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In gambling, there’s only one thing not left to chance; In the end, the house always wins.
It’s common knowledge that casino gamblers are participating in a game where the odds are rigged against them, yet millions of people lose money gambling in the casino every year.
I don’t need to be a rocket scientist to come to the conclusion that most people participate in gambling to make money. I HATE GAMBLING, However, if I’m going to participate, I’ll always bet in favor of the house.
“Don’t bet against the Casino, Own the Casino”
According to a report by Researchandmarkets, one of the world’s largest research stores, “The global gambling market is expected to grow from $465.76 billion in 2020 to $674.7 billion in 2025 at a CAGR of 7%”.
The gambling market is huge and old, and investing in it equates to investing in a market worth over half a trillion dollars that have been in existence for centuries.
Checkout: 10 Best Gaming Stocks for 2023
There is an ongoing revolution in the gambling industry, one that has been decades in making, and it’s ONLINE GAMBLING. It should come as no surprise that the internet is revolutionizing yet another industry.
Online gambling is relatively new, huge, and fast-growing, and that is the ‘gambling house’ that growth investors like you should be investing in.
“The global online gambling market is expected to grow from $64.13 billion in 2020 to $112.09 billion in 2025 at a CAGR of 12%” according to a report by Researchandmarkets. In the next 3-5 years, this fast-growing market (virtual poker, online casino, and online sports betting) is expected to be almost 2x in size.
In the online gambling world, Sports betting and fantasy sports betting stocks show the most promise in terms of growth. Since 2008 when the Montana Lottery began offering fantasy sports wagering for the first time, there has been a boom in the fantasy sport betting market, one that has continued to date.
Also Checkout: 8 Hot Virtual/Augmented Reality Stocks 2023
It goes without saying, there is a lot of long-term potentials in the online gambling space, be it sports betting, fantasy sports betting, online casinos, or online poker.
If you’re interested in investing in Online Gambling Stocks, here are 4 promising stocks to consider:
1. DraftKings (NASDAQ: DKNG)
DraftKings is a sport betting operator and one of the largest operators of daily fantasy sport contest in the United States and Internationally. The company also runs a casino gaming platform software for online and retail sportsbook.
As more and more states legalizes sport-betting, DraftKings increasingly launches the DrakfKings Sportsbook , as a matter of fact, no other sportsbook can match DraftKings in terms of availability.
DraftKings Sportsbook is currently available in 14 states (New Jersey, West Virginia, Indiana, Pennsylvania, New Hampshire, Iowa, Colorado, Illinois, Tennessee, Michigan, Virginia, Wyoming, Arizona, and Connecticut).
The company has managed to grow its monthly unique paying users to 1.1 million, representing an almost 4x growth from 2020 numbers.
Draftkings is making headway with its impressive revenue and monthly active users growth year over year. The company is striking the right deals and partnerships, making the right acquisitions with growth in mind.
The company also runs one of the largest online casino platform in the United States, which it operates in New Jersey, Pennsylvania, and West Virginia.
As a growth stock that went public in 2020 through a SPAC this stock is a darling but for its ridiculously high sales and marketing expenses.
The major problem with this stock is that it’s going to take 2 – 3 years before investors can expect it to be profitable. In the first 3 quarters of 2021, the company lost $1.197 billion USD even though in the same time frame it generated $822.7 million USD in revenue.
In the US online gambling market, Draftkings is a major player; one that is focused on expanding its reach and growing as fast as possible in a market that is relatively new and fast-rising.
The company is aiming to dominate the big players of the US gambling market today and is not shying away from spending big if that is what it takes.
With the strategic growth metrics, this stock is hitting, within the next five years, the company could be on a path to becoming the Amazon of the online sports and fantasy sports betting market.
2. Flutter Entertainment Inc.
Flutter Entertainment is one of the leading sports betting and gaming company in the United Kingdom, the United States, and internationally.
The company operates numerous online sports betting and gambling platforms through various leading brands including Sky Betting & Gaming, PokerStars, and Fanduel Group.
It’s arguably the largest online gambling company in the world, the company owns PokerStars (biggest online poker room), FanDuel Group (arguably the largest fantasy sports betting platform), and Sky Betting & Gaming (which owns Sky Bet, Sky Vegas, Oddscheker, Sky Bingo, and Sky Casino).
When I look at Flutter Entertainment, I see a company that has its feet firmly on the ground in almost every inch of the fast-growing online gambling market. They’re continuously expanding their reach into new and existing space in the online gambling market through strategic mergers and acquisitions.
The company is raking in billions of pounds in revenue, in 2020, it granted 4.398 billion GBP in revenue, and in 2021, its revenue grew impressively YoY.
It reported 1.44 billion GBP for the 3rd quarter of 2021 which represents a 12% revenue growth YoY. Notably, its US business holds the most promise as it reported an 85% revenue growth YoY in Q3 2021.
If you are serious about investing in the online gambling market, Flutter Entertainment is not a stock you should overlook. They’ve got it all.
3. Rush Street Interactive
Rush Street Interactive (NYSE: RSI) is a niche play for the online casino market, the company operates one of the largest online casino and sports betting platforms in the United States and in Latin America.
The company is also a provider of an omnichannel platform for the Land-based Sportbooks at Rivers Casino Philadelphia, Rivers Casino Pittsburgh, Rivers Casino Schenectady, Rivers Casino Des Plaines, and French Lick Casino.
In the United States, the company is operational in 12 States which are New Jersey, Pennsylvania, New York, Indiana, Illinois, Colorado, Michigan, Iowa, Virginia, West Virginia, Colombia, and Connecticut.
RSI has been beating analyst revenue and earnings expectations back-to-back-to-back since it went public in 2020 and is on a clear and fast track to profitability.
The company operates its real-money gaming business through BetRivers.com, PlaySugarHouse.com, and RushBet.co brands; and has established itself as a market leader in a lucrative niche in the online gaming industry.
In 2020, the company raked in $278.5 million in revenues and issued a 2021 revenue guidance of $420 and $460 million, which was raised to $465 and $495 million in Q2 2021 and further raised it to $480 and $500 million in Q3 2021.
The mid-point of its 2021 guidance, $490 million, represents a 76% YoY growth when compared to its 2020 revenues of $278.5 million. RSI represents is a fast-growing company in a growing and lucrative market.
Unlike sports betting, in the casino business the house, in this case, Rush Street Interactive, has great control over the odds and possible outcome, which is well rigged in their favor. In essence, they are more guaranteed to make a profit.
As long as RSI continues its impressive growth, it’s a really good online gambling growth stock to invest in for the long run.
4. Penn National Gaming
Penn National Gaming is the largest regional gaming operator in North America, the company owns and manages gaming (retail and online) and racing properties, and operates video gaming terminals.
PENN is an OG in the US gambling industry, your traditional gambling company with over 44 gaming destinations in the United States, featuring approximately 50,000 gaming machines, 1,300 table games, and 8,800 hotel rooms.
I believe you got the memo, PENN is not your typical online gambling stock, it is a whole lot brick and mortar. But why is it on this list you may wonder, and my response would be to think GM and Ford.
GM and Ford are traditional automakers like PENN is in the gambling industry, as the rise in EV companies like Tesla threatens their existence, these companies are forced to reinvent themselves in order to stay relevant and sustain growth.
Last year, 2021, Ford launched the Ford F150 Electric, an electric truck, that was widely received as being up there with today’s best EV trucks. And in 2021, Ford’s stock grew 143.78% while EV star, Tesla’s stock, grew 44.81%.
Traditional companies that are able to reinvent themselves and take advantage of their existing market position to capture significant shares in emerging markets can be a lucrative investment. And that’s why PENN should be on your top list of online gambling stocks in 2022.
In comes Penn Interactive (PI), the digital arm of Penn National Gaming, a leading operator of sports betting and online casino platform in the United States.
The company has a 36% equity share of Barstool Sports, a leading digital media company that focuses on sports and pop culture. Penn Interactive tapped into Barstool media reach in the successful launch of Barstool Sportsbook.
Barstool Sportsbook is a fast-rising online sports betting platform that is in Pennsylvania, Michigan, Illinois, Indiana, Colorado, Virginia, New Jersey, Tennessee, Iowa, West Virginia, and Arizona.
In August 2021, PI acquired theScore, the third-most-popular sports media platform in North America and the No. 1 in Canada. The digital media company is based in Toronto and focuses on delivering sports news, scores, and data. theScore also offers a popular sportsbook known as theScore Bet Sportsbook.
Penn National Gaming also operates an online social casino, bingo, and online casinos in the United States. Through strategic acquisitions and partnerships, Penn National Gaming has risen to become a major player in the online gambling market.
Henry John is a Stock Portfolio Manager that focuses on companies developing cutting-edge technologies.
Keeping track of cutting-edge techs, companies and stocks is what I do almost everyday. And I love it. Whether it’s artificial intelligence, 5g, or autonomous vehicles; I’m all in.
I’m a self-made millionaire who made most of his money investing in technology companies while working in finance.
Yes! I owe it all to tech and finance.