The gambling industry in the U.S. is on fire. Five years ago, sportsbooks nationwide had a $4 billion betting handle. In 2024, sports betting is a $140 billion industry.
The Supreme Court gave states the authority to legalize sports betting in 2018. Since then, thirty states have legalized the sector. Seven jurisdictions have also introduced online casino games like slots, poker, and blackjack.
If you’re a stock investor, there has never been a better time to buy gambling stocks. Now, this isn’t financial advice. Stocks can be a risky investment. Index funds are a safer option for most people.
However, if you’re determined to buy gambling stocks, here are the best companies to invest in:
Flutter Entertainment PLC
Flutter Entertainment is arguably the biggest online gambling brand in the world. It owns FanDuel, PokerStars, Paddy Power, and a few more sportsbooks in Europe.
FanDuel is one of the fastest-growing online betting sites in the country. It has a 45% market share of America’s sports betting market. It also runs an Internet casino.
On the other hand, PokerStars is one of the top three gambling brands in the world. Paddy Power is huge in Europe whereas Betfair, Sky Casino, and Sky Bet all have a presence in emerging casino markets.
In non-technical language, Flutter Entertainment is a solid bet. It owns multiple top casinos and sportsbooks. It has also been around for decades. What’s more, Flutter Entertainment has appreciated by 800% since its merger.
MGM Resorts
In the first two years after sports betting became legal, the iGaming industry was dominated by new entrants. Then MGM Resorts launched an online betting site in partnership with Entain Holdings.
The casino, BetMGM, has skyrocketed to become one of the best-rated gambling sites in the country. According to the latest info, BetMGM’s success can be attributed to its top online casino bonuses, fast payouts, mobile games, and professionally optimized website.
While you can’t invest in BetMGM directly, you can buy MGM Resorts shares. The company owns over a dozen casinos across Las Vegas, Michigan, New Jersey, Maryland and Massachusetts. They include the MGM Grand, Mandalay Bay, Bellagio, Park MGM, and the Excalibur Hotel & Casino.
Similar to Flutter Entertainment, MGM Resorts is a safe bet. It is an established brand with lots of casinos, hotels, and other businesses. Established companies may not tenfold your money. But they are also more likely to withstand the test of time.
DraftKings
Had you invested in DraftKings when it became available for trading in 2020, you would have tripled your money by now. The company’s stock was worth $10 in early 2020. It peaked at $71 in 2021 but has since corrected to $32 at the time of writing.
Is DraftKings a great bet? DraftKings accounts for 36% of all online bets, ranking just behind FanDuel in market dominance. The Daily Fantasy Sports website cum Internet sportsbook operates in 25 states, including New Jersey, Pennsylvania and Washington D.C.
As a relatively new sportsbook, DraftKings stock price fluctuates more often than companies like Flutter Entertainment. However, the advantage is that the price has grown gradually over time. If you can withstand its sharp fluctuations, it is a great stock option.
Penn Entertainment
Barstool Sports fans know Penn Entertainment as the company that sold Barstool Sports to David Portnoy for just $1. However, this brand is a massive gambling conglomerate with 43 properties.
Some of the most famous casinos under Penn Entertainment include Hollywood Casino, Boomtown, Ameristar, the Score, and ESPN Bet. Penn Entertainment has stakes in both land-based and online casinos.
However, the most important reason to buy Penn Ent shares is that the company has been profitable since 1968. Similar to most companies, Penn Entertainment has its highs and lows.
As an investor, buy shares during a market downturn. Sell after they appreciate. Making the mistake of buying high and selling low is one of the reasons most stock investors lose money.
Churchill Downs
If you follow the historical performance of Churchill Downs, you may want to assign it a large portion of your portfolio. Bar the 2020 correction that affected most companies, Churchill Downs Shares have been on a roll since 2000.
In the last decade, shares went from $15 to a high of $146 last year. This translates to a 900% return on your investment. What’s the reason behind Churchill’s great performance in the market?
Like most successful businesses, Churchill Downs has a long-standing reputation for being a great moneymaker. The ability to generate revenues is an important marker for investing in stocks.
If a company has been generating profits for over a decade, it is probably a great investment. This is specifically true if the revenues keep growing and projections indicate the trend will continue. Indeed, gambling is projected to grow by double digits in the next decade.
Caesars Entertainment
Caesars isn’t just one of the best casinos in Las Vegas. It is also one of the best-performing gambling options. Like MGM Resorts, Caesars Entertainment has been buying out its competitors left, right, and center.
It owns Flamingo Las Vegas, Harrah’s Lake Tahoe, Eldorado Reno Resort, Circus Circus Reno Hotel, and Nobu Hotel Las Vegas. What’s more, Caesars owns an internet casino aptly named after its brand.
Unlike Churchill Downs, Caesars has been a bit unpredictable in the past few years. It recovered incredibly fast after COVID-19. However, its share price has dropped from $110 to its current price of $35.
For clarity, price action alone isn’t enough to predict future prices. A properly diversified company like Caesars could bounce back to its all-time high quickly.
Boyd Gaming Corporation
Many top hedge fund managers believe Boyd Gaming is a great stock option for gambling investors. The company is up 125% since 2019 and 500% in the last decade. Although Boyd specializes in land-based gaming operations, it now also operates online through a partnership with FanDuel. Last year, Boyd received multiple buy signals from banks and financial experts after surpassing its annual revenue targets. If the trend continues, investors should expect greater returns in the future.