Note: These are just the author’s thoughts, not official investing advice.
2024 was an up-and-down year for gambling-related stocks. Some companies like Entain and Star Entertainment were rocked by hefty fines and unease from investors. Others, like DraftKings, bounced back after a couple of years of poor performance to see big gains.
We decided to look ahead to 2025 and try to handpick a few gambling stocks to watch out for.
MGM Resorts International
As one of the biggest names in the world of casinos, MGM Resorts International (NYSE: MGM) is a behemoth in the industry. Thanks to its sizeable presence in Las Vegas and Macau, the company generated a quarterly record $4.18bn in revenue during Q3, although it still missed expectations, causing its share price to dip.
In recent years, the company has changed tactics to follow a more asset-light approach, divesting the real estate of many of its major properties to focus on what it does best: offering a high-end casino experience.
MGM is constantly exploring new opportunities with the aim of driving long-term growth, more so than most competitors. It’s the only casino operator building an integrated resort in Japan, with its Osaka resort opening in 2030. According to CEO Bill Hornbuckle, the company is also close to securing a lucrative UAE casino license.
Thailand’s government will most likely legalize casinos next year, with analysts expecting the market to be potentially worth $9.1bn annually. The tourist hotbed is already a target for MGM if this happens.
strong likelihood MGM will receive one of three highly coveted downstate New York casino licenses
Then there’s the strong likelihood MGM will receive one of three highly coveted downstate New York casino licenses before the end of 2025, allowing it to upgrade its existing Empire City slots parlor in Yonkers into a full-scale casino.
Finally, MGM owns half of BetMGM, the third largest iGaming operator in the US. This side of the business will only expand, especially as more states legalize online casinos.
MGM’s share price is down 26% year-to-date, with the P/E ratio now sitting at 11.95, which is why many investors see it as a viable opportunity for long-term gains.
Flutter Entertainment
The owner of major gambling brands like FanDuel, PokerStars, and Paddy Power, Flutter Entertainment (NYSE: FLUT) is one of the most reliable gambling companies today. US investors started taking note when the company moved its primary listing to the NYSE in May; its share price is up 35% since then.
The success of FanDuel in topping the US online gambling sector for overall market share is a key driver of its success in recent years. Management is always looking for ways to expand and adapt to changing regulatory conditions.
constantly looking at new acquisition opportunities
That’s why it’s constantly searching for new acquisition opportunities. In 2024, it bought Italian operator Snaitech for €2.3bn ($2.4bn) in September, bringing its market share in the country up to 30%. Another eye-catching deal was a $350m investment in Brazil-based NSX Group, which gives it access to “200 million soccer-loving fans.”
It was reportedly in talks to take over Playtech for about $2.5bn and acquire Penn Entertainment’s digital assets in a collaborative deal with Boyd Gaming.
With Flutter estimating that the US online gambling sector will hit $63bn by 2030, there’s plenty more room for growth for this stud of a gambling company.
Penn Entertainment
While the first two companies on our list are Rolls-Royce choices for investors, the final option is a bit more of a hidden gem. Penn Entertainment’s (NASDAQ: PENN)share price has wallowed below $20 for much of the past three years after reaching heady heights of $130 in March 2021.
Activist investors wrote an open letter in January accusing the management of poor guidance and highlighting their bloated compensation plans, leading to a poor return for the long-term shareholders.
While not too much appears to have changed on the surface, sharks are circling and looking to carve out the profitable parts of Penn’s business.
Rumors circulated during the summer that Flutter Entertainment and Boyd Gaming were considering a possible acquisition. The latter would take over the land-based assets, and Flutter would absorb the digital operations.
An acquisition could be in the cards in 2025, with investors likely benefiting from a decent premium on the current price. While regulatory concerns might be a stumbling block for Boyd Gaming, other viable buyers are looking to cement their position in the US gaming market.
It’s hard to see the Penn share price dipping too much further and JPMorgan increased its recommendation in mid-December to “overweight” with a target price of $27. It pointed toward the success of ESPN Bet and investments in retail projects starting to show positive signs
