Which Online Gambling Stocks Are Investors Watching Today?
Online gambling stocks remain some of the most popular investment themes in 2021. While the coronavirus pandemic has created a spike in new demand for online gambling, each individual company has something different to offer. We all know that some of the top gambling stocks such as Las Vegas Sands (NYSE: LVS) have taken a big hit in the stock market and have yet to recover to their pre-pandemic levels. However, companies with a presence in online gambling have taken the traditional gambling world by storm over the past year.
Truth be told, the online gambling market is huge, and is currently growing at a staggering rate. For instance, in 2018, the first full year of legal sports betting in the U.S. saw $13 billion wagered, according to the American Gaming Association (AGA). The number we saw in 2019 was double that of 2018’s. Not to forget the economic shutdowns have affected many states’ finances. To help ease the pressure, some lawmakers have been pushing for online gambling legalization.
With legalization across the country, you only have to guess how big the market could be. 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 (NYSE: MS) believes the U.S. sports betting market could hit $10 billion annually by 2025. Globally, it sees sports betting topping $100 billion. Of course, the potential is just that. Investors looking for the next megatrend also need to understand that there are no guarantees to success. If you would like to bet on this burgeoning industry, do you have some exposure to these top online gambling stocks in the stock market today?
Top Online Gambling Stocks To Watch Now:
- Esports Technologies (NASDAQ: EBET)
- DraftKings Inc. (NASDAQ: DKNG)
- Penn National Gaming (NASDAQ: PENN)
- GAN Limited (NASDAQ: GAN)
Investors bullish on online gambling stocks may have come across Esports Technologies. For starters, Esports Technologies is a Las Vegas-based company that specializes in online gambling for esports and competitive gaming. The company is well-known for facilitating betting on esports like League of Legends.
The company’s debut may be small compared to the Coinbase IPO this week, but its jaw-dropping gains on Thursday certainly caught many investors’ attention. Even though EBET stock was priced at $6 per share, the stock immediately took off. It opened at $21 and skyrocketed to over $36 at closing Thursday. That led EBET stock, early investors, to score a gain of more than 500%.
The reason for such a rally is simple. Many see eSports betting as a massive opportunity. The industry accounts for an estimated $1.8 billion of the $443 billion global gambling industry. From its pre-market trading today, it seems like the rally is far from over as it is currently 48% higher as of 6:54 a.m. ET. The FOMO moment with this esports stock is definitely real. But investors should also tread carefully with stocks with such meteoric rise in such a short period of time. That is because they can often pull back as quickly. If you ask me, I would stay out of EBET stock for now until the dust settles.
DraftKings is another trending name in the stock market today. Its stock has had a wonderful start to the year as the online gaming market continues to stay at the forefront of the pandemic. The sports wagering company rallies in the after-hours Thursday after inking a deal to be the official sports betting partner of the National Football League (NFL).
While the new deal is certainly the key catalyst for the rally, it is certainly not the only reason why this growth stock held steady when the market exhibited weaknesses. Of course, there were the analyst upgrades and strong quarterly reports.
More importantly, there’s huge potential in the New York gaming market after the state-approved an online sports betting model. This bodes well for DKNG stock when it gets the license. There are good reasons to believe that DKNG stock has more room to grow in the long run. If you are bullish on the online gaming niche, then DKNG stock is your possible bet among the hyper-growth companies.
Penn National Gaming
Similar to DraftKings, Penn National Gaming had a good rally since the start of the year, rising nearly 25% year-to-date. The company operates 41 facilities across 19 U.S. states, boasting the nation’s largest and most diversified regional gaming footprint. PENN stock has been a favorite among investors because of its expansion in online gaming offerings. These new initiatives will come in handy for players to place their bets if they have decided to do it remotely.
Of course, for the company to recover strongly, people will have to go back to its casinos. With more people getting vaccinated in the U.S., many are slowly feeling safe about visiting brick-and-mortar casinos. This would bode well for PENN stock as it’s not a pure-play online gambling stock like DKNG stock.
Over the long term, Penn National plans to drive growth through a pivot to sports betting. So far the company has performed well in early markets like Pennsylvania, where its market share has grown from 7.2% in September to 13.4% in December. On top of that, Penn is also in a 20-year strategic partnership with Rivers Casino in New York. Through this partnership, the company seems to have its eyes on the potentially massive New York sports betting market. With all these in mind, would you add PENN stock to your watchlist?
The big betting sites aren’t the only ones benefiting from online gambling. GAN Limited, also known as GameAccount Network, offers technology solutions and a white-label platform for online casino and sports betting applications. GAN’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.
While the potential for the company to scale is certainly there, financial results for the fourth quarter of 2020 were a little disappointing. In detail, revenue for the quarter came in 16.8% lower to $8.9 million. As a result, GAN stock has been severely under pressure since then. Revenue for the year was $35.2 million. But impressively, the management expects 2021 revenue to be between $100 million and $105 million.
This strong guidance came after partnerships with Wynn Resorts (NASDAQ: WYNN), Churchill Downs (NASDAQ: CHDN), Penn National, and others began to bear fruit. You could say that GAN is a pick-and-shovel play for the online gambling industry. With GAN, you may not have to pick winners from losers. As long as the list of customers continues to grow, GAN stock could be a great growth stock in the online gambling space.