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Top 3 Gambling Stocks to Look Out for in 2024

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2024-01-08

Top 3 Gambling Stocks to Look Out for in 2024

Some gambling companies are well-positioned for a strong 2024; in this article, we highlight some of the best gambling stocks for the year ahead. [Image: Shutterstock.com]

A lot to look forward to in 2024

As the new year begins, many people are looking ahead to see what opportunities 2024 might bring. They could be looking to get healthier, have a better work-life balance, and improve their financial situations.

a lot of interesting investment opportunities

The global gambling industry presents a lot of interesting investment opportunities for individuals who want to get some money into the market.

Never has there been a time when legal gambling has been more prevalent and many companies have taken advantage of its popularity. This article looks at three gambling-related stocks to consider adding to your portfolio.

Note: These are just the author’s thoughts, not official investing advice.

1. MGM Resorts International

MGM Resorts International (NYSE: MGM) is a behemoth of the global casino industry. In addition to having more than a dozen properties across the US, it also is one of six licensees able to operate in Macau. The world’s biggest gambling hub is now bouncing back strongly after its pandemic struggles, with MGM China’s net revenue in the third quarter of 2023 reaching $813m, 10% higher than the same period in 2019.

MGM has been freeing up funds in recent years to focus more on what it’s good at – investing in exciting new gaming projects. This is why it has sold the underlying real estate assets of many of its US properties.

The Las Vegas-based company is in the process of developing Japan’s first-ever casino resort, with the Osaka property set for a 2030 opening date. It is projected to generate up to $4bn in annual revenue once it’s up and running.

a frontrunner to get one of the highly-coveted New York City casino licenses

MGM is also a frontrunner to get one of the highly coveted New York City casino licenses. Its existing Empire City Casino in Yonkers looks almost guaranteed to get approval to expand its current offering. Downstate casinos could generate over $2bn in revenue per year, justifying the hefty $500m license fee.

MGM’s co-ownership of the BetMGM online gambling brand also is proving fruitful, with the operator expecting to generate a core profit of $500m in 2026. BetMGM is the third-largest US online gambling operator in terms of market share.

Added together, MGM Resorts looks to be a good buy at its current price. It has plenty of upward potential and has been buying back shares over the past couple of years, so the management clearly thinks the company is undervalued.

2. Las Vegas Sands

Since the death of Las Vegas Sands (NYSE: LVS) founder Sheldon Adelson in January 2021, the company has been undergoing some significant changes. It no longer has any properties in Sin City since selling The Venetian, Palazzo, and Venetian Expo Center for $6.25bn in February 2022.

One of its big focuses is the Asian market. It owns the Marina Bay Sands in Singapore, one of just two casino resorts in the country. It recently completed a $1bn upgrade to its hotel facilities and will spend another $3.3bn to build a fourth tower. The property’s Q3 revenue last year was $1bn.

LVS also is one of the main players in Macau, having five properties and generating almost $1.8bn in revenue across them all in Q3 2023.

proposed the development of a resort on Long Island

LVS is constantly on the lookout for potential new markets. It has proposed the development of a resort on Long Island, but with a dozen major companies all battling it out for one of three licenses, the odds are not looking too good.

And while casino gambling is not legal in Texas, things could be looking up. LVS has been spending millions in recent years lobbying lawmakers to try to get commercial casinos green-lit in the state and it looks like this plan is progressing nicely. LVS owner Miriam Adelson is buying a majority interest in the NBA’s Dallas Mavericks, which could be an indicator of things to come.

An LVS-linked entity also purchased enough land in July to build a casino close to the Dallas Cowboys’ and Texas Rangers’ stadiums. There’s typically no smoke without fire, so LVS is well-positioned if major Texas cities get the all-clear to open casinos.

With its strong presence in the Asia market and some potentially big projects on the horizon, LVS looks like a savvy investment at its current price.  

3. Evolution

Live dealer games have been the fastest-growing online casino segment for a number of years. These titles create a realistic playing environment as actual people deal cards and spin the roulette wheel. You can watch all of the action through a live stream and even have the ability to interact with the dealer and your fellow players.

Evolution Gaming Group (OMX: EVO) is by far the market leader in the space, having studios across the world. It now covers more than 15 different languages and relatively untapped markets are in its sights, with the company opening its second Latin America studio in Q3 2023. It caters to high rollers and small-stakes players alike, while the sleek features in its 100+ games keep people coming back again and again.

Evolution works with over 600 online casino operators and numerous land-based casinos.

The company also diversified its revenues by purchasing NetEnt in 2020 for about $2.1bn. It now has major casino game developers like Red Tiger Gaming, Big Time Gaming, and NoLimit City under its umbrella.

The company’s main issue is its struggle to keep up with the demand for its games. This is a good problem to have and it will be investing more resources into recruitment and new studios. The strong profit levels and cash reserves mean that Evolution has plenty of ability to do so and to continue earning an impressive margin.

While it doesn’t look like Evolution’s share price will rapidly take off, a steady and reliable uptick is expected over time. It has strong competitive advantages, which makes it more stable than a lot of other companies in the global gambling space.




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