In this article, we will be taking a look at the 10 best sin stocks to invest in 2025.
Sin Stocks: Is Now the Time to Invest?
Sin stocks are shares of companies involved in activities that are often seen as immoral or unethical. Such companies are involved in a range of sectors such as alcohol, tobacco, gambling, and adult entertainment. Some investors believe that sin stocks profit from human weaknesses and vices. While some ethical investors may be looking to avoid such stocks due to ethical concerns, others may see them as strong investment opportunities.
It is important to note that sin stocks can offer unique benefits. By providing goods and services that people always want, companies involved in such sectors often thrive in tough times and even during recessions. Industries that may be seen as immoral or unethical like gambling, alcohol, and tobacco enjoy consistent consumer demand as people usually continue to purchase their products and services even during economic slowdowns. Some investors argue that this makes sin stocks relatively recession-proof.
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In the US, the gambling market is flourishing. Since the Supreme Court struck down a federal law prohibiting sports betting in 2018, gambling and sports betting has grown remarkably. According to the American Gaming Association, sports betting is now legal and operational in 38 states and Washington, D.C. as of January 14, 2025. We could see more markets open up and legalize gambling and sports betting in the near future. Another key trend driving growth in the gambling industry is the surge in popularity of online gambling and iGaming. Online gambling is also attracting young bettors. According to a 2023 survey by the National Collegiate Athletics Association (NCAA), 58% of those aged 18 to 22 had placed at least one wager in 2023.
According to a report by The Business Research Company, the global alcoholic beverages market was estimated to have reached a value of $544.19 billion in 2024. The market is expected to grow at a compound annual growth rate (CAGR) of 5.4% during 2025-2029 to reach a value of $709.13 billion by the end of the forecast period. There is a growing demand for ready-to-drink alcoholic beverages and flavored drinks, especially among younger consumers. The demand for low-alcohol beverages and cocktails made with natural ingredients is also rising as consumers seek healthier options. The 2023 Bacardi Global Consumer Survey found that 44% of respondents in Canada and 43% of younger respondents in the United States plan to consume more cocktails made with natural ingredients in 2024. Additionally, consumers are increasingly willing to pay more for premium and high-quality products. This is another key trend driving growth in the alcoholic beverages industry.
Surveys in the United States have shown that the use of tobacco and marijuana has been fluctuating. Gallup, a global analytics and advisory firm, highlighted in its 2023 update on cigarette smoking that 12% of US adults were smoking cigarettes, slightly up from 11% in 2022. On the other hand, according to combined Gallup data from 2023 and 2024, 15% of US adults reported that they smoked marijuana. Since 2013, the percentage of Americans who report they smoke marijuana has more than doubled. In 2013, when Gallup added the question to its annual Consumption Habits survey for the first time, 7% of US adults reported they smoked marijuana.
Overall, industries like gambling, alcohol, tobacco, and marijuana are experiencing growth, suggesting that now might be a good time to consider investing in sin stocks.
Methodology
To compile our list of the 10 best sin stocks to invest in 2025, we looked for stocks related to gambling, tobacco, alcohol, and other businesses that fall into the category of “unethical” or “sin” stocks. We reviewed our own rankings, financial media reports, and various online resources to compile a list of the best sin stocks. Next, we focused on the top 10 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 10 best sin stocks to invest in 2025 are ranked in ascending order based on the number of hedge funds holding stakes in them as of Q3 2024.
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 Sin Stocks to Invest in 2025
10. Constellation Brands Inc. (NYSE:STZ)
Number of Hedge Fund Holders: 36
Constellation Brands Inc. (NYSE:STZ) is an American multinational producer and marketer of beer, wine, and spirits with operations in the United States, Mexico, New Zealand, and Italy. It is one the largest wine producers in the world and one of the largest beer companies in the US. The company’s wine brands include Kim Crawford, Meiomi, Robert Mondavi, Simi Winery, Ruffino, and The Prisoner Wine Company. Its beer portfolio includes imported brands such as the Corona, Modelo Especial, Victoria, and Pacífico. Constellation Brands Inc. (NYSE:STZ) ranks among the best sin stocks to invest in according to hedge funds.
The company is strategically focused on driving growth through strategic marketing efforts. In the third quarter of fiscal 2025, which ended on November 30, 2024, STZ reported that its beer segment achieved its 59th consecutive quarter of growth in depletion volumes. This strong consumer demand for the beer portfolio was supported by incremental marketing investments that Constellation Brands Inc. (NYSE:STZ) deployed across its core brands in the quarter to address a softening economic environment that began affecting consumer spending.
Additionally, the company is focused on growing its business through capital expansion. Constellation Brands Inc. (NYSE:STZ) announced its plans to invest around $3 billion in capital expenditures from fiscal 2025 to fiscal 2028 to expand production capacity at existing facilities in Mexico and the development of a third brewery site at Veracruz.
9. Churchill Downs Incorporated (NASDAQ:CHDN)
Number of Hedge Fund Holders: 37
Churchill Downs Incorporated (NASDAQ:CHDN) is an American company that is best known for the iconic Kentucky Derby. The company has expanded its operations to include racing entertainment venues, casino gaming properties, and an online wagering company among its portfolio of businesses. As one of the best sin stocks to buy, Churchill Downs Incorporated (NASDAQ:CHDN) operates 29 regional casinos and racing properties across 14 states.
The London Company, an investment management company, has a positive outlook on CHDN. In its Q2 2024 investor letter, the investment management firm pointed out that it views Churchill Downs Incorporated (NASDAQ:CHDN) as a high-quality business led by a management team with a track record of smart capital allocation and a promising pipeline of growth opportunity. The London Company increased its investment in CHDN because of its confidence in the company’s long-term prospects.
The company is actively investing in growth opportunities to enhance its offerings and increase its market share. In October 2024, Churchill Downs Incorporated (NASDAQ:CHDN) opened The Rose Gaming Resort in Dumfries, Virginia. The destination features 1,650 historical racing machines and a 102-room hotel. Additionally, in October 2024, Churchill Downs Incorporated (NASDAQ:CHDN) announced plans to develop a historical racing machine (HRM) entertainment venue in Calvert City, Kentucky. The new facility, with an investment of $40 to $50 million, will include 250 HRMs, a sports bar and a sportsbook, and a simulcast center. The venue is expected to open in early 2026.
8. PENN Entertainment Inc. (NASDAQ:PENN)
Number of Hedge Fund Holders: 37
PENN Entertainment Inc. (NASDAQ:PENN) is an American gambling and casino entertainment company. The company has a diversified portfolio of casinos, racetracks, and online sports betting offerings under well-known brands including Hollywood Casino, L’Auberge, ESPN BET, and theScore BET Sportsbook. PENN Entertainment Inc. (NASDAQ:PENN) operates more than 40 properties in 20 states. PENN ranks among the best sin stocks to buy according to hedge funds.
Leveraging its partnership with ESPN, the company is strategically focused on growing its presence in the online betting market. In September 2024, PENN Entertainment Inc. (NASDAQ:PENN) launched ESPN BET, the official sportsbook of ESPN, in New York. On January 21, the company announced the launch of ESPN BET in Washington, D.C. This move makes ESPN BET now live in 20 jurisdictions in the US.
The company has reported impressive results that reflect the success of its digital strategy. PENN Entertainment Inc. (NASDAQ:PENN) saw a remarkable 127% year-over-year growth in monthly active users in Q3 2024 compared to Q3 2023. Additionally, the company is introducing new features and product enhancements that are expected to enhance customer acquisition and engagement. In November, PENN Entertainment Inc. (NASDAQ:PENN) announced that account linking between ESPN BET and ESPN is now available for customers. This new feature allows fans to seamlessly track upcoming, live, and settled bets within the ESPN app and on ESPN.com.
7. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Holders: 46
MGM Resorts International (NYSE:MGM) is an American multinational gaming and entertainment company. The company has an impressive portfolio of 31 unique hotel and gaming destinations worldwide. MGM Resorts International (NYSE:MGM) owns and operates resorts in the United States and China. It is well-known for its iconic destinations on the Las Vegas Strip including Mandalay Bay, Bellagio, and MGM Grand.
The company is actively seeking expansion opportunities, particularly in Asia. MGM Resorts International (NYSE:MGM) is developing one of the first integrated resorts in Japan. This development project worth around $10 billion aims to transform Osaka into a premier gaming and entertainment destination. The company reported significant development progress and aims to start main construction in the middle of 2025. Additionally, MGM Resorts International (NYSE:MGM) is pursuing growth opportunities in other regions like the UAE and Thailand.
The company is also strategically expanding its presence in the growing online gaming market. MGM Resorts International’s (NYSE:MGM) joint venture, BetMGM, LLC, provides sports betting and online gaming in North America through brands that include BetMGM and partypoker. Additionally, the company’s subsidiary, LV Lion Holding Limited, offers sports betting and online gaming in several markets throughout Europe. During the third quarter of 2024, MGM Resorts International (NYSE:MGM) advanced its international digital strategy by announcing a new venture with Grupo Globo to seek a sports betting and iGaming license in Brazil. The new venture is expected to see the BetMGM brand launch in Brazil in early 2025.
6. Las Vegas Sands Corp. (NYSE:LVS)
Number of Hedge Fund Holders: 47
Las Vegas Sands Corp. (NYSE:LVS) is an American casino and resort company that is headquartered in Las Vegas, Nevada. The company develops and operates casinos and resorts in Macao and Singapore. Its portfolio of properties includes Marina Bay Sands in Singapore and multiple properties in Macao, such as The Venetian Macao, The Londoner Macao, The Parisian Macao, and Sands Macao.
The company has established a strong presence in Macao and Singapore, which are among the world’s largest gaming markets. Las Vegas Sands Corp. (NYSE:LVS) expects the Chinese economy to grow and flourish and believes the Macao market will grow alongside it. The company projects that gross gaming revenues from the Macao market will exceed $30 billion in 2025.
Las Vegas Sands Corp. (NYSE:LVS) is strategically focused on enhancing its properties and expanding its market presence. The company has made significant progress on its refurbishment program at Marina Bay Sands and opened its tower gaming offering in September 2024. The next phase is expected to be completed by the second quarter of 2025. This investment at Marina Bay Sands is expected to support future growth. During the third quarter, Las Vegas Sands Corp. (NYSE:LVS) invested $313 million in Macao and $215 million at Marina Bay Sands in Singapore on construction, development, and maintenance activities.
5. Wynn Resorts Limited (NASDAQ:WYNN)
Number of Hedge Fund Holders: 52
Wynn Resorts Limited (NASDAQ:WYNN) is an American gambling and casino entertainment company that develops and operates high-end hotels and casinos. It owns and operates Wynn Las Vegas, Encore Boston Harbor, Wynn Macau, and Wynn Palace, Cotai. WYNN ranks among the top sin stocks to invest in 2025 according to hedge funds.
The company has a strong presence in some of the world’s most attractive gaming markets. Wynn Resorts Limited (NASDAQ:WYNN) is strategically focused on investing in its existing properties and expanding its operations, particularly with the development of Wynn Al Marjan Island in the United Arab Emirates (UAE). On November 21, 2024, Wynn Resorts Limited (NASDAQ:WYNN) provided an update on the construction progress of Wynn Al Marjan Island. The project is proceeding as planned with 55% of the structural concrete completed.
The first integrated resort in the UAE is currently expected to open in 2027. Wynn Resorts Limited (NASDAQ:WYNN) estimates that the UAE will be a $3 billion to $5 billion gaming market and one of the most exciting new markets in the industry.
4. DraftKings Inc. (NASDAQ:DKNG)
Number of Hedge Fund Holders: 54
DraftKings Inc. (NASDAQ:DKNG) is an American gambling and sports betting company. The company offers sportsbook, daily fantasy sports, regulated gaming, and sports betting services. It partners with major sports leagues like the NFL, NHL, NBA, PGA TOUR, UFC, and NASCAR.
The company’s sportsbook is available in 27 US states and in Ontario, Canada, while its daily fantasy sports product is available in 44 US states, certain Canadian provinces, and the United Kingdom. DraftKings Inc. (NASDAQ:DKNG) ranks among the best sin stocks to buy.
The company has strategically expanded into the lottery industry and aims to grow its existing sportsbook and iGaming operations. On May 22, 2024, DraftKings Inc. (NASDAQ:DKNG) closed its acquisition of Jackpocket, the leading digital lottery app in the US. This move allows the company to enter the growing lottery market while also expanding its sportsbook and iGaming by enhancing customer acquisition capabilities.
In the third quarter of 2024, DraftKings Inc. (NASDAQ:DKNG) reported a revenue of $1.095 billion. This marks a 39% increase from $790 million in Q3 2023. The company also reported a significant increase in Monthly Unique Payers (MUPs), which increased 55% year-over-year to reach 3.6 million. This growth was driven by strong customer retention and acquisition across DraftKings Inc.‘s (NASDAQ:DKNG) sportsbook and iGaming products as well as the impact of the Jackpocket acquisition.
The company is actively planning to grow its business. On November 5, 2024, voters in Missouri approved a ballot initiative that legalized sports betting in the state. DraftKings Inc. (NASDAQ:DKNG) aims to launch its sportsbook in Missouri pending market access, licensure, and regulatory approvals. The company also expects to launch its sportsbook in Puerto Rico pending market access and regulatory approvals.
3. Caesars Entertainment Inc. (NASDAQ:CZR)
Number of Hedge Fund Holders: 67
Caesars Entertainment Inc. (NASDAQ:CZR) is an American gambling and casino entertainment company that ranks among the best sin stocks to buy in 2025. As one of the largest casino entertainment providers, it operates resorts under the Caesars, Harrah’s, Horseshoe, and Eldorado brand names. Caesars Entertainment Inc. (NASDAQ:CZR) offers diversified gaming, entertainment and hospitality amenities, unique destinations, and a comprehensive range of online gaming and sports betting experiences.
Choice Equities Capital Management, a hedge fund manager, shared its thoughts on Caesars Entertainment Inc. (NASDAQ:CZR) in its Q3 2024 investor letter and highlighted that as a strong brand in the casino and entertainment industry, the company is focused on both physical locations and digital growth. With major properties on the Las Vegas strip, new and existing regional casinos in growing markets, and its growing Caesars Sportsbook platform, Caesars Entertainment Inc. (NASDAQ:CZR) has a leadership position in the US casino market. The firm noted that CZR is well-positioned for future growth thanks to the ongoing recovery in leisure and travel post-pandemic combined with the growing popularity of online sports betting and iGaming.
The company is strategically looking to capitalize on the growing gambling market through new projects. On Dec. 17, 2024, Caesars Entertainment Inc. (NASDAQ:CZR) celebrated the grand opening of Caesars Virginia. Previously, on October 22, 2024, Caesars Entertainment Inc. (NASDAQ:CZR) celebrated the completion of its transformation of Harrah’s to Caesars New Orleans, a $435 million capital project.
2. Flutter Entertainment plc (NYSE:FLUT)
Number of Hedge Fund Holders: 69
Flutter Entertainment plc (NYSE:FLUT) is an online sports betting and gambling company. As the parent company of the world’s biggest and most popular sports betting and gaming brands, it owns and operates brands such as FanDuel, Betfair, Sky Betting & Gaming, Sportsbet, PokerStars, Paddy Power, and MaxBet. Flutter Entertainment plc (NYSE:FLUT) is one of the best sin stocks to buy in 2025 according to hedge funds.
In the third quarter of 2024, the company reported that revenue surged by 27% year-over-year to $3.25 billion. The average monthly players also increased by 16%. Notably, Flutter Entertainment plc’s (NYSE:FLUT) US operations saw impressive growth driven by a successful start to the NFL season and new product launches. In the US segment, revenue was up 51% year-over-year and the average monthly players grew 28%.
The company is strategically focused on expanding its market share by investing in leadership positions in international markets. In September 2024, Flutter Entertainment plc (NYSE:FLUT) announced the acquisition of an initial 56% stake in NSX Group, a Brazilian operator. Flutter Entertainment plc (NYSE:FLUT) expects Brazil to fully regulate its online sports betting and iGaming market in 2025. Additionally, in September 2024, Flutter Entertainment plc (NYSE:FLUT) agreed to acquire Snai, one of Italy’s leading omni-channel operators, for EUR 2.3 billion. Italy is one of the largest gambling markets in Europe. The company expects the transaction to conclude by the second quarter of 2025 and it is expected to be immediately accretive to earnings.
1. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 75
Philip Morris International Inc. (NYSE:PM) is an American multinational tobacco company that manufactures and offers cigarettes and smoke-free products in more than 180 markets around the world. PMI is one of the best sin stocks to invest in. The company’s portfolio of cigarette brands includes Marlboro, L&M, and Chesterfield. In 2022, Philip Morris International Inc. (NYSE:PM) acquired Swedish Match to create a strong global leader in smoke-free products, featuring the brands IQOS and ZYN.
Broyhill Asset Management, an investment advisor, noted in its Q3 2024 investor letter that the shares of Philip Morris International Inc. (NYSE:PM) surged by 21% in the third quarter of 2024. The investment management firm also pointed out that the company is focused on transitioning from combustible cigarettes to reduced-risk products. Broyhill Asset Management emphasized the growing popularity of Zyn, which has become very popular and is often out of stock despite increased production efforts by the company.
The company is strategically focused on growing its smoke-free business segment. In Q3 2024, Philip Morris International Inc. (NYSE:PM) reported that the shipment of smoke-free products reached nearly 40 billion units, with the products being available in 92 markets. In the third quarter of 2024, the smoke-free business made up 38% of the company’s total net revenues and 40% of its gross profit.
On January 16, Philip Morris International Inc. (NYSE:PM) announced that the US Food and Drug Administration (FDA) has authorized all ZYN nicotine pouches currently marketed by Swedish Match. This move makes ZYN the first and only authorized nicotine pouch in the US.
Overall, PM ranks first among the 10 best sin stocks to invest in 2025. While we acknowledge the potential of sin stocks, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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