While the year 2020 has been extremely challenging for businesses across all kinds of sectors, one industry that has been thriving is online gambling.
With brick and mortar casinos having to close across America and around the world due to the coronavirus crisis, the door was opened for online sites to step in and fill the gap.
That resulted in online gambling shares across the board rising at a rapid rate. They have been some of the best stocks to own over the course of the year to date.
However, of late they have been slipping back. So what is the best plan for gambling stocks?
Vaccine news hurts gambling stock prices
The trigger for the second sell-off in gambling stocks appears to have been the emergence of positive news surrounding a vaccine for COVID-19.
People in the UK are already receiving the vaccine, which is also being rolled out in America this month, though president Donald Trump has rolled back on a plan for White House officials to be among the first people in the US to be vaccinated.
While most people would agree that vaccines being released is a good thing overall, online gambling companies are among the businesses that could be affected by the development.
Offline casinos having to close meant that there was a rush of demand to their online equivalents, but this trend may be set to reverse in the coming weeks and months.
According to the American Gaming Association’s COVID-19 tracker, more than 100 casinos in America are still shut as a result of the coronavirus crisis. Many others have imposed safety restrictions such as limited capacity in order to make it possible for them to reopen.
But now the vaccine is here, casinos might be able to get back to normal sooner rather than later, giving people a chance to experience blackjack and roulette games in person again.
Can gambling stocks bounce back?
After trials of multiple COVID-19 vaccines around the world were announced as successes, the stocks of various gambling share prices dipped as a result.
Flutter Entertainment and GVC Holdings were among the gambling stocks to see a significant drop on the back of the news. Flutter, the parent company of PokerStars, has since seen its share price rebound and Flutter stocks are up around 50 per cent over 2020 so far, making the company one of the biggest market movers of the year.
GVC, which owns gambling brands including Ladbrokes, also recovered quickly. Shares in the company dropped alarmingly in March but, since then, are up by about 300 per cent.
Gambling companies with poker brands will be keeping a close eye on the World Poker Tour, with in-person tournaments expected to resume in the coming months. Should this happen, it could mean online poker stocks are going to drop as a result of a lack of activity on those sites.
Gambling companies pivoting to online
It might be too late to make the most of the rise in online gambling that has been seen in 2020, but a lot of companies in the industry are placing an increasing focus on online sites.
For example MGM Resorts International, a casino giant that has traditionally steered clear of the internet. Recently, the company said it was starting an online casino in Pennsylvania, where players will be able to experience MGM games via either mobile app or desktop browser.
As confirmed by NoDepositKings, more gambling companies are likely to turn to online operations in the coming months. MGM’s share price rose rapidly on the back of the news it was moving into online casinos, with investors welcoming the development.
BetMGM’s chief executive Adam Greenblatt said: “With more than 140 different games, including our own in-house progressive jackpot network, we’re delivering the widest range of content currently available in the state.”
MGM has also signaled a move into sports betting in America after the company was confirmed as the first Gaming Partner of the Pittsburgh Steelers, who are riding high in the NFL this year.
More gambling companies are expected to follow the lead of MGM in 2021 and beyond, with investors watching closely to see if their stock prices rise or fall as a result.