If it’s true that the casino house always wins, then surely investing in the casino industry is a safe bet. For a wide variety of reasons, choosing to invest in the activities of the most successful gambling operators has become quite popular. The trend has encouraged gambling investors the world over to put their chips down on the industry leaders in the US and abroad.
Historically, the gambling sphere has been remarkably resilient in the face of global economic recessions and inflation. Even after global health challenges, the sector has bounced back faster than other industries. Even under financial constraints, it’s clear that gamblers and bettors would rather do without other luxuries to continue visiting real money online casinos and resorts.
The numbers don’t lie. According to sources such as Statista, revenue from the online side of gambling is expected to grow annually by around 6.2%. This means that by 2029, market volume could easily sit at around $136bn. With such a healthy and optimistic outlook, anyone interested in jumping on this trend with a careful investment could profit greatly, if they play their cards right.
So, which cards should potential casino industry investors buy into? Additionally, what should newcomers know about this exciting but heavily regulated investment market before placing their chips down with a specific operator? This article aims to explore this market and unveil five stocks individuals might want to consider for their 2024 portfolio.
Gambling stocks: a safe bet?
Considering the sheer amount of quality US real money online casinos currently taking up space on the internet, it doesn’t take an investing guru to figure out the gambling market isn’t going anywhere. With no signs of slowing down any time soon, the question of whether or not to invest might seem obvious. Ride the trend while the going is good, right?
It’s a bit more challenging than that. While it’s true that the market in general is undoubtedly thriving, not all operators manage to hold on to their empire. Many extra factors can make running a casino operation more challenging compared to more traditional forms of entertainment. Unlike streaming services or video gaming, gambling stocks are more closely tied to regulatory changes.
It might go without saying that changes to national gambling laws and shifts in cultural trends can significantly impact the growth potential of the gambling market. As new challenges arise, stocks have been known to fluctuate quickly and dramatically.
These fluctuations might not be as shocking as those seen in recent crypto markets. Within the last month alone cryptocurrency traders saw over 2$bn liquidated in just two days following news of geopolitical tensions. In comparison, the casino industry is much more resilient. However, investors still have to play the game well and be wise about where and when they decide to invest.
The bottom line? Investing in casino stocks can feel a bit like sitting down at a blackjack table. But with the right strategy and knowledge of the market, it is possible to rely on that house edge to boost a personal portfolio. If they get it right, they can more easily capitalize on this volatile but booming environment.
With all this in mind, let’s go over five of the most promising stocks poised for growth, in no particular order:
1. MGM Resorts International (NYSE:MGM)
The first casino stock on this list is connected to the global entertainment and hospitality company specializing in the operation of casino resorts. After a very successful 12 months, where major Vegas sporting events in the company’s back yard drove average nightly rates near $1,000, the casino-operating powerhouse is sitting pretty. The consolidated net revenue for MGM went up by $4.4 billion during 2023’s final quarter.
And that’s not all. Moves to partner with Marriott International have also proven to be a smart business move, driving growth further with help from Marriott’s Bonvoy loyalty program. Plus, MGM’s new casino resort currently under construction in Japan promises to boost profit margins even further. All these savvy moves make this stock one to watch.
2. Wynn Resorts (NASDAQ:WYNN)
Despite some hiccups in 2023, analyst consensus reveals there are many reasons to be optimistic about Wynn Resorts’ market growth this year. The casino resort operator is enjoying such a bullish outlook because WYNN‘s Las Vegas and Macau properties have demonstrated strong performances in recent months.
The stock itself has risen by around 15.5% over the last year or so. Experts have pinned this growth to the gaming market’s recovery and the fact that macroeconomic trends and spending habits have been favorable. Among the casino gaming giants, WYNN is promising for investors because of its better-than-average resilience. The company is playing its cards right and navigating challenges in a way that positions them for growth in 2024.
3. Boyd Gaming (NYSE:BYD)
While Boyd Gaming isn’t at the top of every investing blog’s list, it’s on this one because the entertainment operator has come a very long way in a very short amount of time. According to the company’s Q3 earnings call, Boyd Gaming confidently shared that in the two short years following its capital return program, the casino company managed to return more than $1bn to its shareholders. A remarkable feat.
This stock should be approached with a little extra caution compared to the other operators on this list. While the stakes might be slightly higher, the growth potential is also larger. At the end of the year 2023, Boyd returned more than $475 million to shareholders. In a recent earnings call, Boyd Gaming confidently told shareholders that their balance sheet is the strongest it has ever been, and plans are in motion to pursue further opportunities for growth.
4. Las Vegas Sands (NYSE:LVS)
The Nevada-based casino resort operator LVS has been a top casino stock for a while now. In January, expert analysts placed the leading destination property developer as one of the top five casino stocks expected to grow this year. The main reason behind the confidence? Technological advancements are being adopted to improve gaming experiences.
Among the top casino operators, the ones that adopt cutting-edge technology including AR, VR and AI to make casino gaming more immersive, more engaging and more fun are the ones most likely to grow this year. While the company has yet to release its earnings report for 2023, analysts expect revenues to sit at around $2.96bn. If this figure is correct, it would mark an increase of around 60%.
5. Caesars Entertainment (NASDAQ:CZR)
Caesars Entertainment is another casino resort giant that appeared on the Nasdaq’s most promising casino stocks for 2024. The American hospitality and casino entertainment giant CZR has been attempting to capitalize on the country’s laxing sports betting regulations, which is expected to boost its margins.
The road hasn’t been smooth for Caesars, and recent cuts to its price target have made some investors less optimistic. However, there is a strong argument being made that holding on to CZR investments is worth it. One major reason this stock is so promising has to do with the fact that the company recently started rolling out a very promising new stand-alone app in an attempt to capture the emerging sports betting market in the US.
Now is a good time to consider investing
Without a doubt, the casino industry movers and shakers are busier than ever, building new resorts and setting up online sites as gambling regulations ease across the globe.
The fact that the market has moved online so quickly and seamlessly is a big reason why investing is so interesting this year in particular. While the stocks mentioned above focus more on physical casinos and entertainment destinations, many of them have been using their profits to expand into digital spaces. The online gambling market has seen explosive growth driven by convenience and the ever-expanding portfolio of games.
The move online means that reaching far more customers is easier than ever. With legalization spreading across the globe, particularly in lucrative markets like Asia, casino stocks offer exposure to a constantly expanding customer base. More customers means more potential for profit and this new revenue holds immense amounts of potential for the world’s leading casino entertainment brands.
Remember to look before leaping
While investing is a completely different beast from gambling, it’s not without some risk. Unlike the immediate, all-or-nothing nature of a thrilling instant casino bet, investing involves calculated risks spread out over time.
Newcomers might want to stick to more traditional stocks while getting started. As mentioned, stocks attached to gambling enterprises can shift around a lot. But for experienced individuals looking to expand an existing portfolio, gambling stocks are an interesting addition to consider. Their inclusion can add a layer of growth potential, especially considering the industry’s current positive landscape.
Instead of simply picking one or more stocks from this list to invest in, it’s better to go and do more research to determine which casino entertainment operator might be the right fit for individual investment tastes. There are many more to consider, and there’s no doubt each is taking a slightly different approach to bringing shareholder value.
Unlike a quick spin on the roulette wheel, building a successful portfolio requires a well-defined strategy and a healthy dose of caution. Only by fully understanding the risks and conducting thorough research can investors truly capitalize on this trend and potentially build a winning hand in the investment game.
