Gambling Stocks: Key Takeaways
- The must-see legal gamechanger for gambling stocks…
- The big-name big believer in stock #1 on this list (and why that matters to traders)…
- These stocks all had IPOs in the past 18 months — where will they go when the excitement dies down?
I’m watching the stocks on this list, and waiting for the other shoe to drop! Read on to learn more about the sector and my top picks.
- DraftKings Inc. (NASDAQ: DKNG … read my analysis here)
- Golden Nugget Online Gaming, Inc. (NASDAQ: GNOG … read my analysis here)
- Esports Technologies, Inc. (NASDAQ: EBET … read my analysis here)
- Rush Street Interactive, Inc. (NASDAQ: RSI … read my analysis here)
- GAN Limited (NASDAQ: GAN … read my analysis here)
Table of Contents
- 1 Gambling Stocks Background
- 1.1 Gambling Stocks to Watch
- 1.2 Gambling Stocks #1: DraftKings Inc. (NASDAQ: DKNG)
- 1.3 Gambling Stocks #2: Golden Nugget Online Gaming, Inc. (NASDAQ: GNOG)
- 1.4 Gambling Stocks #3: Esports Technologies, Inc. (NASDAQ: EBET)
- 1.5 Gambling Stocks #4: Rush Street Interactive, Inc. (NASDAQ: RSI)
- 1.6 Gambling Stocks #5: GAN Limited (NASDAQ: GAN)
- 2 Conclusion
- 3 One Platform. One System. Every Tool
Gambling Stocks Background
I don’t watch sports much … especially if you don’t count my kids’ games.
For me, sports are a distraction. I’d rather put my spare time into learning about the world, which helps me learn more about trading.
I do kind of have one exception — sports gambling. Not that I gamble. I’m talking about sports gambling stocks.
The Supreme Court reversed the federal ban on sports betting in 2018. Now about half of the country offers legal sports gambling.
It’s been 25 years since California started the ball rolling on marijuana legalization.
Check out the staggering growth in sports gambling. Lockdown-related interruptions made a mess of the sports calendar in 2020. Even so, that didn’t stop sports gambling from taking $3 billion in wagers IN A SINGLE MONTH in October 2020.
When you cross sports betting with the boom in online gambling, things get even frothier. Last year, online gambling generated $67 billion worldwide.
Estimates put the total at $93 billion by 2023.
Take a look at the gambling stocks list below. Know how many are online gambling stocks?
Yep — all of them.
Experts predict that 80% of U.S. states will offer some form of sports gambling in the next few years. This momentum combined with online’s rise gives the top gambling stocks room to grow.
Online gambling stocks in 2020 benefitted from the stay-at-home economy…
Four of the gambling stocks on this list went public in 2020. The remaining one went public this year.
Maybe these gambling companies know something we don’t…
Gambling Stocks to Watch
While we’re on the subject of gambling, I want to address a common misconception.
If I had a dime every time I heard “Is stock trading gambling?” — well, I’d have a LOT of dimes.
I know. Dave Portnoy supposedly buys stocks based on Scrabble letter picks and has won a few trades.
Listen, I’m a big fan of Dave Portnoy…
But no day trader who’s been at it longer than a year trades that way. Even if they start out following hot stock picks…
To last in trading, you have to start thinking about strategy when trades don’t work out. Or you risk blowing up your account.
One of the most important parts of trading is preparation. That’s what we’re doing here with this watchlist. It’s what you should be doing with your watchlists.
These are just stocks to watch. They’ve made moves in the past. They could move again in the future. This is part of your prep work.
How do you know what to watch? It starts with some careful thought…
Then, build your own watchlists.
Remember, there’s no such thing as stock picks. That’s the same as picking a horse that “can’t miss.”
Watch these stocks and only trade them if the opportunity’s there.
Gambling Stocks #1: DraftKings Inc. (NASDAQ: DKNG)
We’ll start our list with one of the top sports betting companies in North America.
DraftKings has been a leader in fantasy sports gambling since partnering with Major League Baseball in 2013. Over the next few years, it picked up contracts with the NHL, NFL, UFC, PGA, NASCAR, ESPN, Fox Sports, and Bleacher Report.
In 2017, a merger between DraftKings and chief competitor FanDuel was blocked. That hasn’t stopped its expansion.
This August, a merger was announced with Golden Nugget Online Gaming Inc. (NASDAQ: GNOG), the next stock on this list. The deal will add five million customers to DKNG’s base.
Price-wise, it hasn’t made much progress from a year ago. Right now it’s hovering around $50, which is pretty much where it was last September.
This stock has been anything but stable. The past year contained a few discrete upside and downside moves.
Just look at that run of red days spanning all of October 2020!
If you’re a long-biased trader, you might want to look at this two-month chart. Every few days it would run into a new range…
Its red days were mild pullbacks. The rest of the time it followed a slow grind up.
On September 21, news of a merger with U.K. betting giant Entain came out. DKNG shares tanked, and Cathie Wood was there to buy the dip.
Two ARK-managed ETFs bought $40 million worth of post-dip DKNG. Altogether, this pushed ARK’s holdings past 14 million shares.
Gambling Stocks #2: Golden Nugget Online Gaming, Inc. (NASDAQ: GNOG)
GNOG was the first gambling company stock to be blessed by a DraftKings acquisition.
It’s common for the company on the receiving end of a buyout to see its stock rise. That’s what happened to Golden Nugget Online…
When the news broke, its stock spiked by nearly 50%!
The acquiring company usually takes a hit in the short term. It’s expensive to expand.
DraftKings is betting on the steady rise of online gambling. When we talk about e-gaming stocks, GNOG is a good one…
GNOG won ‘Operator of the Year’ at the eGaming Review North America Awards each year from 2017 to 2020.
Even after the merger, GNOG continues to make its own moves…
On August 30, it announced its partnership with Arizona’s Hualapai Tribe was awarded an operator license.
Tribal gaming stands as one of the biggest challenges to gambling stocks’ expansion. It’s a good sign that GNOG knows how to work with tribal gaming companies.
Gambling Stocks #3: Esports Technologies, Inc. (NASDAQ: EBET)
EBET is still finding its footing.
Esports Technologies develops and operates platforms for esports and competitive gaming worldwide.
It also runs Gogawi.us, an e-sports betting platform that only operates outside of the U.S. Asian and Latin American bettors bet on e-gaming tournaments hosted on the site.
It made its IPO in April at $6 a share. Trading started at $21 on its first day. It rose as high as $54 a share before falling off a cliff.
On its third day, it came back down to around $20. It stayed at that level till August.
Through August and early September, it ran with the rest of the sector.
That changed when EBET announced a strategic license agreement with Aspire Global PLC. Shares dropped 16% …
As of this writing, they’re still waiting for their recovery.
Gambling Stocks #4: Rush Street Interactive, Inc. (NASDAQ: RSI)
Here’s another recent SPAC that hit all-time highs shortly after its debut.
Unlike the previous stocks, its September has been wholly positive.
Its rally started in August. Since then, it’s gone up almost 100%!
It’s the first U.S. gaming company to operate a legal online sportsbook in Latin America. Recently, it was shortlisted for ‘Sportsbook of the Year’ and ‘Casino Operator of the Year’ at the SBC Awards Latinoamérica 2021.
This company just can’t stop making news. In September it became the exclusive betting partner of Magic City Jai-Alai, the big U.S. hub for the sport.
Earlier in the month, two RSI-operated casinos launched their own live casino studios. That’s basically Zoom for table games.
This is a huge angle for online gambling. Industry analyst H2 Gambling Capital says live casino studios account for 27% of online gambling revenue.
Gambling Stocks #5: GAN Limited (NASDAQ: GAN)
GAN had its IPO in May 2020 … but it had been active on the OTC markets much longer.
This is a gaming service provider based in the U.K. Its engines power FanDuel and many other smaller gambling companies.
This is a back-end play connected with a lot of players. Most recently, it developed a platform for horse racing powerhouse Churchill Downs Incorporated.
It’s been lumbering along at the bottom of its range … As long as online gambling is growing, expect GAN to make more news.
I know these charts aren’t that exciting, but that’s not why we’re watching…
These aren’t gambling stocks to buy. This is another sector to get familiar with. This way you’re first in line when they catch fire.
Your best bet for sports gambling stocks to watch are ones that have run before. And all these stocks have shown they can spike with the best of them.
Think it over and come up with your own watchlist. You never know when it’ll come in handy.
Have you traded gambling stocks in the past? Which picks are you watching? Let me know in the comments!