Sports Betting Stocks Versus Gambling Stocks

When it comes to gambling stocks, there are many different ways to get exposure. Some stocks provide exposure to regional casinos, while others are focused more on online gambling. Still others are more focused on sports betting. There is also the question of geography, as each company has exposures to different markets.

Get Our Activist Investing Case Study!

Get the entire 10-part series on our in-depth study on activist investing in PDF. Save it to your desktop, read it on your tablet, or print it out to read anywhere! Sign up below!

Q3 2020 hedge fund letters, conferences and more

So how do you choose from among the many different gambling stocks? We’re going to discuss sports betting stocks and why you might want to consider sports betting stocks alongside or instead of regional casino stocks.

Data suggests quant hedge funds are having a lousy 2020, especially compared to traditional stock pickers. According to Bank of America, for the year to the end of September, the average quant US equity mutual fund was up just 3.3% compared to 8.3% for the average stock picker. Other research suggests an even worse performance. Read More

What are some sports betting stocks?

It’s important to note that some stocks provide exposure to both sports betting and regional casinos. Thus, for investors who want to be diversified within the gambling industry, they might be a better option. Some examples of stocks with exposure to both halves of the gambling whole include Caesars Entertainment, MGM Resorts and Penn National Gaming.

On the other hand, there are also some pure play names when it comes to sports betting. Perhaps the most well-known is DraftKings, which has really taken off this year since its combination with a special purpose acquisition company, which took it public.

Another pure play in the area of sports betting is Flutter Entertainment, which owns a wide variety of sports betting names, including FanDuel, Fox Bet, PokerStars, Sky Betting, Betfair and Paddy Power. One other name that’s known for sports betting is William Hill, although it will be combining with Caesars Entertainment in the near future.

How sports betting stocks differ from other gambling stocks

Sports betting stocks differ from other gambling stocks in more than just the nature of their business. This has become even more apparent during the COVID-19 pandemic, which required most regional casinos in the U.S. to shut down temporarily.

Perhaps the biggest difference between these two categories of gambling stocks is the fact that many sports betting companies have exposure to online gambling, while regional casinos require gamblers to be at their brick-and-mortar establishment in person. This has been especially beneficial during the pandemic as many people turned to online gambling to get their fix since they couldn’t visit their local casino.

If you’re thinking about wagering on either regional casino stocks or sports betting stocks, you should take the time to do some research and determine which stocks are the best fit for your portfolio. If you’re bullish on gambling in general, especially due to the possibility of pent-up demand caused by the pandemic, then you might want to consider some from each of these two categories of gambling stocks.

Comments are closed.