With the 2018 Football World Cup event gathering steam, investors might want to take a sneak peek at the casino space. This is pertaining to the recent report confirmed by NDTV Sports that Russia’s offshore illegal gambling business is on a constant flourish. Per Alena Sheyanova, spokeswoman for the legally registered bookmaker Leon, "The legal online betting industry is developing at phenomenal rates".
Meanwhile, the United States is also not free from illegal betting. In fact, the business is valued at billions of dollars annually in the country. This is why it was a piece of welcoming news for U.S.-based casino giants when the Supreme Court supported the legality of a 2014 New Jersey law, which allows sports betting at casinos as well as on the racetracks in the state. Furthermore, the Court ruling has opened the doors for other states to enter sports betting business.
Per Eilers&Krejcik Gaming 2017 reports, the legal sports betting market is likely to garner $6.03 billion in revenues annually by 2023. In fact, in a bid to legalize the act of laying a wager in sports field, nearly 20 states have introduced bills and many others have started dabbling in this matter. The legalization of betting is likely to intensify the scope of activities for various casino operators.
In fact, following the news of betting legalization, MGM Resorts International (MGM - Free Report) said that “We have already established the architecture to deploy sports betting as soon as the states allow us to do that.” This apart, the company has its own active mobile app PlayMGM, in Nevada. Per MGM Resorts, legalization of sports gambling will result in “hundreds of millions of dollars in profit to the company.”
Improved internet access worldwide is being exploited by many anonymous websites with no licenses but burgeoning business. The online casino market is witnessing a solid momentum, courtesy of high profile tournaments like soccer World Cup.
Casino Giants Treading on the Path of Advanced Technology
A closer look at the gambling industry reveals its rapid adherence to the advent of technology beyond the usual confines of casinos. With frequent innovations and rampant use of smart phones as well as other electronic devices, online gambling is fast gaining popularity and comfortably positioned for long-term growth.
Per a report by Forrester, more than a meager 55% of the world’s population is projected to become a smartphone subscriber by 2018. In order to capitalize on this booming trend of smartphone penetration, U.S. casino big shots are consistently devising ways to upgrade their digital capabilities and expand service portfolios to online social gaming. Thus, in the ongoing FIFA World Cup, online betting businesses visibly have high chances to thrive.
Industry Poised for Growth in the Long Run
In the past three months, the Gaming industry has collectively gained 8.9%, outpacing the S&P 500 Composite’s growth of 6.5%. This bullish scenario in the gambling industry is expected to continue through 2018 and beyond. According to Research and Markets, the global casino gaming market is anticipated to witness a CAGR of 10.16% during the 2017-2021 period. The stellar rally of casino stocks on the bourses has been supported by lenient government regulations with respect to online casinos.
Moreover, demand in the casino space is relatively inelastic as the business targets a fixed range of consumers. These buyers will continue to lap up services at casinos irrespective of market dynamics. Meanwhile, a rising middle-class segment with increased spending on leisure items and services is driving the gambling market to a great degree.
Stocks That Might Interest You
With the help of the Zacks Stock Screener, we have zeroed in on casino stocks with a favorable Zacks rank and northward earnings estimate revisions. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Melco Resorts & Entertainment Limited (MLCO - Free Report) , a leading provider of casino facilities, sports a Zacks Rank of 1. The expected earnings growth rate for the current year is pegged at 44.6%. Moreover, the Zacks Consensus Estimate for the metric in 2018 has been raised 15.7% over the last 60 days, reflecting analysts’ unwavering confidence in the company’s future bottom line potential.
Penn National Gaming, Inc. (PENN - Free Report) is increasingly expanding into online social gaming premise and looks set to gain from betting legalization. A Zacks #1 Ranked player, the stock’s earnings for 2019 are estimated to grow 18.3%. For the current year, earnings estimates have been moved 11.6% north over the last 60 days.
Meanwhile, even though the following two stocks carry a Zacks Rank #3 (Hold), investors might find the same attractive on the basis of stellar earnings estimate revisions and promises of future growth potential.
Las Vegas Sands Corp. (LVS - Free Report) is currently sees positive revisions in earnings estimates over the last 60 days. Analysts have revised estimates upward by 8.8%. Also, current-year earnings’ forecast stands at 21.4% growth year over year.
Boyd Gaming Corporation (BYD - Free Report) is also witnessing a surge in current-year earnings estimates with the consensus mark being revised 4.8% upward over the last 60 days. The company’s earnings for the year are predicted to rise 27.2% from last year’s recorded figure.
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