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The ongoing COVID-19 pandemic has devastated industries around the globe, especially stocks. Naturally, among those most affected is the gambling industry. Normally, this sphere has notched year-on-year growth. However, in 2020, due to casinos closing down for several months, it experienced an 8% drop. This is only the second time in two decades that annual revenues have fallen in this industry.
However, now, experts predict gambling is back on track and will start achieving pre-pandemic numbers, as the most recent projections suggest that the global market will grow from $465 billion in 2020 to $516 billion in 2021.
Unsurprisingly, Asia Pacific is the most massive global market, holding a 38% share. For example, investors from all over the world are putting their money into Singapore casinos—and winning—despite the fact that gambling is heavily regulated there.
North America trails behind, accounting for 29% of the world’s gaming cash flow. However, reel-spinning games are the kings of casino products, responsible for 70% of brick-and-mortar venue profits. Moreover, slots can also be played online, where they present similar numbers, guiding that section alone to start raking in $158 billion annually by 2028.
Below, we get into the five gambling stocks multiple experts rank as sure bets in 2021. These are all established entities with proven track records whose businesses should only dramatically expand in the coming years. These could be an excellent investment option for any entrepreneur in 2021.
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Gaming and Leisure Properties
Gaming and Leisure Properties is Wyomissing, Pennsylvania REIT, stands for a real estate investment trust. They were formed in late 2013 as a corporate spin-off from Penn National Gaming, specializing in casino properties. Currently, Gaming and Leisure Properties owns fifty casino estates, but only runs one of them. That is the Hollywood Casino Baton Rouge in Baton Rouge, Louisiana.
They lease establishments to Bally’s Corporation, Boyd Gaming, Caesars Entertainment, and Penn National Gaming. Their latest deal with Bally’s Corporation has led them to collecting over $60 million in rent per year and $500 million in acquisition financing. The company has an excellent reputation of creatively putting together deals and steadily paying dividends to investors of above 5%. Their stock price has already surpassed pre-pandemic levels.
Melco Resorts & Entertainment
Melco Resorts & Entertainment is a Hong Kong based owner, operator, and developer of resorts that integrate casino products throughout Asia and Europe. They began operating in 2004 as a joint venture between Crown Limited and Melco International. The company generates revenues of over $5 billion and is in the process of constructing Europe’s most impressive casino resort – City of Dreams in Cyprus.
Macau is and always has been Melco’s chief market. Since travel restrictions from mainland China recently were lifted, the expectations are that this move will positively affect the MLCO stocks. Which has moved up and down in recent years but still holds a buy rating from the Bank of America.
VICI Properties is another REIT, formed in 2017 as a spin-off from the Caesars Entertainment Corporation. Throughout the US, they own four golf courses, twenty-nine casino resorts, and multiple racetracks. VICI is part of the 2015 bankruptcy reorganization of Caesars Entertainment.
In February 2018, they completed an initial public offering, raising $1.2 billion on the New York Stock Exchange. Thus, they moved their headquarters to Las Vegas from New York City. In August 2021, VICI bought out MGM Growth Properties for $17.2 billion. They became the largest landowner on the Vegas Strip, with 660 acres. VICI stocks hit an all-time high in the summer of 2021, poised for further growth.
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Wynn Resorts is a publicly traded corporation (NASDAQ) based in Paradise, Nevada. It’s been active for almost two decades now. The famous real estate developer and the former CEO of Mirage Resorts, Steve Wynn, founded it with Japanese billionaire businessman Kazuo Okada.
This entity has developed six properties, serving Macau, Massachusetts, and the Las Vegas Valley. Their online gaming division titled Wynn Interactive will soon trade under the ticker WBET, hoping to create sizeable moves in the digital betting sphere. Wynn Resorts has managed to bounce back from the pandemic shock, even though its price is half what it was in 2018. Still, the status and potential of this company make it a potential investment.
Boyd Gaming is a Nevada juggernaut in the hospitality and gaming sphere, run by its founder Sam Boyd’s family, managed primarily by his son, Bill. They have over 25,000 employees on staff and own 15 properties that boast over 7,500 hotel rooms.
Outside of Nevada, Boyd owns casinos in Mississippi, Kansas, Illinois, Louisiana, Pennsylvania, Indiana, Iowa, and Missouri. In 2021, Boyd Gaming’s first quarter was their strongest one ever since they went public. According to analysts, they have a superior financial profile compared to competitors and have long-term upside.
The stocks of the five entities listed above, for now, seem like quality investment options going into 2022. However, other companies worth looking into are Churchill Downs, DraftKings, IGT, Red Rock Resorts, and Penn National Gaming.
About the Author
Shelly Schiff has been working in the gambling industry since 2009, mainly on the digital side of things, employed by OnlineUnitedStatesCasinos.com. However, over her 11 year career, Shelly has provided content for many other top interactive gaming websites. She knows all there is to know about slots and has in-depth knowledge of the most popular table games. Her golden retriever Garry occupies most of her leisure time. However, when she can, she loves reading Jim Thompson-like crime novels.
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