Why Your 2021 Resolution Should Be to Buy More Gambling Stocks
The casino and gambling industry had a strange year last year. Traditional casino companies underperformed the market. Meanwhile, stocks like Penn National Gaming and DraftKings more than tripled their value.
The casino is back. Las Vegas Sands, Wynn Resorts, and Melco Resort have the most to gain in Macao. In the U.S., MGM Reserves declined for the year, but overall the gambling market did well. In 2021, I would expect a continued recovery in these markets and a windfall if vaccines are rolled out quickly and it's safe to hold large gatherings.
The hottest stocks in the sector last year were those with exposure to online gambling. Penn National was the surprise winner after acquiring a 36% stake in Barstool Sports for $163 million and agreeing to launch a sports betting app under the BarStool brand. Rush Street Interactive and Golden Nugget Online Gaming have also been introduced to try to capture some of the buzz in online gaming.
There's going to be a big recovery in resort and (real-world) casino gambling in 2021. This will help casino companies and take some of the growth away from online gambling. MGM Resorts is well positioned to have a great year as its two Macao resorts ramp back up and U.S. gambling recovers even more. Gan Limited provides services like games, player verification, payment services, and financial reporting to online betting license holders. Its shares are cheap at 19 times sales.