On May 14, the U.S. Supreme Court annulled the federal Professional and Amateur Sports Protection Act, legalizing sports betting across the United States. Such a development also ended Nevada’s monopoly as the only state that allowed the practice.
The Supreme Court also upheld a 2014 New Jersey law which permits sports betting at casinos as well as racetracks within the U.S. state. In a 6-3 vote in favor of scrapping the prohibiting law, the court paved the way for legal punting across the country.
The states of Delaware and New Jersey followed suit and became the first states to expand betting at casinos. Such developments auger well for the overall gambling industry. Investors looking to make most of such an opportunity should bet on stocks from the space.
Delaware and NJ Become First States to Ratify
On Jun 5, Delaware became the first U.S. state to allow sports betting across its casinos. This came just weeks after the Supreme Court ruling, which legalized such activities in the country. The state already had a partial exemption from the Professional and Amateur Sports Protection Act, in the sense that it was allowed to accept wagers on NFL football, wherein, gamblers were required to pick three games for every bet.
As of now, sports gambling is available at Dover Downs Hotel & Casino, Murphy’s Race and Sports Book at the Harrington Raceway and Casino, and the Casino at Delaware Park. As a matter of fact, the mentioned places have been taking wagers since Jun 5. Bets on sports such as auto racing, baseball, basketball, boxing/MMA, football, golf, hockey and soccer are being accepted.
Delaware Governor, John Carney stated that the state had “necessary legal and regulatory authority to move forward with a full-scale sports gaming operation.” This apart, the Governor remains hopeful that this would attract more tourists to the state. Most of the states within the country see such activities as an important source of revenue.
Conforming to the norm, New Jersey also expanded sports gambling within the state. On Jun 11, New Jersey Governor Phil Murphy signed a bill which made betting on sports legal in the state. NJ.com reported, casinos and racetracks in the state would start accepting sports bets from 10:30 a.m. on Jun 14. The bill had already been passed last week. It was only initiated as law after Murphy’s signature.
The state has allowed betting on almost all professional and collegiate sports. However, bets would not be allowed on high school sporting events.
A Booming Gambling Industry
The gambling industry has been raking in gains for some time now. This bullish trend is expected to continue in 2018 and beyond. According to Research and Markets, the global casino gaming market is anticipated to witness a CAGR of 10.16% in the 2017-2021 period.
The stellar rally of casino stocks on the bourses has been supported by strength in the domestic market, turnaround in the Macau business and overall international interest in the gaming space.
4 Top Picks
With sports gambling made legal, casino stocks are poised to gain significantly. Further, lenient government regulations with respect to online casinos have led to a rapid rise of casino operators.
In this context, we have selected four stocks that are expected to gain from these factors. These four stocks carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Melco Resorts & Entertainment Limited (MLCO - Free Report) is the owner and operator of casino gaming and entertainment casino resort facilities.
The company is based out of Hong Kong and has a Zacks Rank #1. The expected earnings growth rate for the current year is 44.9%. The Zacks Consensus Estimate for the current year has improved 18.8% over the last 60 days.
Las Vegas Sands Corp. (LVS - Free Report) is an owner and operator of integrated resorts in Asia and the United States. It owns popular casino destinations such as Venetian and the Parisian.
The company is based out of Las Vegas, NV and has a Zacks Rank #1. The expected earnings growth rate for the current year is 21.3%. The Zacks Consensus Estimate for the current year has improved 9.5% over the last 60 days.
Penn National Gaming, Inc. (PENN - Free Report) is the owner and manager of a plethora of casino and gambling properties in North America.
The company is based out of Wyomissing, PA and has a Zacks Rank #1. The current cash flow growth for the company is more than 100%. The Zacks Consensus Estimate for the current year has improved 9.5% over the last 60 days.
Zynga Inc. (ZNGA - Free Report) is a provider of social games as live services. It also provides a variety of social casino games through mobile platforms as well as social networking sites, including Facebook.
The company is based out of San Francisco, CA and has a Zacks Rank #2. The expected earnings growth rate for the current year is 61.1%. The Zacks Consensus Estimate for the current year has improved 25% over the last 60 days.
The Hottest Tech Mega-Trend of All
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