If you are looking to purchase top gambling stock, it is important to understand the gambling industry. According to a report by The Business Research Company, the gambling industry worldwide grew to $702.45 billion in 2023 from $449.04 billion in 2022.
The growth represents a (CAGR) of 56.4%, one of the highest of any industry. Another report by Statista projects that revenue from the US sports betting sector will reach $7.62 billion in 2023.
With more US states creating favorable legislation for sports and online gambling, now is one of the best times to get into gambling stock. Below are some of the best gambling stocks you can acquire.
DraftKings Inc. (NASDAQ: $DKNG)
DraftKings has been doing well in 2023. The stock is up +176.28% YTD. That is a huge shift from 2022, when the stock steadily declined in the same month.
The growth is due to an increase in Monthly unique players (MPUs), who increased by 44% to 2.2 million in the Q2 earnings report. The report said the adjusted quarterly profit increased by 88% to $875 million.
The company has also increased its FY revenue growth guidance to 56%. Additionally, its customer acquisition cost has gone down by 16%.
Its earnings per share of $-0.17 was also lower than the project’s $-0.24. When the customer acquisition cost is lower than expected, with customers paying more for bets, the company is on the right track.
International Game Technology PLC (NYSE: IGT)
International Game Technology PLC is a UK-based firm focusing on slot machines and other gambling products. In Q2 2023, the company reported solid revenue and profit growth across all segments.
Its EPS was also up to $0.23 from just $0.02 in the same period in 2022.
Its revenue was up 3% year-over-year to $1.06 billion. On a year-to-date basis, the company stock is up 32.64%. That is a strong performance, considering the S&P 500 is only up 13.58% YTD.
The figures show that IGT is a great gambling stock to buy.
MGM Resorts International (NYSE: MGM)
MGM Resorts International is an S&P 500 entertainment company with locations worldwide. It offers best-in-class casinos, hotels, conference space, restaurants, and great theatrical entertainment experiences.
MGM Resorts International stock is up 8.50% YTD. Analysts give it a strong buy rating with a price target of $56.58, representing a 56.82% upside. Additionally, analysts consider the stock’s price of $36.04 as of October 18, 2023, undervalued.
In its most recent Q2 earnings report, the company reported net revenues of $3.9 billion, representing a 21% increase from last year’s quarter. Its EPS was $0.59 against the expected $0.52, a surprise of 13.94%.
With the company posting great financial figures thus far in 2023, MGM is a great gambling stock to buy right now.
Flutter Entertainment PLC (PDYPY)
Ireland-based Flutter is an excellent example of an overseas firm doing great in the sports betting market. The company is behind major brands such as FanDueal, PokerStars, and PaddyPower.
The stock is up 14.90% YTD as of October 18, 2023, and is up 28.02% in the past 12 months.
The analysts give it a moderate buy rating, with a price target of $87.98, a 9.0% upside. In its H1 interim report, the company reported revenue of $5.84 billion, representing a year-over-year increase of 42%.
The exceptional growth was mainly due to the strong performance of its US business.
With great growth numbers, PDYPY is a great gambling stock to consider.
Penn National Gaming (PENN)
Penn National Gaming is a casino operator in 20 US states. In 2020, the company shifted to online sports betting when it acquired a 36% stake in BarStool. It followed that up with an acquisition of theScore in 2021.
The company’s online sportsbook has a license in 13 US states, and its online casino has a license in five states. It also operates retail sportsbooks in 24 of its physical casinos.
Penn National Gaming has launched a massive marketing campaign. It aims to spend $150 million annually on marketing on ESPN for the next ten years.
For its online sportsbook, the company has been less aggressive. It opts for more targeted ads instead of a nationwide campaign. Instead, it relies on organic marketing via media segments of BarStool and the Score to gain reach.
The result has been that its online sportsbook is more profitable compared to others, which invest massive amounts into marketing their products.
With its operations limited to Canada and the US, PENN stock is a gamble on the long-term growth of the North American sports betting industry.
Are Gambling Stocks Worth It?
In a recent report by Houlihan Lokey, an investment-banking firm, the US online gambling industry was worth $10 billion in 2021. It also found that the illegal iGaming sector in the US was worth three times the legal industry.
As favorable legislation continues to pass in various states, the size of gambling stocks will continue to rise.
This is because they are expanding into an already existing user base. Take time and look at the figures of each gambling stock, including a careful fundamental analysis, to find what works for you.
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