the best gambling stocks to buy now.
As of the end of the first quarter of 2021, 37 hedge funds out of the 866 tracked by Insider Monkey held stakes in International Game Technology PLC (NYSE:IGT) worth roughly $236 million.
Mittleman Brothers mentioned International Game Technology PLC (NYSE:IGT) in its Q3 2020 investor letter:
“International Game Technology (IGT), which rose by 25% on reopening optimism, was the second best performer in Q3. Frustratingly, it just lost all of those gains in late October on resurging COVID-19 cases and renewed lockdowns in Italy (which account for 35% of its sales). IGT does slot machines, casino management systems, lottery games and systems (78% market share in the U.S. state lotteries) and (increasingly) sports betting. Under normal conditions, and once COVID-19 subsides, these businesses generate a substantial and largely recurring stream of free cash flow, much of which was paid out as dividends pre-pandemic.
MIM believes a full recovery will happen much faster than analyst consensus expectations that imply a very low multiple of both EBITDA and FCF for such a high margin, stable and growing group of businesses. The pessimism due to IGT’s Italy exposure is vastly overdone at current valuations. At least some analysts acknowledge the prospect of much higher valuation for IGT, with “bull case” views of fair value in the mid to upper $20s (MIM’s target is $29, more than triple the current price of $8.68). MIM’s $29 price target implies 9x EBITDA and 15x FCF of $400M..." (Click here to see the full text)
7. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 41
VICI Properties Inc. (NYSE:VICI) is a real estate investment trust that specializes in Casino properties. The company operates over 29 casinos, hotels, and racetracks in the United States. It ranks 7th on our list of the best gambling stocks to buy now.
Earlier this year, the company announced plans of acquiring Venetian Resort Las Vegas from Las Vegas Sands Corp. (NYSE:LVS) in a $4.0 billion deal. The deal is expected to close by the end of 2021.
This June, Wolfe Research analyst Andrew Rosivach initiated coverage on VICI Properties Inc. (NYSE:VICI) with an Outstanding rating alongside a $47 price target. Rosivach mentioned that CIVI positive earnings will continue to grow with its continuous deal accomplishments.
In the first quarter of 2021, VICI Properties Inc. (NYSE:VICI) reported revenue of $374.3 million, beating the consensus estimate of $373.3 million. VICI Properties Inc. (NYSE:VICI) has gained 6% in the past 3 months and 22% year to date.
As of the end of the first quarter of 2021, 41 hedge funds out of the 866 tracked by Insider Monkey held stakes in VICI Properties Inc. (NYSE:VICI) worth roughly $875 million.
6. Penn National Gaming, Inc. (NASDAQ:PENN)
Number of Hedge Fund Holders: 42
Penn National Gaming, Inc. (NASDAQ:PENN) is one of the biggest operators of casinos and racetracks with over 44 facilities in the United States and Canada. The company ranks 6th on our list of the best gambling stocks to buy now.
This July, the company acquired operations of Hollywood Casino Perryville located in Maryland which was developed in 2010.
This April, Needham analyst Bernie McTernan initiated the stock with a Buy rating and a $151 price target.
In the first quarter of 2021, Penn National Gaming, Inc. (NASDAQ:PENN) EPS was $0.55 per share, the company reported revenue of $1.27 billion, up from $1.12 billion year over year. Penn National Gaming, Inc. (NASDAQ:PENN) has gained 95% over the last twelve months.
Just Like MGM Resorts International (NYSE:MGM), PENN National Gaming, Inc. (NASDAQ:PENN), Wynn Resorts Limited (NASDAQ:WYNN), and DraftKings Inc. (NASDAQ:DKNG), Penn National Gaming, Inc. (NASDAQ:PENN) is one of the best gambling stocks to buy now.
As of the end of the first quarter of 2021, 42 hedge funds out of the 866 tracked by Insider Monkey held stakes in Penn National Gaming, Inc. (NASDAQ:PENN) worth roughly $907 million.
Baron Growth Fund mentioned Penn National Gaming, Inc. (NASDAQ:PENN) in its Q1 2021 investor letter:
“Shares of regional casino operation Penn National Gaming, Inc. increased in the quarter on strong share gains in the online sports betting and gaming markets in Michigan and the opening of the large Illinois online sports betting market. Strong sequential growth in revenue and sustained margin improvement in its brick and mortar operations also helped boost the share price. We think these positive developments will lead to improvements in the company’s balance sheet and its EBITDA to free cash flow conversion.”
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Disclose. None. 15 Best Gambling Stocks to Buy Now is originally published on Insider Monkey.
