As the gambling industry evolves, and the United States sees a run of legalization on different forms of wagering throughout the country, the way that the stock market reacts to gambling companies will be something to watch closely. As gambling operators are able to branch out into different states and offer products specific to what is legal, operators that are able to increase their market share the most will be in a position to increase their stock prices as they use the American market to their advantage. These three gambling stocks in particular are undervalued and could be poised to bring success to those willing to invest in them in the near future.
Versatility is one of the keys to having a gambling stock worth investing in, as being able to satisfy the needs of several different types of bettors is an important attribute. That is something 888 Holdings does quite well. In terms of their offerings, the 888 Casino is one of them, with the brand also offering sports betting and poker action in states where those activities are legal.
Another thing that makes a stock undervalued is when it is able to be scooped up on the cheap. And relative to many of the stocks in the gambling industry right now, 888 Holdings is more affordable despite having a lot of upside thanks to the growing presence of the company in the United States. The software from 888 is being used in the casino and sports betting products in many states, as 888 has been licensed to operate in several locations where betting activities have been legalized. If they can continue that expansion, expect a growth in 888’s stock price as well.
Another component of the gambling industry that is benefitting from the increased use of betting products are game developers. As more people play casino games, their yearning for more content allows developers to expand into new casinos and create new games for casinos in which they already operate. One of the beneficiaries of that process has been Everi Holdings, which has seen strong returns during this casino boom period.
Everi Holdings provided strong Q3 earnings as a result of their strong revenue growth. Additionally, Everi stock has doubled year over year, as increased demand for casino games has led to developers being in higher demand for their games. As casino operators are able to continue to expand in the United States and in other markets, it is worth keeping an eye out for the stock prices of Everi and other developers, as they are positioned to benefit from the increased player base globally even if they aren’t the first part of the industry that gets thought of when expansion takes place.
Caesars Entertainment Corp.
In this time filled with growth in the gambling industry, brands that have found a way to gain a competitive advantage are going to put themselves in position to grow their business and their stock price. And with the boom in the American gambling market, finding a way to gain a competitive advantage there is more important than ever. That ability has made Caesars Entertainment Corp. an undervalued gambling stock, as they have found a way to maintain brand awareness with a relevant audience.
Since sports betting was made legal across many states, Caesars has begun working with sports broadcasting giant ESPN, providing their programming with betting lines when they are brought up during their shows. As a result, when avid sports media consumers think of a sportsbook at which they can place their bets in areas where such activity is legal, there is a non-zero chance that they will reflexively think of Caesars. This is one of many factors that has contributed to a strong 52-week climb for CZR, a climb that could continue as a result of their shrewd positioning.
What makes a strong gambling stock?
When it comes to identifying stocks in the gaming industry worth investing in, growth potential is currently the most important factor to consider. With the current trajectory showing that more states will legalize online casino and sports betting, figuring out which brands are best positioned to take advantage is incredibly important. To do this, it is worth looking at what different operators have been doing in states with recent legalization activity, and which brands have expanded into new markets the most consistently.
Also, worth looking at is which entities have put themselves at the top of the minds of consumers to be considered for their business in the future. The aforementioned Caesars is a great example of this, as their association with one of the biggest brands in sports media will put them top of mind for those looking to get started betting on sports around the United States. In states where Caesars operates, that could mean a boost to their consumer base relative to other brands which could be a long-term positive from an investment standpoint.
How to project sustainability
Sustainability in the gambling space is also important, as growth is only as valuable as an entity’s ability to continue to grow. In the gambling industry, sustainability doesn’t just mean that an operator has the ability to continue expanding into new markets. It also means that it is willing to improve its products in existing markets to remain relevant in the industry. While this can often be overlooked, having a stock increase in value doesn’t do much good if it is going to decrease in value in the near future due to a lack of sustainability.
Another way to gauge the sustainability of a gambling stock is to look into the way that customer service is approached by each brand. In an industry like the gambling industry, failing to address a customer’s concerns can result in a loss of a user, which can result in a significant loss of market share if it happens enough. Looking into reviews of a company’s customer service history can provide key insights into its ability to maintain its consumer base.