We recently compiled a list of the 10 Best Casino Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Churchill Downs Incorporated (NASDAQ:CHDN) stands against the other best casino stocks.

The casino industry has rebounded strongly from the COVID-19 pandemic, due to pent-up demand from gamblers and visitors returning to popular places such as Las Vegas. Brick-and-mortar casinos make a substantial profit from hotel operations, conventions, and other events in addition to the revenues that they make from slot machines and table games. Casino stocks are categorized as consumer discretionary since tourism and gambling spending are strongly correlated with the overall economic condition. According to Market Research Future, the global casino market is projected to grow from $309.54 billion in 2024 to $511.6 billion by 2032, with a compound annual growth rate (CAGR) of 6.48% over the forecast period (2024-2032). Furthermore, in 2023, the casino market was estimated to be worth $290.7 billion.

Regionally, the Asia Pacific Casino market dominates the industry due to the growing availability of online casinos and the average individual’s income. The North American casino market has the second-largest market share due to the legalization of sports betting and the approval of online gambling in the region. Furthermore, the UK casino market grew at the quickest rate in the European region, while the German casino industry held the largest market share.

Macquarie analyst Chad Beynon recently highlighted the significant market reaction to casino industry earnings even though the results were essentially in line with forecasts. After five years of underperformance, the industry saw double-digit stock increases due to improving sentiment, potential interest rate drops, and solid early-year trends. Although Macau’s recovery is still below pre-pandemic levels, gaming revenue is projected to rise by 8% in 2025, outperforming the U.S. market’s flat-to-2% growth. Chinese New Year activity was consistent rather than volatile, showing a healthy demand trend. By bypassing the costs of licensing and regulations, new event-based contracts may pose a threat to established operators. However, Beynon believes that licensed operators will fight back, as they did against sweepstakes and illegal betting. Investor confidence was strengthened by generally favorable remarks regarding recent trends, even if some companies decided not to provide updates during the quarter. The industry is now seen more favorably by analysts after years of weak performance.

Apart from analysts, there are also billionaire investors who remain bullish on the casino stocks. Ken Fisher’s Fisher Asset Management, with a portfolio worth more than $252 billion, has invested in two renowned casino stocks. In Q4 of 2024, Fisher invested more than $201 million and owned more than 2.3 million shares in a high-end casino and hotel operator in the United States. Fisher’s confidence in the market’s long-term potential is proven by the fact that the stock makes up 0.07% of his portfolio. In the same quarter, Fisher also made an investment of more than $153 million in an American multinational hospitality, sports, and entertainment company.

Meanwhile, in Q4 of 2024, Billionaire Carl Icahn’s Icahn Capital LP, which has a $7.4 billion portfolio, showed its trust in the industry by investing over $82 million in the largest casino-entertainment firm in the United States.

Our Methodology

For this article, we scanned Insider Monkey’s Q4 2024 proprietary database of billionaires’ stock holdings and identified casino stocks from the list. These companies are involved in operating casinos, online gaming platforms, sports betting, and resort entertainment. From there, we picked the top 10 stocks with the highest number of billionaires having a stake in them. Where two or more stocks were tied on billionaire sentiment, we used the dollar value of billionaire holdings as a tiebreaker between them.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Churchill Downs Incorporated (NASDAQ:CHDN)

Number of Billionaires: 10

Billionaire Holdings: 400,382,037

Churchill Downs Incorporated (NASDAQ:CHDN) is a firm that offers online betting, racing, and gaming entertainment. It is divided into three business segments: Gaming, Wagering Services, and Live and Historical Racing. Live and historical pari-mutuel racing is included in the Live and Historical Racing category. The Wagering Services section includes revenue and expenses from pari-mutuel wagers made through TwinSpires, the company’s retail and online sports betting operation, while the Gaming segment includes revenues and expenses for casino locations and affiliated racetracks that support the casino license. Slot machines, video lottery terminals, video poker, HRMs, ancillary food and beverage services, hotel services, pari-mutuel wagering commissions, and racing events all contribute to the Gaming segment’s revenue and expenses.

Revenue grew $27.3 million in the fourth quarter of 2024, an 11.07% YoY growth, driven by a $30.3 million raise from the opening of the Terre Haute Casino Resort, which was partially offset by a $3.0 million decline from the other wholly owned gaming locations, owing to regional gaming softness and greater competition.

In 2024, Churchill Downs Incorporated (NASDAQ:CHDN)’s net sales rose by 11% and its adjusted EBITDA grew by 13%, setting a new financial record. This achievement was mainly due to the Kentucky Derby, which saw record-adjusted EBITDA as a result of higher ticket sales, sponsorships, and pari-mutuel betting. The goal of Churchill Downs Racetrack’s expansion projects is to improve the Derby experience even more. These projects include the Conservatory and the Sky Terrace renovation. The company’s almost $1.2 billion adjusted EBITDA was derived from HRM venues in Virginia, with plans to expand in Richmond and Henrico County.

Churchill Downs Incorporated (NASDAQ:CHDN)’s solid financial position was reinforced by $688 million in free cash flow ($9.22 per share), which represented a roughly 33% increase per share over the prior year, making it one of the Best Casino Stocks.

Overall, CHDN ranks 7th on our list of the Best Casino Stocks to Buy According to Billionaires. While we acknowledge the potential for CHDN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CHDN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stock To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.