Top Reasons to Consider Online Casino Stocks in Your Investment Portfolio
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The vast majority of stock investors focus on real estate, energy, finance, and retail industries. While the established industries are great, you may want to consider diversifying your portfolio by getting into the online casino sector.
Online gambling is becoming legal around the world, from Canada and the USA to Europe and Asia. Some well-known old-school casino brands—MGM Grand, Caesars, and Golden Nugget—have already jumped on this new trend.
However, many businesses in online gaming are new startups fighting to conquer the market while it’s still new. If you are on the fence about online gaming stocks, here are some factors to consider:
Online gambling is a $100 billion industry according to research firm Statista. The industry has doubled in size in the last four years thanks to legalization in Canada and the USA.
In Canada, online gaming legalization is a matter of provincial concern. Nearly all provinces have an organization that runs online gambling. Ontario has the best iGaming laws—anyone can apply for a gambling license in the country. So far, the province has issued licenses to more than 60 online casinos.
In the US, seven states have legal online casino laws. They are New Jersey, Pennsylvania, Connecticut, Delaware, Michigan, West Virginia and Rhode Island. In most other states, mobile sports betting is legal but not online casino games.
Around the world, the UK has one of the most established online gambling markets. The country legalized online gaming in 2005. Since then, remote gambling has been generating more than $3 billion annually.
Malta is another online gaming hub loved by casinos for providing international licenses. Gambling sites based in Malta serve Europe, Asia, Africa, South America, and even some Canadian provinces.
The online gaming sector is experiencing explosive growth. In fact, it has been growing since the COVID-19 pandemic, when most retail businesses were tumbling.
Online gambling is growing because more countries are legalizing it. What’s more, many adults own Internet-enabled smartphones, which makes it easier to access an online casino.
Another reason for the growth of online casinos is that gaming as a hobby is growing. More people play online games than they used to play a decade ago. People who’ve never been to Las Vegas can now access slots on a smartphone easily.
Today’s online casinos are also safer. Two decades ago, gambling online was not always safe. The technology back then didn’t include data encryption for every customer. Additionally, it was difficult to find a trustworthy casino site.
Although online gambling is a relatively young sector, it is full of online gambling brands. As mentioned, there are two types of companies dominating online gaming.
There are old-school casino platforms with a strong online presence. And there are new school casinos. Stocks from established gambling brands are perfect for risk-averse investors. These companies are built to last in the long term. They’re properly managed, well diversified, and created to overcome any challenges experienced along the way.
New online casino stocks are great for people who don’t mind investing in high-risk stocks. Casino startups come and go. But if you can identify a new brand likely to succeed due to its excellent management and product differentiator, you should consider buying some shares.
In case you’re wondering, here are some of the most popular online gaming stocks:
- Flutter Entertainment—FanDuel, Betfair, Paddy Power, Sports bet and PokerStars
- DraftKings—owns DraftKings
- MGM Resorts—owns MGM Grand, ARIA, Bellagio, the Cosmopolitan, and BetMGM
- Caesars Entertainment—runs Caesars Palace, Harrah’s, Caesars Online and Tropicana
- Penn National Gaming—ESPN Bet, PENN Play, The Score, and Hollywood Casino.
Online gaming is highly reliant on tech advancements. It is constantly adopting innovations and this helps it grow globally. Think of crypto payments. Bitcoin helps online casinos reach a global audience.
Blockchain, the underlying technology in crypto, also helps online casinos create futuristic provably fair games. With Virtual Reality, online gaming is grabbing the attention of millennials and Gen-Zers.
Then there are graphics and video processing technologies. Advanced visuals help online gaming businesses create realistic slots and table games. Realistic-looking games attract new customers and keep existing players loyal to a brand.
Some technologies improve service delivery. For example, mobile payments increase transaction speeds, lower fees and enhance convenience. Newer technologies like Pay N’ Play by Trustly are vital in moving forward in the industry.
Pay N’ Play is revolutionizing iGaming by taking care of KYC requirements. Players hate the identity verification aspect of online gaming. By handling KYC on behalf of gamblers and casinos, online gaming becomes more convenient.
Unlike land-based casinos, online gambling businesses can explore new markets globally. All they need is an international license if targeting countries with grey legal gambling laws.
Where online gaming is legal and regulated, operators require a license from the country’s regulatory authority. Once a casino has the proper licenses, it can operate on virtually all continents in the world.
An excellent example is 888 Gambling. The casino is based in Malta and in the Isle of Man. However, its licenses allow it to operate throughout Europe, Africa, Canada, the USA, and South America.
Against that backdrop, buy stocks from iGaming companies keen on expanding in multiple markets. A company’s financial growth usually translates to the value of its stocks.
Online gaming is one of the most resilient online industries. Think about it. Politicians have been trying to ban the sector for years. Some banks have refused to work with iGaming sites. Some religions oppose the hobby.
Yet, online gambling is constantly growing. The industry’s ability to overcome challenges is one of its best features. Think of the time Google and Apple banned casino apps. The industry responded with mobile web apps.
When you invest in great casino stocks, you can be assured of one thing. There’s a high chance your stocks will grow. Challenges like regulation, negative sentiments, and competition may affect online gaming. But the industry comes with a way to overcome these problems every time.
