If you thought it took a dapper suit and a pocketful of greenbacks with a ticket to Vegas to enjoy gambling, you are wrong. Over the years, gambling has “come home” to users with mobile gaming, attractive online slots and more. Instead of becoming a splurge, gambling has grown into a part of people’s lives.
With sports betting legalized in the US, we expect the gambling sector to explode. Smart investors know that this is the right time to jump in and make merry. If you are interested in growing your portfolio via the endless possibilities provided by the gambling industry, we have the right stocks for you. Read on for our picks for 5 of the best gambling stocks you can buy right now.
Caesars Entertainment Corporation (CZR)
Can you really think about any other stock in the gambling industry? Caesars Entertainment has become the synonym of gambling over the years. According to its most recent quarterly report, the company lost $0.09 per share, up from $0.03 per share year-on-year.
During this year, Caesars has added 82.3% to its shares as against 22.8% of the S&P 500, making it an interesting stock pick. During Q3, it passes the Zacks Consensus Estimate for revenue by 2.59% by recording a figure of $2.24 billion. It has beat consensus estimates for revenue for four straight quarters.
Caesars is the de facto leader of the gambling industry and has outperformed other companies consistently. If there is one stock you can bet on in this sector, Caesars should be it.
MGM Resorts International (MGM)
Another popular name in the gambling industry, MGM Resorts is a safe betting option for people who want to avoid risk. MGM has been trying to gain an edge in the US sports betting market which could help its prospects in the medium and long term. The company also has a significant presence in China.
For Q3 2019, its earnings beat Zacks Consensus Estimates by reporting 31 cents per share. It marks a 34.8% increase year-on-year. Its total revenue missed the consensus by 1.7% at a reported figure of $3,314.4 million. However, the company was able to improve its top line by 9.4% thanks to China operations. The company’s revenue at Las Vegas Strip casinos has also increased, which ensures a good space for growth.
Scientific Games (SGMS)
If you are looking for a stock that could provide you with an edge over its competition because of its online-first strategy, you should buy Scientific Games. The company creates content, services, and products for digital gaming and lottery industries and will have a significant presence in the sports betting market. Since it will be an infrastructure provider in these markets, its chances of growth are considerably high. Note that its current quarter earnings growth rate is expected to be 114.3% making it an amazing stock to add to your portfolio.
The company’s third-quarter results are spectacular as well. Its revenue for three-months ending September 30, 2019, grew by 4% to $855 million. In Q3 2018, it was $821 million. The company registered growth across all segments, paving the way for more sustainable and balanced growth. Interestingly, its net income this quarter was $18 million. In Q3 2018, it experienced a net loss of $352 million. Last year it spent over $300 million in restructuring, which could pay off in the near term.
International Game Technology (IGT)
IGT is an innovative gaming company with an extensive focus on social and digital gaming which improves its prospects and makes it a good choice for your portfolio. It is expected to post a year-on-year improvement in quarterly revenues for Q3. According to Zacks, the firm could register quarterly earnings of $0.35 per share in Q3 alongside a revenue if $1.17 billion.
This month, the company deployed its multi-site live streaming system called the Dynasty Electronic Table Game (ETG). The terminals will provide blackjack and baccarat games from the Niagara Fallsview Casino to Casino Niagara, its sister property. With more innovative solutions, the company could grow your portfolio in the years to come.
The Stars Group (TSG)
The Star Groups’ quarterly earnings beat the Zacks Consensus Estimate in Q3. Zacks expected the earnings to be $0.42 per share while it was reported at $0.50 per share. It also marked a significant increase since Q3 2018’s $0.45 per share. The company also posted a 19.05% earnings surprise. It is important to note that TSG has beat estimates for two out of the last four quarters. With a revenue of $622.48 million, it beat Zacks consensus by 3.78%.
In October 2019, it’s stock price went up by 44.5% marking investor confidence and an overall positive stance on the company. Most of the upward price movement was because of Flutter Entertainment’s acquisition announcement of the company. The Ireland-based Flutter owns gambling industry behemoths like Betfair and Paddy Power alongside fantasy sports platform FanDuel. Overall, TSG is going to be a part of a powerful group that could improve its prospects in the future.
Be careful while buying gambling stocks
There is nothing inherently wrong with gambling stocks. After the Supreme Court struck down PASPA last year, there is increased activity in this field. Both casino operators and offshore gambling companies are now interested in the US market. You must note that gambling is an industry riddled with a patchwork of regulations. States are free to create their own betting laws, but the regulations can vary widely, increasing the tax burdens, paperwork, and headaches for gambling companies.
While investing in a gambling stock, ensure that you buy a company that has vested interests in the new sports betting markets. As this field has only started to grow, companies with sports betting offerings will have a better time as compared to companies limited to casinos. You should also check if the company has a significant range of digital/mobile offerings. These two sub-sectors are the most important for the growth of the industry. Finally, focus more on reputed brands and companies with deeper pockets given the fickle nature of the industry.
Disclaimer: The author does not have any position in the stocks mentioned. Also, the author may not be a certified financial advisor, and the opinions expressed should not be treated as investment advice.
Buying and selling of securities carry the risk of monetary losses. Investors are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions.