Why (Some) Gambling Stocks Are a Great Buy Right Now
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The gambling market can be a lucrative business if you place your bets right. For most of the last decade, the best investments were in Macao's casinos. Online gambling is here to stay and Macau casinos are yet to make a comeback. Las Vegas is hotter than ever.
Gambling in the U.S. has been stagnant since just before the Great Recession. Las Vegas Strip reported a record $7.1 billion in gambling revenue in 2021. The fourth quarter saw $2.2 billion, which is a pace of $8.4 billion annually.
Wynn Resorts, Melco Resort & Entertainment and Las Vegas Sands get a majority of their revenue from gambling. Gambling revenue in 2021 was $13.4 billion, down from $36 billion in 2019.
DraftKings, Rush Street Interactive and others are investing too much in the online gambling market. For them, investors should stay away. Online gambling growth can be funded with existing cash flows. MGM Resorts, Caesars and Penn National are good examples of companies that can grow their business without burning too many resources.
Gambling stocks are a good buy right now. MGM Resorts has one of the top market shares for online gambling with BetMGM and two casinos in Macao.
