Some gambling companies are well positioned for a strong 2024; In this article, we highlight some of the best gambling stocks for the coming year. [Image: Shutterstock.com]
There is a lot to look forward to in 2024
As the new year begins, many people are looking to see what opportunities 2024 may bring. They may be looking to get healthier, achieve a better work-life balance, and improve their finances.
Lots of interesting investment opportunities
The global gambling industry offers a lot of interesting investment opportunities for individuals who want to make some money in the market.
There has never been a time when legal gambling has been more widespread and many companies have benefited from its popularity. This article discusses three gambling-related stocks for you to consider adding to your investment portfolio.
Note: These are just the author’s thoughts, and are not formal investment advice.
1. MGM Resorts International
MGM Resorts International (NYSE: MGM) is a giant in the global casino industry. In addition to owning more than a dozen properties across the United States, she is also one of six licensees able to operate in Macau. The world’s largest gambling hub is now rebounding strongly after struggling with the pandemic, with MGM China’s net revenue in the third quarter of 2023 reaching $813 million, up 10% from the same period in 2019.
MGM has freed up money in recent years to focus more on what it does best — investing in exciting new game projects. For this reason, it sold the underlying real estate assets of many of its properties in the United States.
The Las Vegas-based company is developing the first-ever casino resort in Japan, and the hotel is scheduled to open in Osaka in 2030. It is expected to generate annual revenues of $4 billion once operational.
The front-runner to obtain one of these highly coveted New York City casino licenses
MGM is also a frontrunner for one of New York City’s highly coveted casino licenses. The Empire City Casino in Yonkers appears almost guaranteed to receive approval to expand its current offerings. Downstate casinos can generate more than $2 billion in revenue annually, which justifies the hefty $500 million licensing fee.
MGM’s joint ownership of the BetMGM online gambling brand has also proven fruitful, with the operator expecting to generate an underlying profit of $500 million in 2026. BetMGM is the third-largest online gambling operator in the United States by market share.
Added together, the MGM Resorts look like a good buy at their current price. It has a lot of upside potential and has been buying back shares over the past couple of years, so management clearly believes the company is undervalued.
2. Las Vegas Sands
Since the death of Las Vegas Sands ( NYSE:LVS ) founder Sheldon Adelson in January 2021, the company has seen some significant changes. It no longer owns any Sin City properties since selling The Venetian, Palazzo and Venetian Expo Center for $6.25 billion in February 2022.
One of its main focuses is the Asian market. It owns the Marina Bay Sands Resort in Singapore, one of only two casino resorts in the country. It recently completed a $1 billion upgrade to its hotel facilities, and will spend another $3.3 billion to build a fourth tower. The property’s revenues in the third quarter of last year amounted to $1 billion.
LVS is also a major player in Macau, owning five properties and generating revenues of approximately $1.8 billion across all of them in Q3 2023.
He proposed developing a resort on Long Island
LVS is constantly looking for potential new markets. I’ve proposed developing a resort on Long Island, but with dozens of major companies vying for one of the three licenses, the odds don’t look very good.
Although casino gambling is illegal in Texas, things could get better. LVS has spent millions in recent years lobbying lawmakers to try to get the green light for commercial casinos in the state, and that plan appears to be progressing well. LVS owner Miriam Adelson is buying a majority stake in the NBA’s Dallas Mavericks, which could be a sign of things to come.
An LVS-linked entity also purchased enough land in July to build a casino near the stadiums of the Dallas Cowboys and Texas Rangers. There’s usually no smoke without fire, so LVS is in a good position if major Texas cities get a permit to open casinos.
With a strong presence in the Asian market and some potential large projects on the horizon, LVS looks like a smart investment at its current price.
3. Evolution
Live dealer gaming has been the fastest growing sector of online casinos for a number of years. These titles create a realistic gaming environment with actual people dealing out cards and spinning the roulette wheel. You can watch all the action through live streaming, and you can also interact with the dealer and fellow players.
Evolution Gaming Group (OMX: EVO) is the market leader in this space, with studios all over the world. It now covers more than 15 different languages, and there are relatively untapped markets in its sights, with the company opening its second studio in Latin America in the third quarter of 2023. It caters to high rollers and small bet players alike, while Stylish features in over 100+ games keep people coming back again and again.
Evolution works with over 600 online casino operators and many land-based casinos.
The company also diversified its revenues by purchasing NetEnt in 2020 for about $2.1 billion. It now includes major casino game developers such as Red Tiger Gaming, Big Time Gaming and NoLimit City under its umbrella.
The company’s main issue is its struggle to keep up with demand for its games. This is a good problem to have and will invest more resources in hiring and new studios. Strong profit levels and cash reserves mean that Evolution has plenty of ability to do this and continue to generate an impressive margin.
Although it doesn’t look like Evolution’s stock price will rise quickly, it is expected to rise steadily and reliably over time. It has strong competitive advantages, making it more stable than many other companies in the global gambling space.
