With pro and college football teams in full training-camp mode and games only a month away, sports gambling companies may believe Christmas has come early. Certainly, the sector is on fire, with the total amount of cash bet on U.S. sporting events via retail sportsbooks, online sportsbooks and lottery parlay cards expected to rise by 45% in 2023, to nearly $137 billion, according to research firm Insider Intelligence.
That means bets will crest $100 billion for the first time. “Double-digit growth will continue, and in just two years, the total handle will exceed $200 billion,” Insider Intelligence reports. “For context, just five years ago the total sports betting handle was only $4.62 billion.”
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With more states greenlighting sports gambling and bettors lining up at casinos and logging into digital betting platforms, what are the best sports gambling companies for investors to buy now? It’s important to do your own research on these highfliers, but seven sports gambling stocks stand out as being a good bet:
| Sports betting stock | YTD return as of Aug. 1 |
| Penn Entertainment Inc. (ticker: PENN) | -12.1% |
| DraftKings Inc. (DKNG) | 177.0% |
| Flutter Entertainment PLC (PDYPY) | 42.4% |
| Churchill Downs Inc. (CHDN) | 11.6% |
| Caesars Entertainment Inc. (CZR) | 38.9% |
| MGM Resorts International (MGM) | 49.2% |
| Boyd Gaming Corp. (BYD) | 25.3% |
Penn Entertainment Inc. (PENN)
Penn Entertainment is up 8.6% over the past month as of Aug. 1, compared to 2.8% for the S&P 500. The company may be more widely known as the owner of Barstool Sports, but Penn also owns 44 casino and racetrack properties across the U.S., along with multiple digital gambling platforms.
It’s taken some time for PENN stock to pick up steam this year, but with the gaming industry rocking a record year for revenue, Penn is gaining more visibility among investors and Wall Street analysts. On July 28, Truist Financial analyst Barry Jonas maintained a “buy” rating on Penn, and the stock also got a “buy” rating from Barclays late last month. That’s not surprising given the company’s last quarterly earnings forecast, with earnings per share and revenues expected to see healthy increases.
DraftKings Inc. (DKNG)
DraftKings is on a heater of its own in 2023, as it’s up 177% over the first seven months of this year. Compare that to 2022, when DraftKings’ shares were down about 50% by Aug. 1. The Boston-based company is in acceleration mode, thanks primarily to its monthly unique player base, which has risen from 1.5 million in the first quarter of 2022 to 2.8 million in Q1 2023. New users in the first quarter increased 57% year over year.
Average monthly revenue per individual is up too, growing from $67 to $92 per customer from the first quarter of 2022 to Q1 2023. Simultaneously, DraftKings is paying less to attract visitors to its gaming platform, with total advertising spending down 27% year over year.
When you’re paying less to attract customers who are paying more cash to place bets on your platform, you’re on the right track — at least DraftKings’ shareholders seem to think so.
[READ 5 of the Best Stocks to Buy Now]
Flutter Entertainment PLC (PDYPY)
Investors can also look overseas to find a winning wager on the sports betting stock market. Exhibit A is Dublin, Ireland-based Flutter, which owns major brand-name gambling sites such as FanDuel, PaddyPower and PokerStars. Flutter is out of the gate like a Churchill Downs thoroughbred in 2023, with its stock price up 42.4% as of Aug. 1, and up 92% over the past 12 months. Analysts expect big things for Flutter going forward, pegging per-share earnings at $2.57 for 2023 — a 129.5% rise on a year-to-year basis.
Investors may also get a new opportunity to expand their bets on Flutter. In May, the company received shareholder approval for a secondary listing, which could lead to the gambling giant being listed on the New York Stock Exchange or the Nasdaq. It’s currently traded on an over-the-counter, or OTC, basis in the U.S.
Churchill Downs Inc. (CHDN)
Churchill Downs is on firm footing in the second half of 2023, with second-quarter earnings revealing a trifecta of achievements. First, CHDN generated revenue of $768.5 million, up 31.9% over the second quarter of 2022. Earnings per share clocked in at $2.24, up from $1.95 in the same period. Meanwhile, net revenues in racing were up to $385 million for the quarter, ahead of consensus analyst estimates of $380 million.
The stock was buoyed by a June “buy” recommendation from Jefferies analyst David Katz, who set a price target of $165, well ahead of CHDN’s Aug. 1 closing price of $118 per share. In the same month, JMP Securities’ Jordan Bender maintained his “buy” call on CHDN shares, with a target price of $155 per share. Overall, Churchill Downs is living up to its reputation as an earnings generator, and its share price is tracking up accordingly, rising 11.6% so far in 2023.
Caesars Entertainment Inc. (CZR)
This Las Vegas-based casino is living up to its marquee name in 2023, thanks primarily to a post-pandemic bounce in casino activity and high demand for its online sports gambling platform. Second-quarter profits were a sure sign of that success, with a net income of $920 million compared to a loss of $123 million in the same quarter of 2022. Income is up thanks to a $940 million tax deferral allowance related to the company’s real estate investment trust properties, rising hotel occupancies for its casinos and a significant rise in online gambling activity.
Caesars is not letting up, as the company has topped consensus earnings per share for four quarters in a row. Year to date the stock is up 38.9%, and Barclays just reaffirmed its “buy” rating on CZR, calling for a price target of $74. CZR stock closed at $57 per share on Aug. 1.
MGM Resorts International (MGM)
Another titan of the Vegas strip, MGM is also benefiting from a post-pandemic travel boom, with heavy traffic in both its Las Vegas and Macao casinos in the second quarter of 2023. Analyst expectations are high for MGM, with a consensus earnings call for more than 50 cents per share in the second quarter. That would be up a whopping 1,586% compared to the second quarter of 2022.
The company’s BetMGM sports betting division accounts for 30% of the total U.S. digital casino and online poker market, and a 13% share of the U.S. sports betting market, which translates to a constant flow of online betting cash.
That flow should expand with the National Football League season about to get underway, boding well for the third quarter of 2023. The stock is up a booming 49.2% in 2023 as of Aug. 1. Fresh “buy” ratings are also in on MGM, from Truist on July 28 and from JMP Securities on July 26.
Boyd Gaming Corp. (BYD)
Second-quarter revenues are in for Boyd Gaming, which operates 28 gaming properties in 10 U.S. states and has a profitable sports betting and online gambling partnership with FanDuel. Revenues stood at a robust $917 million for the quarter, compared with consensus analyst expectations of $891 million. At $1.58 per share, earnings outperformed the prior-year quarter’s $1.48 and beat analyst estimates.
Operating through three segments — Las Vegas Locals, Downtown Las Vegas, and Midwest and South — BYD has outperformed on revenues and earnings per share in each of the last four quarters, suggesting the stock’s good performance has staying power. Analysts at Truist and Deutsche Bank appear to agree, as both have issued a “buy” rating on BYD stock in the past week, with the latter setting a price target of $80 per share. BYD closed at $67.97 per share on Aug. 1. The stock has already gained more than 25% in 2023.
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7 Best Sports Betting Stocks to Buy originally appeared on usnews.com
Update 08/02/23: This story was previously published at an earlier date and has been updated with new information.
