Sports Betting Stocks Report
With the federal legalization of sports betting in 2018, sportsbooks from all over the world began opening up and launching sites in the US. Major entertainment companies and others surrounding the sports and entertainment industry joined in as well.
This opened up an entire new industry for potential profit on the stock market.
Top Sportsbooks Flood the Market
Sports betting in the USA has boomed since its inception. Not even the pandemic could stop it, as revenue is far and away into the billions of dollars in just a couple short years, with some states alone reaching the billions. Some very notable sports betting companies are already being publicly traded.
- William Hill
- MGM Resorts
- Penn National Gaming
- Caesars Entertainment
- Churchill Downs
With sky high revenues along with new partnerships and expansions happening so often, the market is extremely bullish with no end in sight. Less than half the states in the US currently have legal sports betting, with California, Texas and Florida being the main exceptions.
The sports betting landscape as a whole has been nearly set however. After a couple of years, we have begun to see who the main players are, how successful they have been and what their future plans are.
Every state in the US is eventually expected to legalize sports betting, and the big entertainment and gaming companies will certainly be looking to capitalize. Some sportsbooks have become instant favorites with fans across the states, and their expansion is just getting started.
DraftKings Sportsbook (DKNG)
|Past Year||Past Month||Past Week|
|^$40.41 (400%)||^$8.35 (20%)||^$1.58 (3%)|
- Currently Trading at: $50.50 per share
DraftKings has become one of the most well known names in sports since the creation of its daily fantasy site in 2012. The company’s brand has held its place over the years and still retains a 60% share of the fantasy sports market.
When sports betting became legal, DraftKings partnered with software company SBTech to create perhaps the most anticipated online sportsbook in the United States. Though the sportsbook began in New Jersey, it has since moved to a total of nine states including Indiana, Pennsylvania and Colorado.
The company also added online casino play to its sports betting and fantasy sections. It was only in 2020 that DraftKings went public, after Diamond Eagle Acquisition Corp. acquired both DraftKings and SBTech for $2.7 billion.
DraftKings stock is currently trading around $50 per share, which seems expensive when compared to other online sportsbooks. However, there is hardly brighter outlook currently in this industry than that of DraftKings.
The company has already exceeded many of the other top sportsbooks in the industry, and its hard to see any newcomers take away too much steam. DraftKings is the most valuable sportsbook trading with a market cap of $13 billion. The experience in the industry, innovation and memorable marketing is a big reason for its popularity and results.
The popularity of DraftKings is unlikely to diminish anytime soon and with the sportsbook, fantasy gaming and now casino offerings DraftKings is able to reach even more of its desired audience. As new states launch legal sports betting, you can be sure that DraftKings will be first in line to open up.
MGM Resorts (MGM)
|Past Five Years||Past Year||Past Month|
- Currently Trading at: $28.45 per share
One of the biggest advantages that MGM holds over the other two companies listed in this article are its major holdings around the globe. The company already has massive resorts and properties in betting metrpolises like Las Vegas, Atlantic City, Biloxi, etc.
MGM Resorts has been around since 1986, and today owns around 29 unique gaming and resort establishments. The company forayed into another segment of the industry when it launched its BetMGM sportsbook in 2018. The online sportsbook and mobile apps combine sports betting, casino and poker offerings in one.
The company is currently considered the second most valuable company trading on the market in the sports betting industry. The market cap is at about $10 billion. With online sportsbooks often needing partnerships in other states, MGM has an instant advantage. The sportsbook began in Nevada and New Jersey, but has since expanded.
MGM Resorts is very similar to DraftKings with their approach to the developing sports betting industry in America. The company would like to see BetMGM in every state that legalizes sports betting, and have so far been exceeding using their own properties as basis for entries.
BetMGM is currently matched with DraftKings at nine states of operation, including New Jersey, Indiana, Colorado and West Virginia along with its giant presence in Las Vegas and Nevada.
The company just has a successful launch in the mobile only state of Tennessee and is trading around $30. Look next for the BetMGM trifecta of poker, sportsbook and casino to launch in either Michigan or Virginia. Both state launches are expected by early 2021.
Next states for BetMGM: Michigan, Virginia
Caesars Entertainment (CZR)
|Past Five Years||Past Year||Past Month|
- Currently Trading at: $69.35 per share
Despite the Caesars Entertainment company owning more properties than the abovementioned MGM Resorts, the sports betting sector of its capital still lags behind. The decision ultimately comes down to the company, as Caesars has not pursued sports betting nearly as actively as MGM nor DraftKings.
Caesars has played the industry rather safely by opening up in states where the company has properties. The online sportsbook and mobile app itself has the same features BetMGM, including sports betting, casino and poker sections.
The advertisement campaign and willingness to jump at new opportunities may have slowed down progress a little. However, that may be quickly changing.
The recent story making murmurs in the sports betting and entertainment industry is the agreed upon deal for Caesars to buy massive sportsbook William Hill (WIMHY) and all of its properties. While this is not expected to take place until late 2021, it would be one of the biggest mergers in the industry.
The deal in theory looks to be very mutually beneficial to both parties, which could see shares of each rise. Caesars will look to improve upon its current sportsbook offerings either through the leadership of William Hill or by simply using the already popular William Hill sportsbook.
Both variants will see the London-based sportsbook pick up a large number of retail locations which will help with accessibility, profit and ease the process of moving into more states. William Hill will also be able to implement the Caesars Rewards program into their own offerings.
The deal (if it goes through) will almost certainly be a success. Both companies are already experienced in their own sectors of the market. While the deal will likely not go through for a while, it certainly shows the interest Caesars has of expanding in the American sports betting landscape.