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Gambling Related Stocks: to Invest or Not to Invest?

Companies / Gambling Dec 20, 2018 - 11:07 AM GMT

By: Submissions


Award-winning entrepreneur Robert Arnott once said, “In investing, what is comfortable is rarely profitable.” And true, most self-made billionaires are risk takers. Of course, you also can’t invest in just about any business.

Gambling is one industry where investors are confused about whether to invest or not to. Successful casino startups can rise to be worth billions of dollars. On the downside, most of the companies fail. So, should you give the industry a try?

Lots of Successful, Publicly Traded Companies

If you only invest in publicly listed companies, there are lots of them in the gambling industry. The biggest brand, MGM Resorts International, has a market cap worth $17 billion. The Las Vegas-based company has also been on the rise since 2013, growing by 120% in five years.

Many of the popular gambling companies have been making profits consistently since they were launched. Even online gambling sites have been a big business in the last two decades. In the 2000s, the online casino industry was worth $1 billion. Today, the industry is worth over $70 billion.

While publicly traded companies tend to make profits consistently, there is no guarantee in the success of a startup. If anything, the failure rate for startups in the gambling world is as high as anywhere else. Before you invest in a new casino, be certain to do due diligence. Without proper research, investing in a gambling company is no different from gambling.

Legal Changes Impacting the Industry Positively

The recent news that New York, Louisiana, and several other states plan to legalize sports betting is good news to investors. Not exactly, if you have already invested in Vegas-based casinos as more casinos will end monopoly down there. But in the coming years, the states of gambling in the US is headed for the better.

Outside the US, Canada leads the way for countries embracing legal gambling. The UK and Australia, which already legalized the industry many years ago, continue to earn billions in revenues. In Asia, African and Latin America, gambling is experiencing similar changes. Countries that were once conservative about betting are progressive.

Unlike other industries, the growing legalization of gambling around the world will likely affect investors all over. Most of the publicly traded companies in the US, London and Macau have businesses in multiple countries. With more countries legalizing the industry, expect the established brands’ values to continue rising.

 Gambling Software Companies are just as popular

If you can’t find a casino whose stocks appear valuable to you, look around. The companies that provide games to casinos are worth billions. They are publicly traded and grow faster than most casinos. Unfortunately, the competition in the game development industry is as high as in the gambling world.

Another disadvantage in the game development segment is that most of the companies are privately funded. If you want to invest, you must contact the companies and hope they show any interest to you. If you can convince any interested company you have the money, they will certainly talk to you.

Don’t overlook sports betting companies and their software developers. Startups that also provide video games besides casino games are also excellent investment opportunities. The video gaming industry is rising at almost a similar pace as the casino industry. If you can find a company that develops games for both industries, there is a higher chance of success.

The Industry is Generally Growing

Although you don’t invest in the whole industry, it’s comforting to know the gambling industry is on a rise. That means, most casinos expect to rise in value in the future. It also means your stocks will likely gain value, but only if you invest in the proper company.

As many successful entrepreneurs have said before, investing in stocks is all about finding value where others don’t see yet. By the time investors find value in the same stocks, their prices will be up in the sky. It could take a year or ten years for that growth to happen. Take Warren Buffet’s word for it and be prepared to hold the stocks for a decade if you are serious about them.

Before you go for the stocks, make sure to understand how gambling works. Read more at New Casinos UK to find out the best online casinos in the UK. Learn how the facilities make profits, play the games and decide whether to invest.


If you want to make the most money from land-based casino stocks, visit Macau. The Chinese territory makes money than Las Vegas. While there are only 40 casinos in Macau against the 161 in Vegas, the latter made $33 billion in 2017. By contrast, Nevada made $10 billion.

In terms of growth, Macau is rising much faster than Las Vegas. In 2017, the number of people who visited Macau to gamble rose by 3.5% while the industry’s growth went up by 18%. The number of casinos opening up in the city is also growing and is expected to reach 50 casinos in the next two years.

A Changing Betting Culture

Sports betting is gradually making its mark in the gambling industry. Before 2000, the betting industry was a small segment in the gambling industry. Today, sports betting is worth more than $50 billion. The online part of the industry is worth more than $37 billion and is expected to continue growing.

Apart from the obvious growth in value, sports betting boasts of a favorable image in the general public. In many countries where sports betting is legal, bookies advertise on radio, TV and the Internet openly. By contrast, casino games only use the Internet, a few TV stations and billboards for marketing.

The positive image has helped sports betting companies continue to grow where casino-game sites fail. If history is to repeat itself, the sports betting industry has a bright future. Investing in one of the upcoming startups or already existing brands promises lots of profits.

To Conclude

Investing in stocks anywhere asks for a lot of research. You must know how to spot a company whose stocks will likely go up. In the gambling industry, things are no different. There is a lot of money to be made. But the industry is full of companies with potential and some headed to closure. Research, and decide whether to buy stocks in the industry.

By Ronny Martelli

© 2018 Copyright Ronny Martelli - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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