The first of our online gambling companies to consider is DraftKings. For today’s investors in a burgeoning online sports market, there may be no better positioned property than DKNG stock. It is predicted that by the year 2022, all around the world, sports fans will be having as much as $1 trillion invested in online betting per year. Five gambling stocks with great potential in 2020. Given below are five gambling stocks that one should keep an eye on in regard to gambling in legalized sports. MGM Resorts (NYSE:MGM).
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The casino gaming industry is constantly in a state of influx because of untapped markets and rapidly changing technology.
Online Gambling Sports Stocks
Potential goldmines like Japan and Brazil offer opportunities for major land based casinos to continue growing. And virtual reality gives the online gaming world a new dimension.
You can be sure that publicly traded casino companies will try to take advantage of upcoming technology and/or new markets.
That said, let’s look at 7 public casino companies that are eyeing major growth over the coming years.
1. Las Vegas Sands Corp.
Las Vegas Sands is the world’s largest casino company with over $14 billion in annual revenue.
This makes it seem like they don’t have much room for growth. And Sands has recently struggled because their Macau properties were stuck in the middle of a casino recession.
But the Sands Corp. is poised to take off in the future for two major reasons:
1. Macau’s gaming market is on the rebound.
2. Sands never stops looking for new areas to expand to.
Beginning with the first factor, Macau started their downturn in 2014. This is the point when the Chinese government began cracking down on money laundering and government corruption.
Many Asian high rollers were targeted during the money laundering investigations. Eventually, Chinese high rollers stopped pouring into Macau over fears that they’d be hassled.
The good news, though, is that the anti corruption campaign is slowing and Macau casinos are rebounding. This works for Las Vegas Sands, which owns the following casinos in the special administrative Chinese area:
- Sands Cotai Central
- Sands Macao
- The Parisian
- The Venetian Macao
The Sands Corp easily survived the Macau recession because they’re so focused on diversification. They have properties in Las Vegas, Macau, Singapore, and the American East Coast.
And they’re looking to expand their reach to both Japan and Brazil in the future.
Japan is the most realistic venture because the country legalized casino gambling at the end of last year. Las Vegas Sands has pledged to build a resort worth up to $10 billion.
Japan has 127 million residents and the world’s third largest economy. This is why many see the Land of the Rising Sun as the world’s next big casino market.
Sands is also looking into Brazil as a potential casino destination.
The only problem is that Brazil is years away from legalizing casinos. But this is still a country worth lobbying in because they have 207.7 million people.
2. MGM Resorts International
MGM is the biggest rival to Las Vegas Sands because they earn $9.5 billion per year and have properties in both America and Asia.
Can you re raise a call in poker tournaments. MGM is especially dominant on the Las Vegas Strip, where they own everything from casinos to arenas. Here’s a look at their Vegas Strip properties:
- Adventuredome
- Aria Resort & Casino
- Bellagio
- Circus Circus Las Vegas
- CityCenter (jointly owned with Dubai World)
- Delano Las Vegas
- Excalibur
- Luxor
- Mandarin Oriental
- Mandalay Bay
- Mandalay Bay Convention Center
- Mandalay Bay Events Center
- MGM Grand Las Vegas
- MGM Grand Garden Arena
- Monte Carlo
- New York New York
- Skylofts at MGM Grand
- Slots A Fun Casino
- The Mansion at MGM Grand
- The Signature at MGM Grand (jointly owned with Turnberry Associates)
- The Mirage
- T Mobile Arena (jointly owned with AEG)
- Vdara
- Veer Towers
Casino gaming isn’t booming on the Vegas Strip, but entertainment and other ventures are. This is why MGM is poised for success with venues like their new T Mobile Arena, which hosts concerts and conventions.
The company has done well at expanding across the US. They own casinos in Atlantic City (Borgata), Biloxi (Beau Rivage), Detroit (MGM Grand), Maryland (MGM National Harbor), and Massachusetts (MGM Springfield).
Where MGM looks to really gain the most growth is their Macau properties. They own Grand Macau and will soon open Casino Cotai.
As covered before, the Macau casino market is on the upswing. And this means that MGM could earn some major profits in the coming years.
MGM is also under consideration for a Japanese casino license, which would be very lucrative.
3. Amaya Inc.
The online gaming company Amaya made waves in 2014 when they purchased PokerStars for $4.9 billion.
The Canadian business didn’t immediately capitalize on their investment because online poker’s popularity has been steadily decreasing over the years.
It also didn’t help that former CEO David Baazov stepped down after he was indicted on insider trading allegations.
Amaya weathered the storm, though, and have been diversifying their assets over the past few years.
Top Online Gambling Stocks
The company is focused on building their casino and sportsbook products while keeping internet poker steady. The plan is working too because their casino and sportsbook now account for over 25% of their revenue.
The entire reason why Amaya purchased PokerStars for such an outrageous price is that they saw value in the customer base. The company’s number of registered users has grown to over 108 million.
It appears that Amaya’s strategy of offering more than just poker is paying off. And they’re also in the midst of changing their image too.
The company will soon change its name to the Stars Group and move their headquarters from Montreal to Toronto. This should help in distancing them from Baazov’s insider trading scandal.
4. Wynn Resorts
Wynn Resorts has done a fine job of creating a luxury casino resort brand that spans from Las Vegas to Macau.
But Wynn has also struggled too because of their Macau properties. They own the Wynn Macau Resort, Wynn Palace, and Encore at Wynn Palace – none of which were immune to the Macau recession.
But like the Sands Corp. and MGM, Wynn should rebound nicely along with the Asian gaming destination’s economy.
Another move that will help the company experience more growth is their upcoming property in Massachusetts. Wynn is currently building Wynn Boston Harbor just outside downtown Boston.
The $2.4 billion venue will feature 629 hotel rooms, restaurants, retail outlets, convention space, and a spa.
Wynn hasn’t forgotten about their Las Vegas roots either.
CEO Steve Wynn announced that he’s overhauling the Wynn Las Vegas by 2020. The renovations will include more nongambling activities along with a clear water lagoon.
5. Net Entertainment (a.k.a. NetEnt)
Net Entertainment has been running internet casinos and supplying online software since the mid-1990s.
This makes them one of the oldest companies in online gaming. And they don’t show any signs of slowing down in the near future either.
NetEnt has produced a number of top online slots hits over the years. Here are some of their most popular games:
- Aliens
- Arabian Nights
- Blood Suckers
- Blood Suckers II
- Dead or Alive
- Drive: Multiplier Mayhem
- Gonzo’s Quest
- Guns N’ Roses
- Hall of Gods
- Jack Hammer
- Jack Hammer 2
- Mega Fortune
- Mega Joker
- Starburst
- Wild Wild West: The Great Train Heist
Net Entertainment has also done a great job of entering the live dealer gaming space. They now feature different variations of live blackjack and roulette games.
What makes NetEnt stand out among other online gaming providers is their attention to detail and quality.
They’re also quite good at adapting to industry trends.
This is why we see Net Entertainment continuing to lead the internet gaming world for years to come.
6. Genting Group
No casino company is more international than the Genting Group.
The Malaysian business has properties in China, Hong Kong, Singapore, the Caribbean, the UK, and the US. Here are some of their notable establishments:
- Resorts World Manilla
- Resorts World New York
- Resorts World Sentosa (Singapore)
- Crockford’s Club (London)
- The Colony Club (London)
- Genting Chinatown Casino (London)
This company has also planned projects in South Korea, Las Vegas, and Miami, Florida.
Based on their experience in navigating international casino waters and continued growth, we expect the Genting Group to continue spreading their brand.
7. Boyd Gaming
Boyd Gaming is different from the other companies on this list because they have a narrower focus. Specifically, Boyd Gaming builds regional casinos in the United States.
They currently feature 22 casinos throughout eight states, including Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Nevada, and New Jersey.
Boyd’s diversification has set them up well to avoid downturns in major casino markets like Las Vegas, Macau, and Singapore.
The company did have one major hiccup in 2006 when they were building a Las Vegas Strip casino. But they were forced to abandon the project and sell the property for $350 million.
In hindsight, this was a good turn of events because Boyd avoided opening a Vegas casino during the American recession (2008 10). Since then, they’ve continued to thrive by serving different regions in the US.
Boyd Gaming also has an internet gaming partnership with California’s Pala Interactive and GVC Holdings (under former bwin.party brand). Luxury of life slot machine. This puts the business in a good position to take advantage of the US online gaming market when it finally expands.
Conclusion
The casino gaming world is far from reaching its peak. This is why publicly traded companies continue to invest in new properties and lobby governments to legalize gambling.
The question remains which of these companies gain the most from budding casino markets and new technology.
Las Vegas Sands has proven successful at winning over government officials and earning casino licenses. This includes when they won the right to build the Marina Bay Sands in Singapore over MGM.
Both companies will square off in Japan again with another casino license on the line.
Another thing to watch in the publicly traded gaming world is the development of Amaya.
I covered how the internet gaming giant has been diversifying to casino gaming and sports betting. Will they eventually become a giant in the online casino world?
It’ll also be interesting to see how Genting World’s new projects come along because they’re set for expansion in Miami, Vegas, and South Korea. Perhaps they can grow to the level of MGM and Sands Corp if these projects go well.
I’m also interested in any up and coming businesses that could break into the upper echelon. That being said, it’ll be fun to watch these developments in the coming years.
Please enable JavaScript to view the comments powered by Disqus.Written by Brian Hicks
The Unlawful Internet Gambling Enforcement Act (UIGEA) was first put in place in late 2006. However, if it's reversed, as Barney Frank is tying to do, the United States could reap a $17.6 billion profit over the next 10 years, according to a PricewaterhouseCoopers study.
As the 111th Congress begins work under a new administration, Frank has already expressed interest in reintroducing legislation that would counter the UIGEA, reportedly telling the Financial Times that he wants to 'reintroduce a bill in the next few weeks to establish a licensing and regulatory framework for online gambling operators.' It'll be similar to the Internet Gambling Regulation and Enforcement Act of 2007 (IGREA), which was introduced by Frank, attracted some support, but never made it to the House for a vote.
And, according to Poker News, Franks expressed belief to the Financial Times that the 'chances for the new legislation to become law to be much better than had been the case for the IGREA, both because of the change in administration as well as 'because public opinion [is] demanding the right to gamble online.'
On this news, there are two stocks you must own now.. but we can't divulge which ones they are in this forum without unfairly rocketing them with tens of thousands of readers. Instead, we've posted their names in the latest SC Trading Pit article, available here.
But understand this: We're simply trading news with these two trades. As we get closer to bill reintroduction, we expect these stocks to move even higher. And if a bill were to be approved, we'd look to ride out the news dissemination momentum.
Why Trading on the News Works
You see, what allows us to trade on news is information friction, or the delay in the dissemination of news to a greater number of investors through electronic media. Sometimes the news or rumor we pick up on won't be fully disseminated, meaning that the intended audience won't get it until later in the day when they get home from work. By then, we've already bought the stock and are just waiting for the trigger (the nightly news report, for example) that'll throw gasoline on our small flame.
But the question remains, can the average investor really profit from news without having proprietary research?
![Online Gambling Company Stock Online Gambling Company Stock](/uploads/1/3/6/6/136676286/298761068.jpeg)
Yep.
As a study from the Harvard Institute of Economic Research observes, 'New technology is rapidly democratizing securities markets. The costs of gathering information and executing trades are being driven to negligible levels. These changes allow a rapidly growing base of investors to participate in the financial system.'
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And there are dozens of high-level studies to support my news-driven investment approach.
'I examine returns to a subset of stocks after public news about them is released. I compare them to other stocks with similar monthly returns, but no identifiable public news. There is a major difference between return patterns for the two sets. I find evidence of post-news drift, which supports the idea that investors under-react to information [ . . . ] There is a large amount of evidence that stock prices are predictable.'
—Wesley S. Chan, M.I.T., Stock Price Reaction to New and No-News: Drift and Reversal after Headlines
'Arguably, the most important process affecting price movements is the news arrival process. For example, in Ross (1989) the volatility of stock price changes is directly related to the rate of flow of information to the market [ . . . ] On days no news arrives, trading is slow and price movements are small. When new information arrives that results in a change in expectations, trading becomes vigorous and the price moves in response to the impact of the news [ . . . ] In addition to price movements, news arrivals can affect the time between trades, number of transactions, and volume of trade.'
—John H. Maheu, University of Alberta, and Thomas H. McCurdy, University of Toronto, News Arrival, Jump Dynamics and Volatility Components for Individual Stock Returns
'Periods of good news are followed by periods of unusually high returns relative to natural benchmarks, with the reverse for bad news [ . . . ] Post-event drift is the tendency of individual stocks' performances following major corporate news events to persist for long periods in the same direction as the return over a short window—usually one to three days—encompassing the news announcement itself.'
—Andrew Jackson and Timothy Johnson, Unifying Under-reaction Anomalies
So the next time someone says you can't trade on news, ignore them.
Trading on the News: A Mental Note
Please note, trading on news alone can be a dangerous, highly volatile blood sport. It's the reason it's not the sole trading apparatus in SC Trading Pit.
When we're not trading news, we trade volume spikes, undervalued gems, earnings growth, the undiscovered, the forgotten, the ignored, the ones with little or no analyst coverage, momentum, blood in the streets, technical set-ups and candlestick patterns.
Online Gambling Stock Price
We're not your average run-of-the-mill small cap letter. While we'll take the small 10% gainers, we're really looking for the next Yahoo, eBay, and Wal-Mart.
For profit possibilities like these, visit SC Trading Pit.
Good Investing,
Ian L. Cooper
http://www.wealthdaily.com
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