The global gambling industry has witnessed remarkable growth in recent years, driven by increasing consumer demand and the proliferation of online betting platforms. As we enter the year 2024, the potential for fast international growth in gambling companies has captured the attention of investors worldwide. This text explores the concept of global profit centers in the gambling sector and highlights the opportunities for investing in companies with the potential to rapidly expand across international markets.
By delving into the key factors contributing to the growth of the industry, such as regulatory developments, technological advancements, and changing consumer behavior, this text aims to provide valuable insights for investors seeking to capitalize on the global gambling boom. With a focus on identifying promising gambling companies with strong growth prospects, this text aims to equip readers with the knowledge needed to make informed investment decisions in this thriving sector.
1. MGM Resorts
MGM Resorts, a prominent player in the gambling industry, has solidified its standing with a diverse portfolio that includes iconic establishments like the Bellagio and MGM Grand on the Las Vegas Strip, as well as majority stakes in MGM Macau and MGM Cotai in Macau. This strategic presence extends to key locations, making MGM Resorts a powerhouse in both the American and Asian markets.
In the face of challenges brought about by the pandemic, MGM Resorts demonstrated resilience by executing a remarkable recovery, rebounding to new heights reminiscent of post-financial crisis successes. This resurgence was fueled by strategic investments, including a significant one from IAC/Interactive, and a strategic shift towards online gaming through BetMGM. The integration of sportsbooks into various properties capitalized on the growing demand for online betting, leading to record-breaking EBITDAR for both its Las Vegas Strip and regional properties in 2022.
Amidst setbacks in China due to COVID-19-related casino shutdowns, MGM Resorts secured a new 10-year gaming license in Macau, ensuring a strong and lasting presence in this lucrative market. The company’s ability to adapt to market trends and embrace online gambling has been a key factor in its success. As part of its commitment to providing a diverse and engaging experience for patrons, MGM Resorts also offers opportunities to play free high limit slots, enhancing the overall entertainment value for visitors at its world-class establishments. With its diverse portfolio and strategic pivot, MGM Resorts is well-positioned for continued success and growth in the global gambling industry.
2. Caesars Entertainment
Following its acquisition by Eldorado Resorts in 2020, Caesars Entertainment has emerged as the largest casino operator in the United States, boasting a market cap of $9.6 billion. Despite the merger, Caesars chose to retain its iconic name and expand its portfolio to 54 properties worldwide, with eight located on the renowned Las Vegas Strip. While traditional casino operations still generate the majority of its revenue, Caesars has strategically ventured into online gaming.
One notable move in this regard was the acquisition of the British online gaming company, William Hill Group, for an impressive $4 billion in April 2021. This investment showcases Caesars’ dedication to diversification and expansion in the online gaming sector. Although Las Vegas and regional casinos continue to contribute significantly to its revenue stream, Caesars effectively capitalizes on its national network through a robust loyalty program. This program encourages customers to visit multiple properties, further bolstering the company’s overall performance.
With a balanced approach between traditional brick-and-mortar casinos and online gaming, Caesars Entertainment is well-positioned for future growth. This strategic direction is particularly attractive to investors looking to avoid uncertainties associated with the Macau market. Overall, Caesars Entertainment presents a compelling opportunity for investors, embodying strong potential for sustained success and continued expansion.
3. Boyd Gaming
Boyd Gaming (NYSE: BYD) stands out as one of the top casino stocks, with a noteworthy Zen Score of 44. This score surpasses the industry average by 14 points, highlighting the company’s strong fundamentals and potential for growth. Boyd Gaming has also demonstrated excellent performance, delivering a stock return of 5.28% in the past year, outperforming other players in the casino industry by an impressive 20 percentage points.
Analysts project an average one-year price target of $74.57 for Boyd Gaming, reflecting a potential upside of 15.69% from its current stock price of $64.46. This optimistic outlook underscores the positive sentiment surrounding the company’s prospects.
Wall Street analysts largely hold a consensus Buy recommendation for Boyd Gaming. Among the 7 analysts covering the stock, 57.14% have issued a Strong Buy rating, indicating strong confidence in the company’s future performance. Additionally, 42.86% of analysts have issued a Hold rating, while there are no Sell or Strong Sell ratings.
Overall, Boyd Gaming exhibits promising potential as a casino stock, with favorable reviews from analysts and a solid track record of outperformance. Investors may find it an appealing option for capitalizing on the growth opportunities in the casino industry.
4. Golden Entertainment
Golden Entertainment (NASDAQ: GDEN) emerges as the leading casino stock, boasting an impressive Zen Score of 53, which outshines the industry average by 23 points. This high score indicates the company’s strong fundamentals and potential for success. Golden Entertainment has also displayed resilience, with a stock decline of only -2.58% over the past year, outperforming other casino stocks by 12 percentage points.
Analysts predict an average one-year price target of $51.00 for Golden Entertainment, suggesting a potential upside of 29.87% from its present stock price of $39.27. Such a positive outlook underscores the optimistic sentiment surrounding the company’s future prospects.
According to Wall Street analysts, Golden Entertainment garners a consensus Buy recommendation. While there is only one analyst covering the stock, it is worth noting that they have issued a Buy rating, indicating confidence in the company’s performance. Notably, there are no Hold, Sell, or Strong Sell ratings.
Overall, Golden Entertainment presents an appealing investment opportunity within the casino industry. With a strong Zen Score, positive analyst sentiment, and notable stock performance, the company showcases promising potential for growth and success in the market.
5. PENN Entertainment
PENN Entertainment, valued at $4.5 billion, experienced a remarkable surge in its stock during the early stages of the pandemic. This growth can be attributed to the company’s successful foray into online gambling. Through its subsidiaries Penn Interactive and a significant stake in Barstool Sports, PENN Entertainment strategically established its presence in the online gaming arena. With 44 properties spread across 20 states, the company has effectively positioned itself for success.
The partnership with Barstool encompasses the exclusive promotion of its sportsbooks, including Barstool Sportsbook. This collaboration has enhanced PENN Entertainment’s reach and brand recognition. Additionally, the acquisition of theScore, a prominent digital media and gaming platform, for $2.1 billion further solidified PENN Entertainment’s position in the online gaming sector.
Despite facing challenges from the pandemic and its impact on the company’s physical casino properties, PENN Entertainment displayed robust growth throughout 2020 and 2021. Notably, the company managed to remain profitable on a GAAP basis. While profits declined in 2022 partly due to increased lease payments, PENN Entertainment’s focus on online sports betting positions it favorably in the evolving landscape of the industry.
Summary
The global gambling industry has experienced significant growth recently, with increasing demand and the rise of online betting platforms. As we enter 2024, there is a notable opportunity for fast international growth in gambling companies, attracting the attention of investors worldwide. This text has explored the concept of global profit centers in the gambling sector, shedding light on the potential for investing in companies that can rapidly expand across international markets. By analyzing key factors such as regulatory developments, technological advancements, and changing consumer behavior, potential investors can gain valuable insights and make informed decisions in this thriving industry.
Highlighting exemplary companies like MGM Resorts, Caesars Entertainment, Boyd Gaming, Golden Entertainment, and PENN Entertainment, this text has showcased the diverse investment opportunities available within the gambling sector. With their strategic positioning, strong fundamentals, and resilience in the face of challenges, these companies represent appealing prospects for investors seeking to capitalize on the expansion of the global gambling market.
