Rush Street, Sports Betting Stocks Seeing Big Gains Mid-March
The second week of March saw positive gains across the board for sports betting and gaming stocks. As the industry continues to grow, gaming companies stocks continue to remain bullish and profitable. Both Penn National and Churchill Downs as both continue to make positive adaptations to the ever growing sports betting industry.
Sports Betting Stocks: Biggest Earners of the Week
(As of Market Open on 3.12)
Biggest Change: Golden Nugget Online Gaming (GNOG): ^23.81%
Penn National Gaming (PENN): 17.35%
Rush Street Interactive (RSI): 17.19%
Draftkings (DKNG): 15.71%
Boyd Gaming (BYD): 9.61%
Caesars Entertainment (CZR): 9.14%
Churchill Downs (CHDN): 8.96%
Roundhill Sports Betting and iGaming ETF (BETZ): 7.88%
Flutter Entertainment (PDYPY): 5.46%
MGM Resorts (MGM): 5.14%
William Hill (WIMHY): 1.00%
Rush Street Interactive Over 17 Percent Rise
Current Stock Price (3/12/21): $18.95
An over 17% gain was attributed to gaming company Rush Street Interactive’s (RSI) stock price over the week. The company is based out of Chicago and owns major casino properties in major cities like its hometown Chicago and in Philadelphia. The company went public on December 30th, 2020 following a merger Technology Group Inc.
Already operating four Rivers’ casinos, the company has exploded into online sports betting thanks to its two online sportsbook brands, BetRivers and SugarHouse. In addition to sports betting, the gaming sites also include online casino games and poker, depending on the version.
Expansion of these two sites was made quickly; SugarHouse is the smaller of the two, available only in New Jersey. BetRivers has been launched in a total of seven states thus far, including prime locations for betting in Pennsylvania, Illinois, Michigan and Colorado.
The most recent expansion news came in January, when the company launched its BetRivers brand sportsbook in both Michigan and Virginia. This ends up leaving a few major locations open for expansion, most notably in Nevada, West Virginia and Tennessee.
In February, Rush Street also secured access to open online sports betting in Ohio, Maryland and Missouri for 20 years. While Missouri is a major hotspot for in person gambling, none of the states have fully legalized the online sports betting industry. Should legislation be passed, Rush Street is expected to quickly be operating.
Buy, Hold or Sell? Rush Street released fourth quarter and 2020 financial results on March 10th, leaving insights into its growth so far. The biggest change came in revenue, up 337% from 2019. Rush Street expects this to increase in 2021. With the return of sports and the upcoming March Madness tournament returning, BetRivers is in a great place for short-term gains. The agreement made in states like Missouri as well as currently legal states untapped by Rush Street like Nevada leave a positive outlook for long-term gains as well.
Churchill Downs Continues Growth with Steady Week
Current Stock Price (3/12/21): $252.20
The gaming/sports betting/horse racing company has been steadily making gains, both in pricing and surrounding the growing entertainment industry in America. Churchill Downs Inc. (CHDN) in January made the inevitable decision to continue expanding on its horse racing history to sports betting, reporting that its online sportsbook, BetAmerica, had been approved for a license in Tennessee.
Churchill Downs Inc. is based out of Louisville, Kentucky and owns the legendary Churchill Downs Racetrack, which hosts the annual Kentucky Derby race. Its CEO is William C. Carstanjen and currently has around 4,500 employees. The company also owns casino and racing properties in nearly ten states.
Online gaming from Churchill comes in two forms. It is the patent organization for TwinSpires, an online platform for horse racing news and betting, available in more than 20 states. Its online sports and racebook, BetAmerica, is available in Pennsylvania, New Jersey and Indiana. The main aspect which the online sportsbook will look to is the horse racing section, which is still largely unavailable in the industry.
Online horse race betting by BetAmerica is an expectedly well-developed section of the sportsbook, allowing it to stand out among competitors in a tight market. The company could face concerns over competitor FanDuel’s new horse racing section, as well as interest from PointsBet in the field. Both sportsbooks have proven more popular than BetAmerica.
Buy, Hold or Sell? Churchill Downs Inc. is a valuable stock going forward due to its current assets and the potential for growth. Not only for sports betting, but horse racing has also become more accessible in the past couple of years due to its inclusion in the expanded sports gaming market. BetAmerica is also one of the few online sportsbooks with horse racing included, and is also one of the best. With massive room for expansion, holding is advised for now.
Penn National Plans Additional State, Stock Price Rises
Current Stock Price: $132
Another gaming company, Penn National Gaming (PENN), has recently made an announcement to launch its signature online sportsbook Barstool Sportsbook in Illinois, which has been a hotspot for the industry.Barstool Sportsbook is one of the latest to enter the market, launching in Pennsylvania in September 2020. However, the Barstool brand has been around since 2003 as a sports and entertainment blog. This in turn has gained it a massive fan base which is already starting to follow the brand into sports betting.
Penn National is a gaming company, known especially for its casino and horse racing properties. The total properties owned by Penn National comes to a little over 40, with its Hollywood Casino brand being the most common. The company is based out of Wyomissing, Pennsylvania and its employee count is currently at 18,754.
On January 29, 2020, Penn National made perhaps its biggest acquisition by investing $163 million in exchange for a 36% stake in Barstool Sports. With the recent entry into the sports betting industry, Penn National looks to have made a good decision, and the return shows in its stocks. Over the past year from today, the stock price has risen nearly 460%, and does not show signs of slowing.
The Illinois market already has a competitive atmosphere, but Barstool’s name has gained fans from all over the country, so the sportsbook should be able to cut out its own niche. Illinois hit highs for sports betting revenue for seven months straight after its launch, and has been one of the top states in the country.
Buy, Hold or Sell? Penn National and Barstool Sportsbook are certainly not done growing. The online sportsbook is currently only available in Pennsylvania and now in Illinois, leaving plenty of room for expansion. In addition, thanks to the connections with Penn National, the sportsbook will likely expand even further into online horse racing and physical locations on Penn National properties. It's a buy and hold, probably for a while though a dip may occur after the recent news.