PENN Entertainment (PENN) Falls Hard on Prediction Market Threats

We recently published 10 Stocks Taking a Nosedive. PENN Entertainment Inc. (NASDAQ:PENN) is one of the worst performers on Wednesday.

PENN Entertainment dropped for a 4th consecutive day on Wednesday, slashing 5.74 percent to close at $16.90 apiece as investors sold off positions in gaming stocks amid threats posed by the surging prediction markets.

PENN Entertainment Inc. (NASDAQ:PENN) dropped alongside its counterparts, including Caesars Entertainment Inc. (NASDAQ:CZR), with the overall sector facing pressure from the prediction markets recording billions worth of contracts.

Just recently, Robinhood Markets and Kalshi announced a jump in their trading volumes in the third quarter alone, with the former booking 2 billion prediction contracts, while Kalshi saw a 90-percent jump in sports betting on its platform. The latter also gained an edge for its capability to operate in jurisdictions and age brackets currently off-limits to most gaming firms. The rapid increase sparked sell-offs in PENN Entertainment Inc. (NASDAQ:PENN), which similarly offers sports betting services.

PENN Entertainment (PENN) Falls Hard on Prediction Market Threats

In an interview with Bloomberg, an analyst from investment firm Citizens said that gaming companies “need to come out with a strategy for investors — whether it’s launching prediction markets or stepping up marketing.”

“Until that happens, the prediction markets present a risk,” the analyst added.

While we acknowledge the risk and potential of PENN 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 PENN and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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