In this article, we will discuss 16 Best Gambling Stocks To Buy Now.
The gambling industry, like many other industries around the world, was severely affected by the COVID-19 pandemic and still continues to be adversely affected in some regions due to travel restrictions. However, the shutting down of casinos meant that the online gambling industry saw explosive growth in its traffic as people migrated to digital platforms due to an absence of physical access to casinos. Despite the negative consequences of COVID-19, the gambling industry is set to grow as the legalization of the industry in the United States is seen as a catalyst for growth. The total addressable market of the U.S sports betting industry is estimated to reach $37 billion by 2023, expected to grow at a high CAGR of 40% from its 2019 base, as per Goldman Sachs.
Our Methodology
We picked the most popular gambling and gaming stocks from the database of 920 elite hedge funds tracked by Insider Monkey as of the end of the third quarter.
Best Gambling Stocks To Buy Now
16. NeoGames S.A. (NASDAQ:NGMS)
Number of Hedge Fund Holders: 13
NeoGames S.A. (NASDAQ:NGMS) is an iLottery company that operates globally and provides business-to-government (B2G) and business-to-business (B2B) solutions and services to its customers. The company extended its operations by acquiring 99.31% of Aspire Global PLC for $480 million in June 2022. The company’s services include iGaming, casino games, and sports betting, which it provides through its three subsidiary companies: Aspire Global, Pariplay, and BtoBet.
On October 04, 2020, NeoGames S.A. ‘s subsidiary, Pariplay, was approved to operate in Connecticut. The company will now be able to run its operations in five states throughout the United States. The company is already operational in New Jersey, Pennsylvania, West Virginia, and Michigan.
According to Insider Monkey database, 13 hedge funds held stakes in NeoGames S.A. at the end of the third quarter ending September 2022.
In addition to NeoGames S.A., MGM Resorts International (NYSE:MGM), Caesars Entertainment, Inc. (NASDAQ:CZR), and Las Vegas Sands Corp. (NYSE:LVS) are included in our list of 16 best gambling stocks to buy now.
15. Genius Sports Limited (NYSE:GENI)
Number of Hedge Fund Holders: 21
Founded in 2001 as sports-betting data provider, Genius Sports Limited (NYSE:GENI) has transformed into a renowned sports tech company. The company provides its services to sports leagues and federations around the world by allowing them to collect and assess their data to strengthen fan engagement.
On August 17, 2022, Bernie McTernan, an analyst at Needham, increased his target price on Genius Sports Limited to $7 after the announcement of the company’s Q2 results. The analyst currently has a Buy rating on the stock and believes that Genius Sports Limited is continuing on its growth trajectory due to the success of the company’s land and expand strategy. As per Insider Monkey database, 21 funds remained bullish on the company at the end of Q3 2022.
Here is what Alger Small Cap Focus Fund has to say about Genius Sports Limited in its Q4 2021 investor letter:
Genius Sports provides online sportsbooks with data from sports leagues. We view it as a picks-and-shovels sports betting company, so it isn’t dependent on the success of an individual gambling operator. The global online sports betting (OSB) market is forecast to grow from approximately $31 billion in gross gaming revenue (GGR) in 2020 to approximately $65 billion in 2025, a compound annual growth rate of 16%, and we believe Genius is positioned to increase its market share. The company has a 40% to 50% market share of sports events currently and an ambitious target to reach a 5% take-rate on this global gaming market compared to its current take-rate of 1.75%. The take-rate is the portion of gross revenues generated by online gambling operators that Genius receives.
Genius is levered to the U.S. sports betting total addressable market given the company’s NFL data contract and in our view is well positioned to benefit from structuring of legalized OSB in New York. We believe the structure is unfavorable for online gambling operators, but could potentially be positive for providers of sports data, especially given that New York mandates the use of official data. In our view, Genius is also well positioned to benefit from the increasing importance of official data, a growing ad-tech business and the potential to cross sell additional services to sportsbooks, such as managing risk and trading of betting markets and streaming services. We see 2022 and 2023 as big launch years for online sports betting (i.e., more states legalizing OSB), which could benefit Genius because the company receives a share of operator gross gaming revenue and can monetize its services with its ad-tech business).
Shares of Genius Sports were volatile during the fourth quarter due to concerns about expiry of a pre-IPO shareholder lockup that occurred in mid-November following the release of thirdquarter results. When releasing results, the company lowered its earnings before interest, taxes, depreciation and amortization (EBITDA) guidance for 2022 to just “breakeven” given increased investments of $30 million to $40 million. A selloff of high-growth stocks in November and December also hurt the performance of Genius Sports shares. While 2022 and 2023 are likely to involve additional investments by OSB operators to support marketing as more states legalize online gaming, we think Genius Sports is currently well positioned to benefit from the expanding U.S. total addressable market and the company’s increased marketing.
14. Melco Resorts & Entertainment Limited (NASDAQ:MLCO)
Number of Hedge Fund Holders: 30
Headquartered in Hongkong, Melco Resorts & Entertainment Limited develops, owns, and operates casinos in Asia and Europe. The company employs over 17,000 people across multiple locations.
On November 02, 2022, Melco Resorts & Entertainment Limited reported Q3 2022 results, posting revenue of $241.83 million, down 45.8% YoY and missing the market estimate by $40.09 million. The company reported a Normalized EPS of -$0.52 for the quarter, missing the consensus estimate by $0.03. The management stated that the results during the quarter were greatly impacted by COVID-related headwinds, which included a lack of travel and the shutdown of the company’s casinos in Macau earlier in July.
As per Insider Monkey database, 30 hedge funds remained bullish on Melco Resorts & Entertainment Limited at the end of Q3 2022.
13. Churchill Downs Incorporated (NASDAQ:CHDN)
Number of Hedge Fund Holders: 28
Churchill Downs Incorporated (NASDAQ:CHDN) started off by operating a race track in Louisville, Kentucky, in 1875. Since then, it has grown into America’s leading racing, casino gaming, and online betting company. It owns and runs TwinSpires, one of the biggest and most successful online betting platforms.
On October 26, 2022, the company reported its results for the third quarter of 2022. Churchill Downs Incorporated posted strong results as it recorded a strong Normalized EPS of $1.62 for the quarter, beating the market estimates by $0.04. The sales of the company during the quarter stood at $383.1 million, decreasing by 2.5% YoY.
28 hedge funds were long on the company’s stock at the end of the third quarter, according to Insider Monkey database.
12. Wynn Resorts, Limited (NASDAQ:WYNN)
Number of Hedge Fund Holders: 23
Wynn Resorts, Limited (NASDAQ:WYNN) is a designer, developer, and operator of luxury hotels and casinos. The company was founded by Steve Wynn, who partnered with Elaine P. Wynn, and Kazuo Okada to establish Wynn Resorts Limited in 2002. The company’s operations facilities include Wynn Palace, Wynn Macau, Las Vegas Operations, and Encore Boston.
On September 26, 2022, David Katz, an analyst at Jefferies, upgraded his rating on Wynn Resorts, Limited to Buy. Moreover, the analyst increased his target price on the company’s stock to $75 from the previous $62. The Macau government recently announced that it is lifting lockdown restrictions and will be allowing visitors to travel from China, which is the reason behind the analyst’s optimism for Wynn Resorts, Limited.
As per Insider Monkey database, 23 hedge funds had stakes in Wynn Resorts, Limited at the end of the third quarter.
In its Q3 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks, and Wynn Resorts, Limited was one of them. Here is what the fund said:
In the most recent quarter, we exited the Fund’s holdings in Wynn Resorts, Limited due to: (i) ongoing COVID-19-related travel restrictions in China, Macau, and Singapore; and (ii) the Macau government’s announcement to tighten its casino regulatory oversight.
11. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 33
VICI Properties Inc. (NYSE:VICI) was established as a spin-off from Caesars Entertainment Corporation in 2017. The company operates as a real estate investment trust and runs its operations by owning, acquiring, and developing hospitality and entertainment properties across the United States.
On October 24, 2022, JPMorgan analyst Anthony Paolone increased his target price on VICI Properties Inc. to $36. The analyst currently has an Overweight rating on the company’s stock. The analyst has revised his estimate for the company’s adjusted funds from operation upwards, resulting in an increased price target.
According to Insider Monkey database, 33hedge funds owned stakes in the company at the end of the September quarter.
In its Q2 2022 investor letter, Meridian Funds, an asset management firm, highlighted a few stocks and VICI Properties Inc. was one of them. Here is what the fund said:
VICI Properties Inc. is a real estate investment trust company specializing in casinos and other entertainment properties. We invested in VICI in 2018 when earnings were declining due to dilutive acquisitions. Our thesis was that, as investors grew more comfortable with casinos as a REIT subsector, the value of their properties would increase. We also liked the defensive characteristics of the company, specifically the triple-net lease structure, which dictates that lessees pay all maintenance and capital expenditures, and the history of casino REITs with zero rent payments missed by casinos during either the global financial crisis or the 2020 pandemic. Furthermore, we were confident that VICI’s growth prospects would increase as more casinos monetized land holdings with VICI’s ability to use its extensive cash and liquidity to make acquisitions. VICI’s stock outperformed in the quarter due to its appeal as a fairly defensive investment and the news that it would be included in the S&P 500 Index. We maintained our position in VICI.
10. Bally’s Corporation (NYSE:BALY)
Number of Hedge Fund Holders: 11
Bally’s Corporation is a hospitality and casino company based out of Providence, Rhode Island, that operates across the globe. The company has been growing its business through online sports betting and iGaming. It presently owns and operates 14 casinos in 10 states, as well as a horse racetrack in Colorado, and has access to OSB licenses in 14 states.
On November 03, 2022, Bally’s Corporation reported results for Q3 2022, as it posted sales of $578.2 million for the quarter, up 83.7% YoY from the same period last year. The company posted a Normalized EPS of $0.01, missing the analysts’ estimates by $0.34. The company stated that adverse impacts of COVID-related lockdowns and negative foreign exchanges impact due to the strengthening of the dollar during the quarter impacted the company’s result during Q3 2022.
At the end of Q3 2022, 11 hedge funds in Insider Monkey’s database were long on Bally’s Corporation at the end of the quarter.
9. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 34
DraftKings Inc. (NASDAQ:DKNG) is a fantasy sports betting company. The company operates in approximately 17 countries powering sports and gaming entertainment. DraftKings Inc. established a marketplace in August 2021, offering curated non-fungible tokens (NFT) and supporting secondary-market transactions.
On November 08, 2022, Ryan Sigdahl, an analyst at Craig-Hallum, reduced his target price on the company’s stock to $21. While the analyst has maintained a Buy rating on DraftKings Inc., he believes that the near-term challenges have increased, which were reflected in the company’s recent quarterly results.
As per Insider Money’s proprietary database, 34 hedge funds are bullish on DraftKings Inc., as of the end of the third quarter.
In its Q4 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and DraftKings Inc. was one of them. Here is what the fund said:
Shares of DraftKings Inc. fell in the quarter, as stocks of online gaming companies were under pressure. Sports betting and i-gaming are rolling out with great fanfare and success across the country; however, investors seem concerned about competition and margins. Most participants are spending heavily on marketing and promotions, which is cutting into margins. We see this as worthy investment in customer acquisition at a moment in time when revenues are just building. We continue to believe that online sports betting and gaming will be enormous industries, that DraftKings will be a leading player. We think the business will have high margins as it matures. We believe we are underwriting the business conservatively and see much upside in the long term.
8. Light & Wonder, Inc. (NASDAQ:LNW)
Number of Hedge Fund Holders: 25
Light & Wonder, Inc. is a cross-platform global gaming company that allows its user to play different online games. It also sells land-based casino products. Light & Wonder, Inc. has a worldwide customer base and employs 5,000 people across the globe.
On October 06, 2022, Light & Wonder, Inc. acquired assets of House Advantage LLC in an all-cash transaction. The CEO of Light & Wonder, Inc. stated that the acquisition would allow the company to proceed forward on its growth and transformation plan and create value for customers of the company.
According to Insider Monkey database, 25 hedge funds owned stakes in the company at the end of the September quarter.
7. Gaming and Leisure Properties, Inc. (NASDAQ:GLPI)
Number of Hedge Fund Holders: 22
Based in Wyomissing, Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) operates as a real estate investment trust. The company focuses on acquiring, funding, and owning properties and leasing them to different casino gaming operators in triple-net lease arrangements. The company owns approximately 51 gaming and related facilities.
On October 27, 2022, Gaming and Leisure Properties, Inc. announced revenue for Q3 2022, reporting revenue of $333.8 million, an increase of 11.8% from Q3 2021, beating the market estimate by $7.29 million. Gaming and Leisure Properties, Inc. completed the lease transaction relating to the company’s Quad Cities and Black Hawk properties during the quarter, which increased the net cash rental income during the quarter by $3 million.
As per Insider’s Monkey database, 22 hedge funds owned stakes in Gaming and Leisure Properties, Inc. at the end of the September quarter.
Here is what Baron Funds specifically said about Gaming and Leisure Properties, Inc. in its Q2 2022 investor letter:
Gaming and Leisure Properties, Inc., a gaming REIT that owns the real estate of many casino operators, contributed to performance on the strength of its well-covered dividend yield and prospects for growth even in a recessionary economy. Its tenants remain solvent and flush with cash, which suggests that rent payments should remain steady regardless of the economic environment. A strong balance sheet allows for additional acquisitions, which should be accretive to the dividend and enhance shareholder returns.
6. PENN Entertainment, Inc. (NASDAQ:PENN)
Number of Hedge Fund Holders: 30
PENN Entertainment, Inc. (NASDAQ:PENN), formerly known as Penn National Gaming, offers integrated entertainment, sports content, and casino gaming throughout North America. It operates through the following business subdivision: Northeast, South, West, Midwest, and Other. The company changed its name to Penn Entertainment in August 2022, reflecting its broadening into sports content and other entertainment.
On November 03, 2022, John DeCree, an analyst at CBRE, reduced his target price on PENN Entertainment, Inc. to $54. Although the analyst is confident about the company’s ability to sustain its margins, he believes that the company reported higher-than-expected losses during Q3 2022, which led him to reduce his target price on the company.
At the end of the third quarter, 30 hedge funds in Insider Monkey database were bullish on the company.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks, and Penn Entertainment, Inc. was one of them. Here is what the fund said:
PENN Entertainment, Inc. declined 28.3% in the quarter and penalized performance by 71 bps. This was due to investor concerns that a potential recession would result in a slowdown or decline in growth. The company has seen no material change to its visitation or spending levels, and its earnings remain strong. Penn is generating strong cash flow to more than offset investments in its digital growth opportunity. It is using excess cash to buy back its stock. Penn is well positioned to weather a slowdown or recession and, if one does occur, the company should still generate revenue and EBITDA above pre-pandemic levels.
Management continues to use its excess cash for share repurchases and debt reduction as well as continuing investments in its digital businesses. We think the $50 million of losses this year from its digital business is modest in relation to Penn’s $1 billion of casino EBITDA. The losses from its digital business represent customer acquisition costs incurred as additional states legalize online gambling. Since it is far less expensive to retain existing customers than to acquire new ones, we expect marketing costs to decline as Penn builds its customer base.
Penn’s core bricks and mortar casino business remains strong, and the company has a healthy regional casino business and a strong balance sheet to fund its digital losses.
5. International Game Technology PLC (NYSE:IGT)
Number of Hedge Fund Holders: 34
International Game Technology PLC (NYSE:IGT) is a diverse company having its headquarters in London, England, providing users with entertainment and gaming experiences ranging from lotteries and gaming machines to sports betting and digital gaming. International Game Technology PLC has operations in more than 100 countries worldwide.
On September 20, 2022, International Game Technology PLC signed a 15-year contract with Ontario Lottery and Gaming Corporation. Under the contract, International Game Technology PLC will provide its self-serving lottery terminals to the company. This will be the first time that lottery players in Ontario will have access to self-serving technology.
As per Insider Monkey database, 29 hedge funds remained bullish on International Game Technology PLC at the end of the third quarter.
Here is what Palm Harbour Capital has to say about International Game Technology PLC in its Q4 2021 investor letter:
The second largest contributor was International Game Technology, the ItalianAmerican lottery and slot machine company, which we introduced in our first quarter 2020 letter and which contributed 78 basis points to performance. Early in the quarter, IGT’s main competitor, the highly levered Scientific Games, entered into a definitive agreement to sell its lottery business to Brookfield Business Partners for total consideration of $6.1 billion in cash and contingent payout. At $471 million last twelve months EBITDA (admittedly COVID affected, excluding unallocated central costs), Scientific Games lottery business was sold at trailing 13.0x. Scientific Games exited the lottery business to optimize the portfolio and aggressively de-lever its balance sheet. We believe IGT’s lottery business to be much higher quality and certainly larger. If we were to use a similar metric for IGT, including all corporate costs but excluding Gaming and Digital and Betting, we would have around 90% upside. We are willing to bet the Gaming and fast growing Digital and Betting segments are worth something as well. It seems the sell-side willfully ignores this transaction and sticks with their 7-8x EV/EBITDA valuation.
The company reported third quarter earnings with sales up by 21% year on year, EBIT up by 144% and leverage down to 3.8x from 6.4x at year-end 2020. Total Adjusted EBITDA improved by 42% with margin gaining 618 basis points. Following the recovery, management reinstated the dividend of $0.20 per share… (Click here to see the full text)
4. Boyd Gaming Corporation (NYSE:BYD)
Number of Hedge Fund Holders: 36
Founded in 1975, Boyd Gaming Corporation (NYSE:BYD) is considered one of the biggest entertainment companies in the United States. The company operates 28 casino properties across 10 different states. It is also involved in operating online casino businesses.
On October 26, 2022, Joseph Stauff, an analyst at Susquehanna, increased his target price to $72 on the company’s stock. The analyst currently has a Positive rating on Boyd Gaming Corporation and believes that the company is currently trading at an appealing valuation given its ability to generate stable cash flow.
As per Insider’s Monkey database, 36 hedge funds owned stakes in the company at the end of the third quarter.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Boyd Gaming Corporation was one of them. Here is what the fund said:
Boyd Gaming Corporation is one of the largest and most successful casino entertainment companies in the U.S. The company owns and operates 28 casino gaming properties in 10 states with a large presence in Las Vegas. Business conditions have been strong, yet the shares are valued at only 6 times 2022 estimated cash flow versus a long-term average of more than 9 times cash flow. The company maintains a strong and liquid balance sheet. Insiders own approximately 27% of the company. We believe Boyd is a compelling acquisition target.
3. Las Vegas Sands Corp. (NYSE:LVS)
Number of Hedge Fund Holders: 48
Las Vegas Sands Corp. is a developer and operator of high-end integrated resorts featuring luxury gambling, accommodations, retail, and meeting space for its customers. The company started from a single property in 1990 in Las Vegas and has now made its footprint in Macao and Singapore.
On October 20, 2022, George Choi, an analyst at Citi, raised his target price on Las Vegas Sands Corp. to $62. The analyst currently keeps a Buy rating on the company’s stock and, in a research note, stated that Las Vegas Sands Corp. is his “Global Top Pick,” given the company’s bright prospects in Singapore.
48 hedge funds are currently bullish on Las Vegas Sands Corp. as per Insider’s Monkey database.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Las Vegas Sands Corp. was one of them. Here is what the fund said:
Certain travel-related businesses remain cyclically depressed not secularly challenged and should rebound as economic strength re-emerges. For example, the business operations of Macau-centric casino and gaming companies such as Las Vegas Sands Corporation have yet to recover due to the ongoing COVID-19 challenges in China. We expect business to rebound sharply when economic growth recovers just as it did in Las Vegas. Las Vegas Sands Corporationis a global leader in the development and operation of luxury casino resorts in Macau and Singapore, and it maintains a liquid and investment grade balance sheet. It is currently valued at a significant discount to our assessment of replacement cost, and the company’s Macau operations are valued at only 7 times estimated cash flow.
2. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Holders: 53
MGM Resorts International is a holding company that engages in the ownership and operations of casino resorts. Its casino resorts offer gaming, hotel, convention, dining, entertainment, retail, and other resort amenities. The company provides online sports betting services to its customers through BetMGM.
On September 26, 2022, George Choi, an analyst at Citi, increased his target price on MGM Resorts International stock to $58.50. The analyst currently has a Buy rating on the company’s stock. The earlier-than-expected easing of Covid-related restrictions in Macau is a positive surprise, and the analyst now expects the stock to be re-rated by the market.
According to Insider’s Monkey database, 53 hedge funds held shares of the company at the end of the third quarter 2022.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and MGM Resorts International was one of them. Here is what the fund said:
MGM Resorts International is a leading global casino and entertainment company. At its recent price of only $30 per share, we believe MGM is valued at a significant discount to our reasonable $50 per share estimate of the sum-of-the-parts value of its business. Further, the company’s domestic operations are valued at a 18% free-cash-flow yield. Paul Salem, Chairman of the Board, recently acquired shares.
1. Caesars Entertainment, Inc. (NASDAQ:CZR)
Number of Hedge Fund Holders: 56
Caesars Entertainment, Inc. is one of the largest casino-based entertainment companies in the United States. Since starting its operations in 1973, it has grown through the development, expansion, and acquisition of resorts across the U.S. As of December 2021, the company owned, leased, and managed 52 domestic properties in 16 states.
On November 02, 2022, Daniel Politzer, an analyst at Wells Fargo, increased his price target on Caesars Entertainment, Inc. to $72 while keeping an Overweight rating on the company’s stock. The analyst believes that the higher-than-expected Q3 2022 results of the company reflect the strong nature of the operations of the company.
According to Insider’s Monkey database, 56 hedge funds had stakes in the company at the end of the September quarter.
In its Q4 2021 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Caesars Entertainment, Inc. was one of them. Here is what the fund said:
Caesars Entertainment, Inc., a diversified casino-entertainment and resort company, underperformed in the period as its quarterly earnings update was viewed as disappointing by investors. The firm highlighted a number of one-time headwinds that ultimately weighed on margins, as well as some negative impacts brought on by the surge in COVID cases. Despite this, we believe that the sizeable overall margin improvements Caesars has realized coming out of the pandemic will ultimately prove sustainable in the long run.
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