Online gambling stocks are one of the hottest areas to watch in the stock market this year. Many experts believe that the industry will only get larger from now. Admittedly, some of the top online gambling stocks remain largely speculative. But the potential return of this online offering is likely to be a boon for gambling companies. Of course, there are two sides to the gambling industry right now. And one is recovering while another one is thriving.
When investors think of gambling companies today, they probably think of the impact of the pandemic on casinos. For instance, MGM Resorts International (MGM Stock Report) lost nearly 80% of its value this year during the stock market crash. And it’s only natural for investors to completely shy away from the battered industry. However, unlike other physical casino operators, MGM stock proves that it’s not a one-trick pony. MGM’s BetMGM online sports betting and gambling app has been experiencing massive growth throughout the pandemic. And that might just have revealed to us the category of up-and-coming stocks to invest in, namely the online gambling stocks.Is There Big Potential In Online Gambling Stocks?
It’s difficult to know how big the industry will eventually become. We could only depend on a few research reports carried out by various organizations to have a better clue on where the industry is heading. Independent research firm Gambling Compliance says the U.S. betting market will range between $5.9 billion and $8.2 billion by 2024. Morgan Stanley (MS Stock Report) believes the U.S. sports betting market could hit $10 billion annually by 2025. Globally, it sees sports betting topping $100 billion. BofA Securities sees the U.S. market hitting $24 billion by 2030.
If you are looking to keep track of this arena, a way of going about it might be to look at an ETF. For instance, the Roundhill Sports Betting & iGaming ETF (BETZ Stock Report) has jumped more than 30% since its inception in June this year. The return of live sports has made online sports gambling see big numbers in recent times. So let’s take a look at three gambling stocks to watch.Trending Online Gambling Stocks In The Stock Market Today
- DraftKings (DKNG Stock Report)
- PennNational Gaming (PENN Stock Report)
- GameAccount Network (GAN Stock Report)
DraftKings has been a major outperformer in the stock market this year. The company went public through a special acquisition company (SPAC) in April this year. Since then, DKNG stock has at least tripled in value. However, recent events have put a halt to DKNG stock’s spectacular debut. The recent stock dilution, a surging number of coronavirus infections in the NFL, and this week’s lockup expiration have all played their part in the stock’s slide. Now that the stock has had a major correction, would it be a good time to buy? The company announced last week that it had inked a new deal with Warner Media’s Turner Sports. That could certainly be a boost to its prospects. From this partnership, DKNG will obtain exclusive rights to provide fantasy sports content and sports betting on select television broadcasts of Turner Sports and Bleacher Report.
No doubt, this partnership is a huge deal and we are seeing a recovery in DKNG stock this week. An analyst from Rosenblatt rated the stock a “Buy” with a $65 price target. That implies a 51% potential upside from its closing on Thursday. With increasingly fierce competition from both small and large casino players, it may be tough for DraftKings to live up to expectations. With a limited football schedule next year, there are fewer games for the public to bet on. Whether the DKNG stock will have another push will likely be dependent on the return of the NBA and how much Turner Sports will be able to bring to the table.
With the speedy recovery in the stock market since the March lows, it is not surprising that many have chosen to invest their stimulus checks instead of spending them. Granted, “invest” might be too liberal a word as many of them were looking for quick flips. If there are more stimulus checks, it is not just the stock market that would benefit. Sports betting could benefit too, with football now in full swing and the NBA and MLB coming back up. After all, if there is a stock for bettors to bet on betting, it has got to be DKNG stock, don’t you think?
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Penn National Gaming had a good rally in September, rising more than 25% in the month alone. Since the beginning of this month, however, the stock has taken a bit of a breather. PENN stock has been the favorite among investors because of its Barstool Sports wagering platform. Granted, DraftKings does have the first-mover advantage on its side. Yet, what this company lacks is its own Dave Portnoy. The Barstool impresario has become more famous thanks to his foray into day trading. And that has helped drive more attention to Barstool. But here’s a question, with the recent weaknesses in PENN stock, should investors buy on the dip? If you believe in the potential of the sports betting industry and the moat that the company has, just go ahead with what’s in your mind.
Penn National “has the potential to gain significant share in online betting, driven by their partnership with Barstool providing a differentiated customer acquisition strategy,” McTernan noted, adding that “while we continue to expect DraftKings and FanDuel to be leaders in the online betting space given their first-mover advantages … Penn could already have their ear, an envious position.”
The company owns and manages traditional gaming, racing properties, and operates video gaming terminals with an emphasis on slot machines. As we are a few weeks into the NFL, many investors are anticipating that PENN stock could benefit immensely from its stake in Barstool Sports. Barstool is big with younger millennial bettors. With the recently launched mobile betting app from Barstool, the investment could pay off in more ways as the NFL season progresses.Online Gambling Stocks To Watch #3: GameAccount Network
GameAccount Network offers technology solutions and a white-label platform for online casino and sports betting applications. GameAccount Network’s software-as-a-service (SaaS) is used by major casino operators. It helps to capture strong growth driven by a trend of legalization along with the rise of mobile gaming applications. This week, the company announces the launch of the Play Agua social casino site and app for the Agua Caliente Casinos.
“We are excited that our unique Simulated Gaming software has been proven to seamlessly integrate with our customer’s exciting loyalty programs, while also expanding their access point to consumers. Our new partnership with Agua Caliente Casinos will help them provide an enhanced social casino gaming experience and gain awareness and exposure to new states.”– Jeff Berman, Chief Commercial Officer of GAN
The company allows physical casino operators to easily take their gambling business online, without having to develop everything from the ground up. The customers include large regional operators and individual tribal casino operators. The beauty of GAN is that you don’t have to bet on the success of anyone’s operator in particular. Rather, you are betting on online casinos as a whole.
GAN is slated to report its third-quarter earnings on November 19. In the second-quarter report, the company saw that revenue increasing by 99% year over year. In addition, there was a 110% increase in real money internet gambling revenue to $5.7 million. If you are hopeful that online casinos will proliferate, GAN stock would be one of the best online casino stocks to watch. This comes as more operators intend to shift or expand their operations online. And GAN stock could be one of the best ways to gain exposure to this market through a pure-play technology provider.