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.
8. Churchill Downs Incorporated (NASDAQ:CHDN)
Number of Hedge Fund Holders: 37
Market Capitalization as of December 3: $10.49 Billion
Churchill Downs Incorporated (NASDAQ:CHDN) is a premier operator of racing, gaming, and online wagering platforms. The company is best known for the Kentucky Derby, one of the most prestigious horse race events, established in 1875. Churchill Downs Incorporated (NASDAQ:CHDN) also owns and operates casino properties and online betting platforms such as TwinSpires along with an online horse racing wagering platform in the U.S.
On November 7, Churchill Downs Incorporated (NASDAQ:CHDN) opened The Rose Gaming Resort in Virginia, featuring 1,650 historical racing machines and a 102-room hotel. Additionally, the company has announced plans for a $40-$50 million historical racing machine (HRM) entertainment venue in Calvert City, Kentucky. The upcoming 23,000-square-foot facility will house 250 HRMs, a sports bar, a sportsbook, and a simulcast center, with an expected opening in early 2026.
On October 23, Churchill Downs Incorporated (NASDAQ:CHDN) reported its third-quarter 2024 results, achieving record Q3 revenue of $628.5 million, an increase from $572.5 million in the same quarter of the previous year. The revenue growth was primarily driven by the Live and Historical Racing and Gaming segments. Alongside record revenue, the company posted a record net income of $65.4 million, up from $61 million in Q3 2023.
7. PENN Entertainment, Inc. (NASDAQ:PENN)
Number of Hedge Fund Holders: 37
Market Capitalization as of December 3: $3.41 Billion
PENN Entertainment, Inc. (NASDAQ:PENN), formerly Penn National Gaming, is a major operator of casinos, racetracks, online gaming platforms, and iCasino offerings in 26 jurisdictions in North America. The company operates well-recognized brands including Hollywood Casino, ESPN BET, L’Auberge, and the Score BET Sportsbook.
PENN Entertainment, Inc. (NASDAQ:PENN) is leveraging its partnership with ESPN, and the ownership of theScore, the top digital sports media brand in Canada, to expand its footprint and grow its customer ecosystem. PENN Entertainment, Inc. (NASDAQ:PENN) is focusing on organic cross-sell opportunities and using its PENN Play customer loyalty program to offer its 31 million members a unique set of rewards and experiences across business channels. The company is also using its in-house game development studio, PENN Game Studios.
On November 19, PENN Game Studios launched a new iCasino game, Multiplayer Blackjack, on its Hollywood Casino online platform in New Jersey. Multiplayer Blackjack creates a social gaming environment, allowing users to create a customized private table to play alongside friends or select from a lobby of existing public tables. This new game is expected to support the company’s growth by offering a unique and engaging experience for players. This will help to build a sense of community and loyalty among players, which can lead to increased player retention and acquisition.
6. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Holders: 46
Market Capitalization as of December 3: $11.40 Billion
MGM Resorts International (NYSE:MGM) is one of the world’s largest casino and hospitality companies, with properties spanning the U.S. and Asia. The company operates casinos, hotels, and entertainment venues, serving high-end and casual gamers alike. MGM Resorts International (NYSE:MGM) has aggressively expanded its BetMGM platform, a joint venture with Entain, into the online sports betting and iGaming markets. MGM Resorts International (NYSE:MGM) has taken strategic initiatives, including asset sales and reinvestments, to streamline operations while capitalizing on the digital gambling boom.
MGM Resorts International (NYSE:MGM) has strengthened its collaboration with Marriott International, achieving significant milestones in their long-term strategic partnership announced in July 2023. On October 21, the two companies revealed plans to bring the W Hotels brand to Las Vegas. The agreement includes 17 MGM resorts with over 40,000 rooms across Las Vegas and other U.S. locations.
Financially, MGM Resorts has improved its position by reducing net debt and increasing free cash flow (FCF), which reached $944 million by Q3. The company’s revenue for the first nine months of fiscal 2024 rose 9%, contributing to record results in Q3 with net revenue of $4.18 billion, a 5% year-over-year increase. This growth was fueled by higher prices and strong occupancy rates. Internationally, MGM China achieved a 14% year-over-year growth in net revenue during Q3 2024, underscoring the strength of its Macau operations.
5. Las Vegas Sands Corp. (NYSE:LVS)
Number of Hedge Fund Holders: 47
Market Capitalization as of December 3: $39.88 Billion
Las Vegas Sands Corp. (NYSE:LVS) is a global leader in integrated resorts and gaming. With properties in Macau and Singapore, the company primarily serves international and VIP customers. Las Vegas Sands Corp.’s (NYSE:LVS) portfolio includes luxury hotels, casinos, and convention centers. Recently, the company has shifted its focus to Asia, divesting its Las Vegas operations to capitalize on higher growth markets. Las Vegas Sands Corp. (NYSE:LVS) is also investing in digital gaming platforms as part of its long-term growth strategy.
The company’s integrated resorts offer a range of amenities, including luxury accommodations, gaming facilities, entertainment options, retail malls, convention and exhibition spaces, celebrity chef restaurants, and more. These properties cater to high-end players with invitation-only clubs, private gaming salons, and premium service levels.
Las Vegas Sands Corp. (NYSE:LVS) is focusing on capturing high-value, high-margin tourism over the long term. Macau continues to be a key market for the company, with its revenue in the region growing by 13% year-over-year in Q3, while masking revenue increased by 14% during the same period. Looking ahead, the company is optimistic about growth in the Chinese economy, which it expects to drive the Macau market further. Las Vegas Sands Corp. (NYSE:LVS) projects gross gaming revenues in Macau to surpass $30 million in 2025.
4. Wynn Resorts, Limited (NASDAQ:WYNN)
Number of Hedge Fund Holders: 52
Market Capitalization as of December 3: $10.56 Billion
Wynn Resorts, Limited (NASDAQ:WYNN) operates luxury casinos and resorts, primarily serving high-net-worth individuals and international clients. Wynn Macau is a subsidiary of Wynn Resorts, Limited (NASDAQ:WYNN) listed on the Hong Kong exchange that manages its Macau operations. The company owns properties in Las Vegas and Macau, which are known for their upscale amenities and gaming experiences.
On October 8, Wynn Resorts, Limited (NASDAQ:WYNN) secured its first commercial gaming operator’s license in the UAE, marking a significant milestone. The company is developing a luxury resort, Wynn Al Marjan Island, in Ras Al Khaimah through a joint venture with Marjan and RAK Hospitality Holding. This venture represents Wynn Resorts, Limited’s (NASDAQ:WYNN) entry into a growing financial hub with an expanding millionaire population.
In Macau, Wynn Macau is enhancing its offerings with innovative food and beverage concepts and unique programs. A major development is its second concession-related project, a destination food hall set to open in 2025. Beyond Macau, Wynn Resorts, Limited (NASDAQ:WYNN) is also exploring opportunities in major cities such as New York and Bangkok.
3. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 54
Market Capitalization as of December 3: $38.69 Billion
DraftKings Inc. (NASDAQ:DKNG) is a leading digital sports entertainment and gaming company, known for its daily fantasy sports platform. The company has become a major player in online sports betting and iGaming by targeting sports fans and bettors through its user-friendly app and partnerships with professional leagues.
In Q3, DraftKings Inc.’s (NASDAQ:DKNG) Monthly Unique Payers (MUPs) grew significantly, rising 55% year-over-year to an average of 3.6 million monthly unique paying customers. This impressive growth was fueled by effective strategies in customer acquisition and retention across the company’s Sportsbook and iGaming offerings. However, the company reduced customer acquisition costs (CAC) by nearly 20%.
DraftKings Inc. (NASDAQ:DKNG) is leveraging innovative product enhancements, such as exclusive NBA markets and expanded parlay offerings, to attract and retain customers. The company is also investing in AI-driven personalization and expanding into new states to capitalize on the growing U.S. online gambling market. DraftKings Inc. (NASDAQ:DKNG) plans to launch its sportsbook in Missouri, once regulatory approvals are finalized.
2. Caesars Entertainment, Inc. (NASDAQ:CZR)
Number of Hedge Fund Holders: 67
Market Capitalization as of December 3: $8.29 Billion
Caesars Entertainment, Inc. (NASDAQ:CZR) is one of the largest gaming and hospitality companies globally, operating casinos, hotels, and online platforms. The company attracts a broad customer base, from casual gamers to high-rollers. Caesars Entertainment, Inc. (NASDAQ:CZR) has aggressively expanded its digital presence through Caesars Sportsbook, an online sports betting game.
Caesars Entertainment (NASDAQ:CZR) is prioritizing high-margin products like parlays and is optimizing operations by leveraging its loyalty program to enhance customer retention and profitability. Parlay is a type of sports bet where a bettor combines multiple individual bets into a single wager. Parlays are a strong contributor and are popular because they offer the potential for higher payouts compared to single bets.
Caesars Entertainment (NASDAQ:CZR) is enhancing its property portfolio with significant investments, including the $435 million redevelopment of Caesars New Orleans and the upcoming opening of its permanent facility in Danville, Virginia. In the digital space, Caesars Entertainment (NASDAQ:CZR) is achieving strong revenue and EBITDA growth by expanding its iCasino and sports betting offerings. The company launched new brands, including the Horseshoe Casino in key states, and is optimizing its app to improve customer engagement and retention. Additionally, Caesars Entertainment (NASDAQ:CZR) is capitalizing on asset sales, such as the World Series of Poker and LINQ Promenade, to reduce debt and allocate capital efficiently.
1. Flutter Entertainment plc (NYSE:FLUT)
Number of Hedge Fund Holders: 69
Market Capitalization as of December 3: $49.49 Billion
Flutter Entertainment plc (NYSE:FLUT) is a global leader in sports betting and gaming. The company owns brands such as FanDuel, Paddy Power, and PokerStars. Flutter Entertainment plc (NYSE:FLUT) serves millions of customers worldwide through its online gaming and retail platforms. In Q3, Flutter Entertainment plc (NYSE:FLUT) had 12.92 million average monthly users, which represents a 16% increase compared to the same quarter in the previous year.
Flutter Entertainment plc (NYSE:FLUT) has invested heavily in the U.S. market, with FanDuel becoming a dominant force in sports betting. Furthermore, the company is also focusing on innovation, customer engagement, and regulatory compliance to drive growth in both established and emerging markets.
The U.S. market remains a pivotal growth driver for Flutter Entertainment plc (NYSE:FLUT). In Q3, the company’s U.S. revenue surged 51%, supported by a 62% increase in sportsbook revenue and a 46% rise in iGaming revenue. Internationally, Flutter Entertainment plc (NYSE:FLUT) continues to expand its footprint, with a revenue growth of 17%, combined with a 29% EBITDA increase in the UK and Ireland and solid growth in Australia. The company has also planned market entries into Alberta, Canada, and Missouri, USA, in 2025 to tap new opportunities and increase market presence. Looking ahead, Flutter Entertainment plc’s (NYSE:FLUT) 2024 guidance reflects confidence in its growth strategy, with an expected $6.15 billion in U.S. revenue and $8.2 billion for its group ex-U.S. markets.
While we acknowledge the potential of Flutter Entertainment plc (NYSE:FLUT) to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FLUT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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