Last year, the U.S. Supreme Court allowed regulation to be taken charge by States instead of the Federal Government. The illegal market in the U.S. alone is estimated at $150 billion waged every year. Legal sports gambling is growing everyday. The industry has a 20% growth projection for the next 5 years.
Across the pond, gamblers have been participating in sports betting. In the U.K.,Europe’s largest sports betting market, has liberalized online gambling regulations.
The most obvious players in the industry to take advantage of this are casinos who are well established. Furthermore, the majority of wagers are expected to take place via apps in the near future.
Here are the best stocks to take advantage of this new opportunity in legalized sports betting.
🃏 Casinos & Gaming
Great Canadian Gaming Corp (GC-T)
A Canadian casino operator that has recently won many contracts in Ontario. Due to restrictions and regulations, they have little competition and basically has a monopoly on gaming in Toronto. They are sure to take advantage of sports gambling.
They are growing into Ontario. Their recent earnings really caught on with an impressive number. It was not even a full quarter of results from the recent acquisition. They have 20 year contracts. 16 times earnings. (Analysts’ target: $51.80).
Pollard Banknote Ltd (PBL-T)
They are best known for instant win lottery tickets. They have a great social media presence, pay a good dividend and has been a solid gaming company.
(A Top Pick Jan 28/16. Up 9%.) Thinks the stock should be a lot higher. They are one of the dominant global players in printing scratch lottery tickets. The industry has grown at about 6%-7% a year over 30 years. Trading at a pretty reasonable valuation.
The Stars Group Inc (TSGI-T)
A market leader in poker but are moving into sports gambling now. They made a deal with NBA to be their gambling provider. They’ve expanded into the UK and Australia and they still have some space to grow.
(A Top Pick Nov 15/18, Down 3%) Loves it. A fine 5-year hold or even 2-3-year timeline. The industry boasts 20% growth for the next 5 years.
MGM Mirage (MGM-N)
The largest casino operator in the U.S. It has invested in sports betting and are building a sports betting empire. They recently made a deal with Major League Baseball as their official gaming partner.
If you want to be in this space, he would be more for a Macau play directly. They are actually larger than Las Vegas now and growing faster. Las Vegas Sands (LVS-N) is a bigger player there. Gambling stocks are too unpredictable for him.
Churchill Downs Inc (CHDN-O)
They traditionally are a horse betting company, but the legalization of sports betting represents a big opportunity for them. They’ve already entered the market in Mississippi. For the last 5 years, the stock has trended up and has performed well.
A year ago, we could have made some money. He cannot understand why the stock is making new highs. The horse racing sport is out of favor. The stock needs to pause.
Penn National Gaming Inc (PENN-Q)
A large casino company that is betting big on sports betting, with a $3.1 million investment to launch sports betting at their Mississippi and Hollywood casinos.
Likes gaming stocks. If you're trading, cash out now. Jumped from $16 to today's level quickly. Reward yourself. Long term looks good.
Boyd Gaming Corp. (BYD-N)
They announced a partnership with MGM last year to focus on the future of online gambling and sports betting. They will be providing a platform for sports betting, casino gaming and poker.
Top Short It is trading down and has been trading down for a long time. Looks like it is forming a bottom, but the trend is still down. There is not a lot of volume with this. You want to be out at $22.50.
International Game Technology (IGT-N)
They’ve teamed up with fantasy sports provider FanDuel to enter the New Jersey sports betting market. They are traditionally a slot machine business but they are moving heavily into sports betting.
Scientific Games Corp (SGMS-Q)
Their SG Sports platform is an online sports betting platform for soccer, tennis, basketball, etc.
They also partnered with Caesars to launch sports betting at their Casino and racetrack.
Involved in the lottery industry. Business model of this company is phenomenal. Great returns on capital. Very little capital expenditure. Contracts tend to be long-term. Expects to see 20% plus earnings growth next year.
Wynn Resorts Ltd. (WYNN-Q)
Wynn is working on launching a mobile sports betting app, joining the Nevada mobile sports betting applications. They are planning on offering a wide range of functionality and bets on horse races too.
(A Top Pick Dec 22/15. Up 14.83%.) He picks fixer-uppers because usually the volatility of a market won’t scare him on names that have already been battered. Thinks this has found a support level now. He still likes this.
Las Vegas Sands Corp. (LVS-N)
An IT solutions provider that is launching an all-in-one sports book solutions for SMEs to offer bets. Their ‘sports betting in a box’ includes solutions for hardware, middleware and software, and can even process live betting.
Up 50% in the last year, in large part due to their new casinos in Macau, a massive growth area. Selling at a hefty valuation. They are lobbying against online gaming in the US. Not a cheap stock.
William Hill (WMH-LSE)
The world’s top betting sites who has 25% of the sports betting market in the UK and Ireland. They are looking to venture into the U.S. as well, following the Supreme Court decision. They have a well-established app and has a loyal gambling clientele.
(London Stock Exchange)Largest bookie in England since 1934. Great cash flow generator. Rising dividend. Trades at about 4 x cash flow.
Happy trading !