3 sports betting stocks ready for a bull run

3 sports betting stocks ready for a bull run

Much has been lost in the noise of recent political rhetoric, but the sports betting industry in the United States is basking in the glare of November’s progress. Voters in three other states have agreed to legalize betting on sporting events, bringing the total to 25. Now that they are seriously vying for tax and tourism revenue, many more states may soon follow suit. At stake is a part of a multi-billion dollar market that is growing at double-digit rates.

Savvy investors should evaluate potential games. Of course, many remain unprofitable and all are relatively expensive. It’s not unusual, however, at the forefront of emerging trends. Here is a non-exhaustive list of three sports betting stocks with better odds of paying than even.

Image source: Getty Images.

DraftKings

It is the poster child of the sports betting movement – and for good reason. DraftKings (NASDAQ: DKNG) has merged fantasy sports and gambling. Fans can find “action” on a daily basis as the company facilitates betting on football, basketball, soccer, golf and more. It even offers eSports video betting game League of Legends.

The premise of fantasy sports is relatively easy to understand, and a mobile app means users can place bets anytime, anywhere. As such, DraftKings is perfectly positioned to secure a significant portion of this market. Analysts collectively expect the company’s revenue to grow 53% this year, with a view to eventual profit by 2022.

And the proverbial ace in the hole: DraftKings and ESPN (owned by Walt Disney) forged an exclusive partnership last September. The two companies are integrating their digital platforms and will help each other in their promotion.

It’s hard to say how much more business this could generate for DraftKings, but just as ESPN is the undisputed king of sports television, it is also the bully of the digital sports world. In October last year, ESPN Digital’s properties drew a record crowd of 161.6 million users, while its relatively young ESPN + app ended last year with over 11 million users. paying customers, tripling its workforce at the end of 2019. Even though only a fraction of them are interested in sports betting, that’s still a lot of growth potential. As a prospect, DraftKings says the number of unique monthly bettors it serves currently exceeds one million.

Penn National Gaming

Yes, it’s the same Penn National Gaming (NASDAQ: PENN) that owns several casinos and their corresponding hotels. It also operates a handful of horse racing tracks and is even the name behind a few betting apps.

The closures resulting from the contagion of the coronavirus have had a negative impact on its business, of course. Last year’s top line is expected to be 31% lower than the 2019 total once the company’s fourth quarter numbers are released, dragging the games business into the red. But analysts expect a quick recovery. Revenue is expected to rise 36% this year, putting Penn back in the dark with earnings per share of $ 1.59.

However, these forecasts for 2021 arguably underestimate the benefit of last year’s investment in a 36% stake in Barstool Sports.

This is apparently just another sports commentary site but a big one. Barstool Sports would attract a crowd of over 65 million unique visitors each month, and perhaps more importantly, it is a potential starting point for sports betting. Penn explained as the investment materialized that 62% of the “Stoolies” were also sports bettors. Ergo, Penn helped Barstool create a site of online sports betting in September …

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