According to a report by The Business Research Company, the global gambling market reached a value of approximately $540.3 billion in 2023 and is projected to reach $744.8 billion in 2028, with a CAGR of 6.6%. This growth is expected to be supported by rising disposable incomes, political stability, and increased foreign investments in emerging markets.
Lotteries represented the largest segment in gambling, accounting for 53.9% of the total market. This segment is projected to grow at the fastest CAGR of 8.2% between 2023 and 2028 and is expected to generate $141.4 billion in global annual sales by 2028.
The online gambling market is rapidly gaining popularity. According to Research and Markets, the online gambling market is expected to grow to $153.21 billion by 2029, expanding at a CAGR of 10.44%. The widespread use of mobile phones, the internet, and convenient online payment gateways have made online gambling more accessible. The sports category is on the rise and is fueled by major sports events.
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Rise of Sports Betting
In an interview with CNBC on November 8, Jason Robins, Co-Founder and CEO of DraftKings, shared his insights on the current state of the online sports betting industry. He believes that the industry is at a critical juncture, where more people across the country are becoming aware that they can gamble legally, leading to significant growth. Robins attributes this growth to the increasing number of states that have legalized sports betting.
Robins also highlighted the vast potential for growth, pointing to the American Gaming Association’s prediction of $35 billion in legal wagers during the current NFL season, a 30% increase from last year. He is hopeful that other states, including California, Florida, and Texas, will soon follow suit and legalize sports betting. While acknowledging that the legislative process can be slow, Robins is confident that most states will eventually adopt some form of legal sports betting, paving the way for the industry as a whole to continue its upward trajectory.
As the global gambling market continues to expand at a rapid pace, driven by the growing popularity of online betting and legalization, it’s clear that the industry is on the cusp of significant growth. With that in context, let’s take a look at the 10 best gambling stocks to buy according to hedge funds.
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Our Methodology
To compile our list of the 10 best gambling stocks to buy according to hedge funds, we used Finviz and Yahoo stock screeners to find the 25 largest companies in the casino and gambling sectors. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 of 2024. We also included the market capitalization of these companies as of December 3. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Gambling Stocks To Buy According to Hedge Funds
10. International Game Technology PLC (NYSE:IGT)
Number of Hedge Fund Holders: 32
Market Capitalization as of December 3: $4.05 Billion
International Game Technology PLC (NYSE:IGT) is a global leader in lottery solutions. The company has a strong presence in over 100 countries and serves government-run lotteries, gaming operators, and casinos.
International Game Technology PLC (NYSE:IGT) is actively pursuing growth by focusing on its core lottery operations and optimizing its business structure. The company has implemented OPtiMa 3.0, a restructuring initiative aimed at rightsizing its operations following the divestiture of its gaming and digital assets. By realigning general and administrative activities, the company is targeting $40 million in annualized cost savings by the end of 2026. This includes a 3% workforce reduction, optimizing its real estate footprint, and investing in growth areas such as iLottery and instant ticket printing.
International Game Technology PLC’s (NYSE:IGT) lottery business continues to expand globally, with strong performance in Italy and improving trends in key U.S. states like Texas and New York. The company’s focus on innovative game content and advanced technologies has led to the successful launch of new instant games and expanded distribution strategies. Notable contributions to growth include the introduction of a fourth Lotto draw in Italy, improvements in instant ticket performance in multiple markets, and the expansion of its eInstant portfolio, which has shown substantial growth in sales.
9. Boyd Gaming Corporation (NYSE:BYD)
Number of Hedge Fund Holders: 34
Market Capitalization as of December 3: $6.63 Billion
Boyd Gaming Corporation (NYSE:BYD) is a leading diversified operator of casino entertainment in the United States. With 28 properties in 10 states, the company operates casinos, hotels, and entertainment venues, catering to both local and regional markets. Boyd Gaming Corporation (NYSE:BYD) also has a growing presence in online sports betting and iGaming through partnerships with FanDuel and other platforms. The company has invested in property and digital initiatives to enhance customer experiences and expand its market share in the competitive gaming industry.
On October 30, 2024, Boyd Gaming Corporation (NYSE:BYD) broke ground on a $750 million waterfront casino resort in Norfolk, Virginia. Scheduled to open in late 2027, the resort will feature a 200-room hotel, eight dining and beverage outlets, and a casino with 1,500 slot machines and 50 table games. Boyd Gaming Corporation (NYSE:BYD) plans to seek approval from the Virginia Lottery to open a transitional casino facility, with a target opening date in late 2025. The permanent resort, pending final regulatory approvals, is set to debut in late 2027.
