п»їThese Sports Betting Stocks Have the Best Chance to Profit Now.
In-game micro-betting could become the dominant type of gambling in the hottest area of mobile betting.
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The National Collegiate Athletic Association's March Madness basketball tournaments didn't come close to generating $1 billion in sports betting wagers for New Jersey last month, though they still did help the state set records.
Yet if in-game "micro-betting" were to take hold, it could propel the sports betting revenues in a number of states upward by leaps and bounds. It could also be a huge revenue generator for Flutter Entertainment 's (OTC:PDYPF) FanDuel and DraftKings (NASDAQ:DKNG) , the two largest sportsbooks in the country.
Image source: Getty Images.
Frenetic levels of sports betting.
Since sports betting was legalized federally in the U.S. in 2018, the market has been growing fast. Almost two dozen states allow sports betting today, and another dozen are expected to legalize it this year. DraftKings believes online betting on sporting events could be a $22 billion opportunity.
Micro-betting is a subset of sports wagering, allowing gamblers to place bets on a game's outcome while it's already underway (in-game betting) or on specific events that may happen in the game, such as will a team score on their next drive (live betting).
JPMorgan analysts recently stated their belief that "in-game betting, and micro-betting in particular, are viewed as products that can help turn live sports into a more immersive gaming experience."
It's the nature of U.S. sports in particular, with their numerous instances of stopping the clock, that could allow oddsmakers to update the potential outcomes that really drive this niche betting opportunity. Unlike soccer, where continuous gameplay is the norm, football, basketball, and baseball -- the reigning triumvirate of U.S. sports -- all have significant downtime in between plays.
Setting up the play.
More betting generates more revenue for operators, and increases the likelihood of greater user engagement. A viewer who has skin in the game has increased incentive to remain engaged longer, which leads to opportunities for greater advertising revenue, benefiting operators and broadcasters.
We're seeing the industry lay the groundwork for this:
DraftKings just bought BlueRibbon Software to let it create incentives for users to engage with its internet-gaming and sports-betting products. Live-streaming sports broadcaster fuboTV (NYSE:FUBO) just bought fantasy sports outfit Balto Sports as a means of expanding into sports betting. Bally's (NYSE:BALY) and Sinclair Broadcasting Group (NASDAQ:SBGI) just partnered to blend the casino and the regional sports network into a cohesive unit. Penn National Gaming (NASDAQ:PENN) took a 36% stake in Barstool Sports, giving it access to the brand's loyal fan base. FanDuel partnered with Simplebet last year to offer mock in-play bets for the National Football League's 2020 season.
JPMorgan estimates 75% of all sports bets in the U.K. are micro-bets. If that model were applied to U.S. sports, with the built-in advantages they have when it comes to this type of gambling, it would seem that it could be a tremendous boon to the industry.
Big opportunities in micro-betting.
So a number of players are angling to position themselves to capitalize on this rich market. But which is most likely to come out on top?
It seems intuitive that the biggest sportsbooks, FanDuel and DraftKings, which own about 80% of the market, would be early leaders, but Penn National's Barstool Sports and MGM Resorts (NYSE:MGM) should also grab a big stake in the market.
MGM has turned into the fastest-growing sportsbook, with 12 consecutive months of market share gains and growth accelerating over the past two months.
While there's always the possibility that a dark horse could come out of nowhere to take the lead in this new area of entertainment, the sites with the biggest stakes and the greatest financial wherewithal to make deals are a good bet to end up on top.
The Best Sports Gambling Stock to Buy.
Why this company is the best way to invest in a growing space.
Drawn by the lure of tax dollars, states around the nation are quickly allowing sports gambling one at a time; and Governors like New York's Andrew Cuomo are hinting at more legalization to come. As a result, the market is expected to explode to $127.3 billion in sales by 2027, thanks to a brisk growth rate of 11.5% during that time.
Such strong sector tailwinds have attracted dozens of new entrants vying to capture this expansion. While there are many interesting ways to invest in the space, Penn National Gaming (NASDAQ:PENN) is by far the best. Here's why.
Image source: Getty Images.
Penn's recent quarter.
For the fourth quarter ended Dec. 31, revenue fell 23% year over year. The company had been trending ahead of analyst forecasts, but was forced to shut down some of its Midwest casinos due to the pandemic. While the decline isn't ideal, it was far less drastic than competition like MGM Resorts International and should remedy itself as the pandemic continues to ebb.
Despite this challenge, its operating margin and earnings before interest, taxes, and non-cash costs like depreciation and amortization (EBITDA) margin both expanded briskly, and its net income turned positive year over year. The positive profit trends are nice, but to continue delivering shareholder returns going forward, the company will need to grow its revenue once more. This is where Barstool Sports comes in.
Barstool Sports and Penn are thriving together.
Penn National Gaming purchased a 36% stake in the sports-media company Barstool Sports in 2020 for $450 million. Together the duo released its Barstool Sportsbook app in Pennsylvania late last year, and broke download records despite being far outspent on marketing by the likes of DraftKings . How did this happen?
Barstool's army of 66 million monthly active users (as of 12 months ago) is how. These consumers gamble weekly at a 44% clip, in other words, just over 29 million weekly sports gamblers consistently consume Barstool's content. No competitor in the space has a built-in following like this, and it shows in download data, as well as in how Barstool's product is racking up market share in Pennsylvania thus far.
In just a few months, the company has built its total bet market share to 13.4% against far more aggressive incumbent competition -- Barstool's share continues to rise. More impressively, its revenue market share was a strong 40% as of Pennsylvania's most recent data release in December 2020. This again hints at Barstool having to spend and promote far less to rack up sales; its accepted bets are more directly translating into revenue.
Pennsylvania was just the beginning -- earlier this year, the product also debuted in the state of Michigan. This time, Penn and Barstool did have first-mover advantage, unlike in Pennsylvania, and the pair certainly capitalized. For the product's opening weekend in Michigan, its total first-time depositors and bet handle were both 68% higher than in Pennsylvania. These consumers are also engaging with the product on a daily basis 80% more frequently than versus Pennsylvania -- great for Barstool's advertising sales.
The digital sportsbook is set to open in at least eight more states this year, and if the first two debuts were any indication, that should be a very positive event for the company.
An omni-channel approach.
While the sportsbook garners a great deal of investor attention, Barstool provides so much more than that to Penn.
The sports media conglomerate hosts two of the nation's most popular 20 podcasts, and enjoys meaningful advertising and merchandise revenue streams. Perhaps as a result, despite sports' 2020 hiatus, the organization set sales and profitability records while some other sports media companies struggled.
The brand is also allowing Penn to improve and expand its brick-and-mortar footprint. Together, the combination plans to open Barstool-themed entertainment destinations in cities. When looking at the effect Barstool's name had on its East Chicago property, the decision makes perfect sense.
In the week following Penn's rebranding of its East Chicago casino to Barstool, betting handle rose by 35%, while table and slot volumes also immediately shot up more than 20% each. Additionally, in the brief time Barstool Sportsbook has been open in Michigan, 15% of its users have already converted to Penn National Gaming's loyalty program -- Barstool's clout is helping everywhere.
Penn is best in breed.
There are dozens of ways to invest in sports gambling, but none with the relevant, gigantic following Barstool features. Its army of sports-loving, gambling fans is as ideal as it gets for Penn, and despite the share price's recent success, I believe we are in the early innings of its domination. This one is a large part of my portfolio, and I think you should consider it as well.
Top Gambling Stocks to Buy in 2021.
Most of 2020 felt like a roll of the dice.
Going out to the store became a roll of the pandemic dice: Will I be able to buy hand sanitizer or find any toilet paper? Am I going to catch Covid-19? What do I do with 4,000 masks once the disease is no longer a threat? Every day feels like a gamble.
Speaking of gambling, it's been front and center on many trader's radars. Stocks like Penn National Gaming ( PENN ) - Get Report and DraftKings ( DKNG ) - Get Report have been some of the most active and best-performing trading names. I don't expect that to change for either stock in 2021, but those are the obvious names. What about a few other names to consider owning in the space for 2021?
Bet on the Basics.
If you're unfamiliar with the sector, it would be best to start with the basics. Roundhill offers the Roundhill Sports Betting and iGaming exchange-traded fund ( BETZ ) . For an investor, this is going to get you broad exposure to the entire sector at a very reasonable 0.75% expense ratio. You'll get PENN and DKNG exposure here, as those two names are the ETF's largest holdings, but what I find most appealing is the reach into foreign-listed names. Many investors aren't comfortable venturing beyond the big exchanges in the U.S. to get exposure.
BETZ's U.S. exposure sits around 34.5%. Investors are going to get good-sized exposure to Britain, Australia, Malta, Sweden, and the Isle of Man. Honestly, this holding is probably my only exposure to the Isle of Man. Additionally, the fund touches sportsbooks, technology, casinos, and iGaming with a mix of small-, mid-, and large-cap names. Admittedly, a few of the names will come up below, but this should be the go-to starter for anyone wanting exposure in the space.
While we talk about DraftKings non-stop, it's important to note FanDuel is a serious player in the daily fantasy sports (DFS) and sportsbook arena. Investors can get exposure via Flutter Entertainment ( PDYPY ) , which also gets them PokerStars. FanDuel defines itself as an innovative sports-tech entertainment company that is changing the way consumers engage with their favorite sports, teams, and leagues. In addition to FanDuel, it also has Betfair US and TVG.
The company recently expanded its reach to South America and the Caribbean via a deal with CAGE Companies. FanDuel will operate over-the-counter sportsbook at retail locations for CAGE, as well as online. Given the huge competition in the U.S., getting international exposure is a huge plus. In terms of the U.S., FanDuel already has a big reach with retail sportsbooks in 11 states and online better in eight states. That will expand soon as they add Michigan and Virginia. Once that is complete, FanDuel will have exposure to about one-fourth of the U.S. population.
Recently, FanDuel dropped an investment into an Illinois racetrack it will rebrand as the FanDuel Sportsbook and Horse Racing track. This is their first foray into racetracks, so investors should watch to see if the company continues this expansion approach. They also hold relationships with Twin River Worldwide Holdings and Boyd Gaming ( BYD ) - Get Report for casino access in Colorado and New Jersey. Investors could also consider BYD as it has a 5% stake in FanDuel.
Think Far From Home.
Staying outside the U.S., Score Media and Gaming (TSCRF) is a small name that should be considered for 2021. The company holds partnerships with Penn and Twin River Worldwide ( BALY ) - Get Report . Similar to BYD, BALY is another name with lots of ties to iGaming and sportsbooks, so it should be included in the watch list, but both are far from pure plays.
TheScore's media app delivers fans highly personalized live scores, news, stats, and betting information from their favorite teams, leagues, and players. But this company is more than just media, it is also a sportsbook and iGaming company via its sports betting app, theScore Bet. It's biggest exposure lies in Canada, which has folks excited. Legislation to legalize single sports betting at a federal level is on the table. That could add billions in annual wagers.
PENN a Deal.
The attention-getter for most is theScore's deal with PENN. The two-year agreement with market access for online and mobile sports betting and iGaming in 11 states via Penn is no doubt huge. Not only did Penn make a $10 million investment into theScore, but that number should increase. Rather than paying Penn in cash for additional market access fees, theScore can require Penn to purchase more of its shares with that payment. That could pave the way for Penn to eventually acquire theScore.
Channel FuboTV.
FuboTV ( FUBO ) - Get Report is another name I like, but not at these levels. The stock is up some 267% during the fourth quarter. While a big run isn't always a stay-away sign, the valuation is getting rich here. At the start of the month, FuboTV acquired Balto Sports. This moved the sports-first streaming platform into the online sports wagering market. Since then, the shares have been on a tear.
A little bit about the core portion of the company -- FUBO's platform offers subscribers access to 50,000-plus live sporting events annually, including college football, soccer, NHL, NBA, MLB, and NFL coverage. Subscribers get a mix of over 100 channels, including 43 of the top 50 Nielson-ranked networks. The company also recently entered a multi-year agreement with Disney ( DIS ) - Get Report for distribution of all ESPN channels as well as DisneyTV.
Despite a lack of live sports, FUBO's monthly active users are clocking 140 hours per month with a total of 98.6 million hours in the second quarter. That represented growth of 83% year over year. The company also has proprietary technology to offer multi-view streaming. In 2021, the company plans to add cloud DVR storage. This is definitely a name to buy on pullbacks, but I'm much more comfortable with it in the $20s than the $30s.
D.Y.I. With DMYD.
Next is DMY Technology Group (DMYD), which will be merging with Genius Sports Group in another special purpose acquisition company (SPAC) take-down of a private company in the space.
Genius Sports sits at the center of the sports data ecosystem. The company is the official data, technology and commercial partner that powers the global ecosystem connecting sports, betting and media. You'll find it as a partner of the NBA, Premier League, AFA, FIBA, NCAA, NASCAR, and PGA Tour, and in over 150 countries. It also includes Sportzcast, a real-time scoreboard data integration platform. This standardized distribution of real-time game data allows data to be shared on scoreboard systems around the world.
Currently, 11% of revenue comes from sports, 74% from data and streaming, and 15% from media. In 2021, Genius projects revenue of $190 million and $35 million of adjusted EBITDA. The data monetization comes from 240,000-plus sporting events with 170,000-plus events under rights and 110,000-plus under exclusive rights. To add to the attractiveness, 60% of the company's revenue is recurring and its top 10 customers only make up 30% of the revenue. As gambling increases, the need for data will come with it. DMYD is poised to capitalize on that.
Also in the Cards .
Two other names that should be considered are DMYD's sister company, dMY Technology Group (DMYT), with its purchase of Rush Street Interactive; and Landcadia Holdings ( LCA ) - Get Report , with its purchase of Golden Nugget Online Gaming (GNOG). Both DMYT and LCA have run a bit beyond my comfort level to buy them right here, right now, but even a pullback of 10% to 15% should put them on your radar.
Currently, I have DMYT on my list above LCA, so if you're looking to add only one of the two, that would be my choice. They are similar names in the iGaming/iCasino space. Both trade at a fraction of the revenue multiple to DKNG. Rush Street will be growing revenue at about twice the rate of DKNG and GNOG, with about half the revenue of DKNG and more than twice that of GNOG. In terms of revenue to enterprise value, GNOG and Rush Street even out. Lastly, both Rush Street and Golden Nugget Online Gaming will have positive cash flow.
Tim Collins is a regular contributor to Real Money, TheStreet’s premium site and provides options trade ideas each day on Real Money Pro, our sister site for active traders. Click here to learn more and get great columns, commentary and trade ideas from Jim Cramer, Helene Meisler, Mark Sebastian, Paul Price, Doug Kass, and others.
Five best betting site stocks to buy in 2021.
Exploring the aspect of buying stocks that are in the realm of betting sites.
When it comes to understanding the basic fragments of any financial aspect, you have to make sure that you are taking slow and steady steps that are filled with the absolute most necessary information. This implies the fact that there are constant updates that are happening in the world of investment that you, as a future broker will get a chance to experience.
One of the latest trends that are taking over the world by a storm is defiantly the sports betting industry, which in this situation is expanding towards the stock market. To put all of this in other words, when it comes to dealing with stocks, no matter your particular interest in buying, investing, or selling, you should make sure that you are willing enough to get behind every single detail that will help you achieve your financial goals.
Starting this journey, we are going to explore the aspect of buying stocks that are in the realm of betting sites. Knowing all of this, betting can be considered a rather crucial component in the UK, and as its popularity is only increasing the Gross Gambling Yield (GGY) is moving at the same pace. This implies the fact that over the past couple of years the GGY in the UK has increased roughly 8.4 billion British pounds.
Accordingly, in today’s article, we have managed to gather five of the best betting site socks that are worth exploring, thus giving you the necessary insight that will help you make the right choice, thus, make a profit.
William Hill.
Starting off, we are first going to explore one of the most popular betting sites that are William Hill. They are considered to be one of the most highly reliable and reputable betting sites that are currently taking over the world. They are listed on the London Stock Exchange and are a constituent on the FTSE 250 Index. Their GBX is 269.80 and their main market cap is ВЈm 2,832.20.
As listed on Safe Betting Sites UK, William Hill is a betting company that you should explore as your potential stock investment opportunity.
BET365.
Currently operating at a rather full speed, BET365 is another betting site that you should explore if you are interested in finding more about the possible stock deals that you can buy this year. Their gross profit is noted to be ВЈ2.9 billion. The net income of BET365 is at ВЈ582.5 M and the EBIT is at ВЈ660.3 M.
If you choose to further explore this segment as your potential candidate for buying stocks you should make sure that you have all of the necessary information at hand.
888Sport.
888Sport is a betting company that is under 888Holdings PLC that is known as their parent company. If you want to explore the current stock information that will help you make a further decision regarding the segment of investments you should know that their current GBX is 303.00. A further look over their years of operation will help you notice a huge increase in their revenue and they are surely moving closer to achieving their peak that was noted in 2018.
Paddy Power.
Paddy Power is an Irish betting company that is actually owned by Flutter Entertainment, a company that you will recognize if you explore the UK stock market. Their last noted GBX is at 15,600.00 and their overall revenue sits at 2.14 billion GBP.
If you take a look at the analysis of their stock market performance you will get a chance to see that they are actually experiencing a rather significant growth that will bring you great investment opportunities.
Sky Betting & Gaming.
Sky Betting & Gaming is a British-based betting company that is owned by The Stars Group. They are considered one of the largest betting base that has established an annual revenue of ВЈ624 million. Ever since 2017, they have managed to experience overall growth rates of approximately 46% and 51%.
Understanding their overall stock market analysis you can see that they are a rather safe investment choice.
The Bottom Line.
After completing the shortlist of the top five betting site stocks that you should explore, you should make sure that you are putting into practice the segments we have mentioned above. This implies the fact that you will have to make thorough research with all of your specific needs and requirements in mind before you make any further decisions.
Sports Betting Stocks Could See a Major Catalyst Soon.
By Money Morning Staff Reports , Money Morning • January 7, 2021.
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Who's more excited about the vaccine than those who have been locked down for months and unable to travel?
The answer is casino operators and casino stockholders.
While some casinos have reopened, they are not seeing a big boom in business. Many folks are still wary of traveling. It also doesn't help that the daily news is full of warnings from various agencies about inside activities and the heightened risk of coronavirus infections.
Some diehards have made their way to the casinos, but business is nowhere near peak levels. The vaccine will help change that. But it will be at least six months before gamblers start heading back in more significant numbers.
It is probably too soon to start betting on a full recovery in casino stocks.
But there are a couple gambling stocks on the rise that don't need casinos at all. One in particular is steeply undervalued right now…
Sports Betting Stocks Are Taking Over.
Online sports betting is legal in 12 states, and six more have passed legislation that have not yet implemented the infrastructure to support betting. Over the next few years, we will see the majority of states legalize online sports gambling.
They need the money.
If neighboring states legalize online sports betting and your home state does not, you can just cross the state line and make your bets.
Your state gets zero tax revenue when that happens.
WARNING: It's one of the most traded stocks on the market every day – make sure it's nowhere near your portfolio. WATCH NOW .
Online sports betting and gambling is going to be an enormous business. That's why MGM Resorts (NYSE: MGM) made an $11 billion attempt to buy out British online gambling giant Entain Plc. (OTCMKTS: GMVHY).
It's also why Entain turned it down as too low to reflect its online gambling company's real value.
Entain and MGM are already partners in BetMGM, an online sports betting operation that currently operates in nine states. The deal could still happen, but MGM will have to dig a lot deeper to get it done.
We have already seen a U.S. Casino operator, Caesars Entertainment Inc. (NASDAQ: CZR), buy a British online firm, William Hill, in the last year. In that deal, Caesars paid $3.6 billion to expand its sports betting operations.
Most of the stocks touted to take advantage of online sports betting are existing companies with large brick-and-mortar casinos. Or, they are British companies that could expand into the United States as more states legalize online betting.
Many of them – including the parent of FanDuel here in the United States, Flutter Entertainment (OTCMKTS: PDYPY) – have seen their stock more than double in recent months. Traders began to bet on the future of sports betting in the United States.
And one online sports betting stock is still awaiting its biggest pop. Here's a pure play on the very bright future of online sports betting in the United States.
Best Sports Betting Stock to Buy.
DraftKings Inc. (NASDAQ: DKNG) was one of the biggest stories of 2020, but the future could be much brighter with the best yet to come.
DraftKings estimates that the total addressable market for online sports betting and iGaming is over $40 billion in the United States. Management estimates that it should be able to claim as much as $4.9 billion of that revenue over the next few years.
DraftKings has a considerable edge over competitors. It already has more than 4 million users on its daily fantasy platform, wagering money on fantasy sports.
It will be an easy sale to move those customers into the sportsbook platform when the time comes in each state. It also has eight years of data that can be analyzed to figure out ways to acquire and retain customers.
DraftKings had a good year in 2020 despite the weirdness that was the world of sports. In the most recent quarter, the company reported revenue increases of 98% year over year. When you back out the revenue gains from acquisitions, DraftKings still saw a 42% increase in revenue from the core business.
DraftKings' data-driven marketing strategy continued to pay off as it reported an increase in unique monthly payers of 64% to over 1 million.
DraftKings also introduced 2021 revenue guidance of $750 million to $850 million. That works out to be a 45% revenue increase in 2021.
DraftKings signed deals with the Chicago Cubs, Colorado Rockies, and New York Giants to be exclusive sportsbook partners. The Cubs deal includes a possible sportsbook located in Wrigley Field.
It also announced a multi-year agreement with ESPN to work together in various areas, including becoming a co-exclusive sportsbook link-out provider and exclusive daily fantasy sports link-out provider.
DraftKings is going to be an enormous player in the online sports betting industry here in the United States. It is already active in 10 states with 20% of the U.S. population, and it's looking to expand as more states legalize sports betting.
This could be one of the great growth stock stories of the decade.
The Complete List of Best (and Worst) Stocks for 2021.
Wall Street insider Shah Gilani says 2021 could be a gold mine for Americans.
He's showing his subscribers exactly which stocks to buy and which to sell.
But you're getting it all for free – no sign-up or credit card required.
Prices, tickers, and company names will be coming your way fast.
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