Summary: Due to evolving regulations, expanding online presence, and tech-driven advances in wagering systems, the sports betting industry is becoming an increasingly lucrative investing opportunity. This guide will provide investing tips, list some of the most prominent sports betting stocks, and explain how to buy sports betting stocks using a regulated brokerage like eToro.
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Why you should invest in sports betting stocks
Note
Regardless of your region of residence, investing in sports betting stocks has experienced a resurge with many investors due to a couple of factors. The industry is rapidly engaging with cutting-edge technologies to enhance online accessibility, thus significantly improving its growth potential. Furthermore, as more states and regions lift bans on sports betting, new markets open and increase, providing sports betting companies with additional revenue streams. In fact, the sports betting market is expected to be worth $182.12 billion by 2030.
However, it is important to acknowledge that every investment comes with a risk. The sports betting sector is susceptible to regulatory changes, public views, and ethical concerns about gambling, as well as fierce competition that can reduce profit margins. Carefully research the market before you invest.
Top 3 sports betting stocks to buy
DraftKings
DraftKings (Nasdaq: DKNG) is a popular Boston-based sports betting and daily fantasy sports company. Since 2012, it has quickly become a leader in the online sports gambling market. The company allows users to enter fantasy sports contests in major American sports (MLB, NHL, NFL, NBA, and PGA), Premier and UEFA Champions League, NASCAR, MMA, and many others. With mobile apps, a user-friendly platform, and live betting, it has won over a lion’s share of the sports betting audience.
Note
DKNG stock price today
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Churchill Downs
- Churchill Downs (NASDAQ: CHDN) has grown from a horse racing venue in Louisville, Kentucky, to a gambling giant and one of the fastest-growing sports betting stocks in 2023. The company manages several gambling and entertainment properties, such as casinos and online wagering platforms. Besides racing, it has established a firm foothold in gaming and sports betting markets.
Note
CHDN stock price today
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MGM Resorts
- MGM Resorts International (NYSE: MGM) is a global force in the gaming and entertainment industries, with a portfolio of 31 hotels and gaming destinations worldwide. Its BetMGM sports betting division accounts for nearly a third of the total U.S. digital casino and online poker market and a 13% share of its sports betting market.
Note
MGM stock price today
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How to invest in sports betting stocks: Step-by-step
While the whole investing affair can seem intimidating initially, the process itself is relatively simple and consists of six straightforward steps that we will now explore in detail.
Step 1: Choose a broker
To buy and sell sports betting stocks, you need to get access to the stock market. You can do this by using the services of a stock brokerage.
To securely buy sports betting stocks, we recommend the following:
- Commission-free stock and ETF trading;
- 2,000+ stocks from 17 exchanges;
- Fractional shares available;
- User-friendly platform.
Highly Rated Stock Trading & Investing Platform
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Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
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0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
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Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
Every broker has pros and cons; depending on your preferences, it can be a better or worse match. In any case, you should pay attention to these factors when choosing your investing platform:
- Range of offerings: Besides sports betting stocks, you should also confirm the availability of other assets like different commodities, various stocks, forex, and derivative assets like options, CFDs, and futures. Having them readily available will be helpful when you decide to diversify your portfolio;
- Cost: The investing platforms’ industry standard is commission-free trading with no-minimum accounts for stocks and ETFs. Confirm that this is the case with your brokerage;
- Regulation and security: Stick to the investing platforms that adhere to the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) regulations. Check for two-factor authentication (2FA) and other advanced security policies;
- Fractional stock trading: Platforms that enable fractional stock trading allow you to buy stocks by the dollar amount, which suits those with limited capital or traders seeking to pursue the dollar-cost averaging approach.
Step 2: Open and fund your account
After deciding on your investing platform, you create an account and go through the verification process; just follow the instructions provided by the brokerage, usually involving your email or phone number. Once you complete it, you should transfer some funds to your account to purchase the sports betting stock you want.
Payment options usually include a bank transfer, debit or credit card, and a third-party transaction service such as PayPal (PYPL). Go with whatever fits your investing style the most.
Step 3: Choose sports betting stocks to invest in
Once you fund your account, the next step is to choose which sports betting stocks to invest in. To help you in the investing process, consider the following:
- Research companies: Look for businesses with a healthy financial history of regular growth. Check the factors such as cash flow, earnings growth, management stability, and media coverage;
- Diversify your portfolio: Do not invest everything in a single stock, no matter how profitable it may seem. Spreading your investments helps you manage risk and boosts potential returns;
- Make informed decisions: Check financial news, analyst findings, and reliable sources of information to make decisions with higher success rates.
Step 4: Decide how much you want to invest
Deciding on the right amount of cash to invest is integral to investing. After all, overextending beyond your financial capabilities can have severe consequences if your investment fails.
To help you designate the proper sum, answer these two questions:
- Are my living standards going to drop if I lose this investment?
- Do I have enough to cover at least three months of life expenses and no outstanding high-interest debt?
Besides these, the right amount of money depends on your investing style, the level of risk you are comfortable with, and the ultimate purpose of your investment.
Remember
Step 5: Place your order and buy sports betting shares
You have to place a trade order to buy sports betting stock. These four simple steps will guide you through the process:
- Step 1: Log into your exchange account and find the sports betting company’s ticker stock symbol (e.g., DKNG, MGM, or CHDN);
- Step 2: Type in the amount of stock you want to buy;
- Step 3: Select the order type (market order or limit order) and place it;
- Step 4: Confirm the trade order.
Step 6: Monitor and manage your investment
Your investment requires regular monitoring and managing as the success chances of your investment depend on it.
Ensure that you redo your research on your sports betting shares and the companies’ monetary performance. Additionally, always have the newest and most relevant information about the current status of the sports betting industry across different regions and states, the associated regulations, and the pace with which your sports gambling portfolio follows technological advances.
Pros and cons of investing in sports betting stocks
Pros
- High returns potential: The sports betting industry can earn substantial profits, especially during hugely-popular sporting events. With an increasing number of states, both in the US and outside, legalizing sports betting, there is a significant chance the profits will increase;
- Growing industry: The current trend of legalizing sports betting opens new markets for companies, enlarging the customer base and potentially increasing revenue over time;
- Technological advancements: Companies in the sector significantly invest in new tech, data analysis, and mobile software to improve odds accuracy and user experience. Investing in innovation could lead to further embracing of technologies such as AI, digital data, and remote technologies;
- Diversification: Investing in sports betting companies is a great way to diversify your portfolio with an asset different from traditional tech or manufacturing stocks;
- Stable demand for entertainment: The sports betting industry goes hand-in-hand with the entertainment sector, driving consistent demand, which leads to steady income flows.
Cons
- Competition: The sports betting market is turning increasingly fierce as new companies enter the industry, which can lead to narrower profit margins;
- Regulatory sensitivity: Sports gambling remains highly subject to strict regulations that can change suddenly and dramatically, leading to higher taxes, marketing limitations, or even outright bans;
- Volatility: The value of sports betting stocks is very volatile as different sports outcomes, consumer preference evolution, and new regulations all lead to swings in stock prices;
- Ethical issues: Companies that deal with betting may face criticism for promoting harmful behaviors like gambling and addiction.
Common mistakes to avoid when buying sports betting stocks
Make sure to avoid these common investing mistakes:
- Lack of research: Thoroughly research the stock, global market, and media industry environment before spending any money;
- Lack of strategy: Clearly define your milestones before you invest;
- Staking everything on one asset: Always diversify your portfolio;
- Falling prey to scams: Avoid illegal platforms and suspicious deals.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about how to buy sports betting stocks
Can you buy sports betting stocks?
You can buy sports betting shares just like any other stock. To access the stock market and begin investing, you need to use the services of an online brokerage. Our recommended service is eToro.
What are some of the best sports betting stocks?
There are several well-performing sports betting stocks on the market, but in this article, we have chosen to mention three of these: DraftKings (DKNG), Churchill Downs (CHDN), and MGM Resorts International (MGM).
How to buy sports betting stocks?
You can invest in any publicly traded sports betting company using a regulated online brokerage like eToro.
Should I invest in sports betting stocks?
The answer can vary due to several factors, including your investing habits, sports betting regulations, financial strategy, risk tolerance, ethical stances, etc. Besides, you should track the technology adoption rate and the global status of sports betting due to the influence these two factors have on the price of sports betting stocks.
How do I sell my sports betting stocks?
Go to your online brokerage account, find your sports betting stock, type in how many shares (or for how much money) you want to sell, and press the corresponding button.
Highly Rated Stock Trading & Investing Platform
-
Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
-
0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
-
eToro USA is registered with FINRA for securities trading.
