The global gambling market was worth an estimated $249bn in 2022, with online gambling accounting for $63bn–$75bn of that and projected to rise to $216.9bn by 2031. The biggest growth factors in the industry are:
Physical casinos experienced a sharp decline in activity during the COVID-19 pandemic. Some did not reopen at all; they have instead transformed into an online casino. This emphasis on online gambling methods has led to the appearance of new brands, such as hitnspin casino. It uses software from leading providers such as NetEnt, which is owned by Evolution Gaming Group.
The leading gambling companies make complex decisions that influence their profitability in the long term. This article will examine how one impacts the other by looking into the top 10 and the casino industry statistics.
Established in 1996 in Nevada, Caesars Entertainment, Inc. operates luxury resorts in over 20 US regions and one in Canada. The company owns gaming brands such as:
On June 19, 2024, the company acquired WynnBET in Michigan. The related press release stated Caesars Entertainment, Inc. is focusing on iGaming and online expansion. In the case of WynnBET, the goal is to launch a brand new online gaming platform and include WynnBET’s operations into it. This is slated to happen in the latter half of 2024.
On July 1, 2024, the company appointed Rodney Williams to its Board of Directors. The press release stated his key qualities are luxury brand-building and strategic and digital marketing. This would indicate the company wants to become a luxury online casino. Rodney was previously a successful leader of Diageo Beer Company and has a proven track record in the hospitality industry.
Caesars Entertainment, Inc. stock price experienced a 23.9% drop year-over-year, with the total drop of 67.7% since 2021. The stock is now at the 2018 price level, with the company finally turning a profit this year.
Analysts are overall cautious about Caesars Entertainment, Inc. stock price, stating the company is in a precarious position due to expanding online. That incurred significant one-time costs. In addition, earnings do not cover interest payments. Those analysts who trust in Rodney’s abilities see the stock price rise as high as 47.7% by the end of 2024.
Light & Wonder, Inc. operates in 6 US and 12 international locations in Africa, Australia, Asia, South America, and Europe. It has been devising and producing gaming machines, products, and services since 1973 from Las Vegas through its three divisions: Gaming, SciPlay, and iGaming. They have over 6,000 team members, with iGaming producing cross-platform games, SciPlay focusing on games with social mechanics, and Gaming creating hardware and game management systems. Such a broad area of operations was bound to produce conflicts with its competition, which is what happened.
In early June 2024, the company was sued by an iGaming company, Evolution, for copyright infringement. The claim states that the plaintiff shared some of its confidential game files with the defendant in a bid to make a joint game. Light & Wonder, Inc. refused, but soon after released two games strikingly similar to the plaintiff’s game. In another lawsuit, a different company, Aristocrat, accused Light & Wonder of poaching suppliers to copy its game.
As of late June 2024, the Light & Wonder, Inc. stock has been steadily increasing in value, surging by 11.3% compared to the month prior. Since late January, the stock price has risen by 23.48%, indicating an accelerating pace of growth. Net income increased from 23 cents per share one year ago to 88 cents, handily beating analyst growth estimates.
The explanation is simple: revenue growth. Light & Wonder, Inc. had its 12th consecutive revenue growth quarter earlier in 2024. The Services revenue grew 10% to $517mm, while that from SciPlay was record high for the division: 11% to $206mm. This was due to the acquisition of a social gaming company, Come2Play.
Headquartered in Las Vegas since its establishment in 2002, Wynn Resorts, Limited is a luxury resort company. It operates physical casinos, employing a grand total of 27,800 staff members in:
In 2023, the company decided to curb its online expansion and focus on building more luxury resorts in a few states. However, there has been strong opposition to those plans from competitors and the public. In one attempt to expand, Wynn Resorts, Limited proposed building three skyscrapers housing a luxury resort on Manhattan's High Line public park.
The opponents state it would destroy the park, which generates $50mm in revenue each year, and push out local businesses. Another company is also competing to build a luxury resort on the same spot, with the problem exacerbated by the state giving out only three casino licenses for the entire city.
In the past 12 months, Wynn Resorts, Limited stock price fell by 22.94%, with the total fall in the last 5 years at 38.24%. The stock price does recover from time to time, but price surges appear to follow seasonal patterns. The short-term financial forecast for the company is not good, with its annual revenue expected to decline for the next 3 years.
Analysts are still optimistic and see the actual stock price at $125 because the company’s gross operating margin has recovered to pre-pandemic levels. But, they don’t see the rise happening in the near future because of the company’s uncertain expansion plans.
Founded in 2013 and headquartered in Wyomissing, Pennsylvania, Gaming and Leisure Properties is an investment trust. It buys real estate that gaming operators use for their physical casinos. GLPI owns 29.3 million square feet of space across 65 locations in the US. It has no assets related to online gambling and has shown no tendencies to expand there. The GLPI portfolio includes assets such as:
But, where do the growth opportunities come from?
In mid-July 2024, GLPI entered a sale leaseback and development funding agreement with Bally’s Casino. The deal was worth $1.5bn and netted GLPI a lot of Bally’s real estate, such as the land under Bally’s Chicago Casino Resort. In return, Gaming and Leisure Properties will fund up to $940mm of Bally’s flagship casino construction costs. The blended initial cash investment yield is 8.4%.
Gaming and Leisure Properties stock price is slightly above pre-pandemic levels. While it did recover from the February 2020 crash, it seems to be range-bound between $43 and $52 per share. There are no apparent prospects for sustained growth. Analysts are cautious, labeling the stock a “strong hold.”
The stock price is stable, but the dividend has barely kept up with inflation (only 6% at the current price). Long-term investors have to make a tough choice: keep believing in GLPI or go with VICI, a competitor whose stock is showing more promise of growth.
Established in 1986 in Nevada, MGM Resorts International manages entertainment resorts that provide gaming and hospitality services. These include dining, convention facilities, and accommodation for casino and non-casino locations. MGM Resorts International portfolio consists of 31 destinations across the world, with the most recent expansion effort being an integrated resort in Japan. The company leans heavily into sustainability, earning Fortune Magazine’s “World’s Most Admired Company” award.
The company is present in several notable locations, such as:
In all locations, the company brands itself as providing larger-than-life experiences, such as in the Las Vegas MGM Grand Garden Arena. There, the audience can watch their favorite fighters or musicians create a spectacle.
The company’s stock price is up 57.75% over 5 years, indicating slow but steady growth. This is undoubtedly due to the company’s continuous expansion efforts, such as the recent launch of Washington operations through its subsidiary, BetMGM, a provider of betting services and products (note the MGM branding in the name).
Analysts consistently rate this company as a “strong buy.” It is the only one of the top three casino brands, with the other two being Las Vegas Sands and Wynn Resorts, to generate a positive ROI in the past 10 years. In the next 12 months, the analysts expect the stock price to be $57–$66.
DraftKings Inc., founded in 2012 in Boston, is a vertically integrated sports gambling service and product provider. It helps over 50 operators provide their gambling services in 15 US and global markets, which include fantasy sports. One of its biggest selling points is transparency; the company claims it will never make a deceptive or unfair statement regarding probabilities.
In mid-July 2024, the company was fined $100,000 in New Jersey for reporting inaccurate betting data to the state. The state regulators said DraftKings Inc. reported the wrong amount of money wagered by players on parlays, a specific type of bet. The company responded that the problem was due to a coding error and that it has been fixed.
In August 2021, DraftKings Inc. was involved in another incident, this time with NFTs (non-fungible tokens). The company offered NFTs under vague conditions that got it sued in Dufoe v. DraftKings, Inc., with the plaintiff alleging the NFTs were securities. Judge Denise Casper found in favor of the plaintiff in July 2024.
The company’s stock price is up 65.16% over the 5-year period, though it did experience a slump in the 2022–2023 period. Currently at $36 per share, analysts expect the stock price to rise to $89 in 12 months. Out of 37 analysts who provided their assessments in June, 30 categorized the company’s stock as “buy” or “strong buy.”
The last quarter saw DraftKings Inc. report revenues of $1.18bn, a year-over-year increase of 52.7%. For the next year, predictions see a $0.86 consensus earnings estimate, which is 431% over what the company was expected to show a year ago.
Aristocrat Leisure Limited aka. Aristocrat Technologies is an Australian company founded in 1953. It is a content creation company that provides entertainment and gaming to its customers. The content ranges from free-to-play games to real-money mobile and casino games, with the most recent emphasis on the latter. The company also generates revenue by producing systems and hardware while doing marketing and servicing for both.
In April 2024, Aristocrat Technologies acquired Neo Group Ltd. aka NeoGames, an end-to-end provider of iGaming and iLottery products and services. The acquisition cost $1.2bn in an all-cash purchase of outstanding shares for $29.50 a share. The post-acquisition report revealed the company’s long-term growth plans align with NeoGames’ product portfolio, most notably online sports betting.
Institutions hold 41% of the company, but it is retail investors who own 48%. That gives the company the reputation of having its key decisions influenced by the larger public.
In the past 12 months, the company’s stock price rose by 29.05%, ending up at $32.93. Stock price analysis shows the stock price is 11.9% below its fair value. Over five years, the stock price increase has been 64.29%, indicating an accelerating rate of growth due to increasing revenue, which rose by 38.9% in the last year.
Forecasts estimate revenue growth of 5.07% p.a. That is well below the expected growth in the Australian market, which is 13% a year.
Evolution Gaming Group AB is a Swedish company established in 2006 with headquarters in Stockholm. It produces, develops, markets, and licenses B2B casino solutions to gaming operators, who pay fixed and commission-based monthly fees to the company. The biggest advantage of Evolution Gaming Group AB is its large portfolio of games, which are protected as intellectual property. One example is Lightning Roulette, over which the company sued one of its competitors for alleged copyright infringement.
In mid-July, news broke out that Evolution Gaming Group AB would acquire Galaxy Gaming, a casino table tech and games designer. The total value of the acquisition is $85mm, or about $3.20 per share, with the main reason for the purchase being Galaxy Gaming’s large portfolio of casino games. The deal is expected to be finalized in 12 months’ time, provided all regulatory requirements are met. Refer to somagyarkaszino.com for more information on this and other gambling stories.
In the past 8 years, the company’s stock rose from $6 a share to over $100 a share, which is a 1,564% increase. However, in the past 12 months, the stock price fell by 16.34%, in part due to a class action lawsuit launched against the company for false and misleading statements.
Regulatory clampdowns on Evolution’s customers also pushed its stock price down. In May 2022, Cherry AB was fined $78mm for illegal gambling practices, which led to an immediate drop in Evolution’s stock price of 10.88%. Still, forecasts see the stock price rising to as high as $135 in the coming year.
Flutter Entertainment plc is an Irish company established in Dublin in 2016. It owns some of the most renowned sports betting brands, such as PaddyPower and Betfair. The entire portfolio of Flutter’s brands profited around $167mm in the last year. The company expects the same number to rise to as high as $785mm in 2024. The biggest growth came through its FanDuel brand, which deals in fantasy sports and offers players short-term betting options. It grew by 300%.
The Super Bowl event, held in February, was the biggest driver of engagement, revenue, and growth for FanDuel. Those brands that don’t perform as well are shut down, such as the company’s FOXBet, which was terminated last year. Internationally, Flutter’s revenue was up 3%. However, the revenue in Australia declined by 8.8% due to trading and regulatory challenges by the Australian government, with the company expecting even more challenges there.
In the last 5 years, the stock price rose by 129.92%, ending up at $181.01 in June and $200.95 per share in mid-July. That surge in stock price attracted the attention of institutions, such as the Swiss National Bank, which invested $119mm in Flutter stock mid-July.
Hedge funds are also keenly aware of Flutter’s expansion efforts, with Artemis Investment Management LLP buying $29mm worth of its shares. Retirement Systems of Alabama bought $9mm of stock, while Allspring Global Investment Holdings LLC invested $7mm in the company through stock purchases. All this led to analysts rating Flutter’s stock as a “strong buy.”
Las Vegas Sands Corp. was established in 1988 in Las Vegas, Nevada. It currently develops and manages international luxury resorts. It owns five resorts in Macau, China. One of them is The Venetian Macao with 2,905 suites. It also features gaming, retail, and meeting spaces with a combined surface area of 2 million square feet. The appearance of The Venetian Macao is designed so it blends classical Italian architecture with the modern Sands Casino Las Vegas style.
That and other properties are expensive to build and maintain, with Las Vegas Sands Corp. accruing significant debt in the post-pandemic period. However, the company has managed to generate enough profit to steadily reduce its long-term debt:
Despite significant investments, the company’s stock price still hasn’t recovered from the pandemic. In the past 5 years, the price fell by 36.16%, ending at $41.07 in July 2024. Most of that decline came in the last 12 months: 31.55%.
Analysts claim the company is using too much debt, and the interest payments are the reason for shaken investor confidence and the stock price decline. Another red flag is the unstable dividend track record, implying the company is in financial trouble and is taking on too much risk. Still, if the company can weather the storm, they claim the stock price will rise by up to 49% in the future.
