In this article, we will look at the 11 Best Las Vegas Stocks To Buy Now.
The gambling industry is growing throughout the globe, with the United States being one of the fastest-growing markets. According to the American Gaming Association, more American adults participated in some kind of gambling entertainment activities than ever during the past 12 months. The survey found that more than 55% of American adults participated in gambling, with 28% going to a physical casino while 21% placed sports bets.
One of the key findings of the report was regarding gambling becoming more acceptable within the American population. As per the association, 9 out of 10 adults found casino gambling acceptable for themselves and others as well. This is good news for the US economy and casino companies as they will generate substantial revenues from increased acceptability of gambling. The United States commercial gaming revenue increased 8.9% year-over-year to reach $17.63 billion during the quarter. Q2 2024, marked 14th consecutive quarter of growth and was driven by casino expansion in various states of the country, including Illinois, Virginia, and Nebraska.
Sports betting is one of the major contributors to the overall gambling industry. Let’s take a look at some of the recent trends in the sports betting industry.
What’s Happening in the Sports Betting Industry
It’s hard to think about sports without sports betting or gambling. The sports betting and gambling industry in the United States has exploded in the past 6 years since it became legalized in most states across the United States. Currently, 38 states have legalized gambling and the industry generated more than $120 billion in total bets and $11 billion in revenues for 2023 alone.
In one of the recent episodes of CNBC Boardroom’s Game Plan Sports Event, the executives of FanDuel, Fanatics, and Sportradar discussed the new state taxes and betting industry trends. All the executive members on the panel found that betters are more interested in placing wagers on individual players, along with placing real-time bets during the live sports event.
Moreover, the CEO of FanDuel overturned his decision to charge a gaming supertax from its customers after his competitors decided against charging any such tax. This came in a reaction after two US lawmakers introduced a bill to address sports betting at the federal level. In one of our recent articles on 10 Best Casino Stocks To Buy According to Analysts, we discussed how the upcoming taxes are expected to affect the market. Here’s an excerpt from the piece:
Illinois lawmakers are drafting a new budget that includes a sharp increase to the state tax on sports betting operators. On May 28, CNBC’s reporter Contessa Brewer mentioned that operators in Illinois have paid 15% on sports betting since it went live in June 2021. The new tax proposal is expected to increase the tax to a range of 20% to 40% depending on gross receipts, which means that the largest betting operators are expected to be attacked the highest with this increase.
The law is yet to be passed, but if it gets approved it will make Illinois’ highest tax rate the second highest behind New York and New Hampshire. For context, Illinois is the 4th largest state for sports betting and betters wagered more than $1.2 billion in March 2024 alone. Sports betting associations are not happy with the tax proposal. The CEO of one of the largest sports betting operators in the United States mentioned that the burden of this tax is going to shift to the consumers.
There is an upcoming tailwind which is expected to boost the industry further. The football season is back and the NFL is expected to spur a record $35 billion in legal sports betting. On September 3, CNBC reported that the United States will wage $35 billion this NFL season, marking a 30% increase since last year’s National Football League.
Much has changed since the last season. During the year states including Maine, North Carolina, and Vermont have allowed sports betting operations in their jurisdictions. Amidst the upcoming season, sports betting companies are feeling the heated competition and platforms are coming up with new strategies to capture more customers.
The president of FanDuel mentioned that the NFL season is one of the biggest acquisition periods of the year. The platform has partnered with YouTube and rolled out a “Sunday Ticket” offer, where players who bet at least $5 get a 3-week trial period to watch the NFL matches with Sunday Ticket. Moreover, as more than 95% of sports betting is happening online it presents an exciting opportunity for sports betting leaders to enhance their customer base and generate more revenues.
Now let’s look at the 11 best Las Vegas stocks to buy now.
A luxurious casino entrance surrounded by lush landscaping and vibrant lights.
Our Methodology
To compile the list of 11 best Las Vegas Stocks to buy now we used the Finviz screener and ETFs. Using these two sources we first curated a list of 20 casino, gambling, and gaming stocks. Once we had the list, we then ranked these stocks based on the number of hedge funds holders during the second quarter. The list is ranked in ascending order of the number of hedge funds.
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).
11 Best Las Vegas Stocks To Buy Now
11. PENN Entertainment, Inc. (NASDAQ:PENN)
Number of Hedge Fund Holders: 30
PENN Entertainment, Inc. (NASDAQ:PENN) is a sports betting and casino gaming company that operates in 20 states with more than 43 properties. The company has online sports betting licensing for 18 jurisdictions and iCasino operations in 5 jurisdictions. It operates through a portfolio of renowned brands including L’Auberge, theScore Bet Sportsbook and Casino, Hollywood Casino, and ESPN BET.
The business of PENN Entertainment, Inc. (NASDAQ:PENN) is segmented based on the geographical locations it covers and includes Northeast, West, South, and Midwest segments. The company also has an online presence under its Interactive segment.
The overall market landscape of the casino and gambling industry has been challenging with a lot of competition. However, PENN Entertainment, Inc. (NASDAQ:PENN) has an advantage over the market due to its comprehensive mix of services. The company already owns a string of Brick and brick-and-mortar casinos and is now investing in mobile gaming, sportsbooks, and iGaming.
Its digital database within the interactive segment has improved by more than 81% since the launch of ESPN BET in late 2023. Moreover, the company has also significantly grown its monthly active users by more than 138% year-over-year.
On the other hand, the Brick and Mortar Casinos business has continued to be a successful venture for the company. The Hollywood Casino revenue grew 6.5% subsequently and its market share grew more than 89 bps year-over-year. The Hollywood property is not the only contender when it comes to market share growth. The Ohio property also improved its market share by 114 bps during the same time.
Despite an overall slow market environment, PENN Entertainment, Inc. (NASDAQ:PENN) has come up as a strong player in the industry. Looking forward, the growth is expected to continue at an accelerated pace as it is about to launch ESPN Bet in New York as well. New York accounts for around 6% of the total US population and is expected to add more than 10 million monthly active users to its digital database.
Hedge funds have also shown interest in PENN, which was held by 30 hedge funds in Q2 2024, with total stakes amounting to $663.69 million. HG Vora Capital Management is the top shareholder of the company, with a position worth $280.6 million.
Greenlight Capital stated the following regarding PENN Entertainment, Inc. (NASDAQ:PENN) in its first quarter 2024 investor letter:
“We established a new medium-sized position in PENN Entertainment, Inc. (NASDAQ:PENN) at an average price of $22.69 per share, but, for reasons discussed below, the shares fell to $18.21 by quarter-end. s referenced above, we established a medium-sized position in PENN, an operator of regional casinos. PENN’s current enterprise value is just over $4.3 billion, and based on an 8-12x multiple of free cash flow, we value their land-based casinos between $4.3 billion and $7 billion. PENN also competes in online gaming, particularly sports betting, and we believe the market ascribes a substantial negative value to that effort. To be fair, the online segment has a checkered history. In 2020, PENN acquired a minority stake of Barstool Sports, and three years later agreed to purchase the rest, for a grand total of $551 million. That acquisition was a complete failure, and the company wound up abandoning the investment. It also spent $2 billion in 2021 to acquire Score Media and Gaming to establish a better online sports betting platform. Last year, it entered into a deal with ESPN to launch and operate ESPN BET.
Successful sports betting franchises can have substantial value. DraftKings is the leader and is valued at over $20 billion. Through ESPN BET, PENN aspires to achieve top-three status in the industry. Given that the market is ascribing negative value to ESPN BET, it’s fair to say that after the Barstool fiasco, investors have serious doubts about the company’s strategy and management’s competence to execute. Were the market to credit PENN with merely 15% of DraftKings’ value, that segment alone would be worth $20 per share.
PENN launched ESPN BET last November. The launch was largely successful and led them to achieve a top-three user share by adding one million customers in less than two months. This result was much better than expected and enabled PENN to project turning a profit a year earlier than its previous guidance. To accomplish this, the company spent more on upfront marketing to acquire customers than it had indicated. Though we had believed the rationale for increased spending was well understood, the market focused on the higher spend and punished the shares.”
10. Churchill Downs Incorporated (NASDAQ:CHDN)
Number of Hedge Fund Holders: 31
Churchill Downs Incorporated (NASDAQ:CHDN) is an online wagering, racing, and gaming entertainment company, whose popularity is nested in its flagship event called the Kentucky Derby. The Kentucky Derby racetrack owned by the company, hosts one of the longest continuously held annual events, which helps generate generous cash flow and margins for the company.
Churchill Downs Incorporated (NASDAQ:CHDN) operates through three major segments, one is evident as per our description of the company i.e. the Live and Historical Racing. Other segments include TwinSpires and Gaming.
Similar to its Live and Historical Racing segment, the Twinspires segment also contributes greatly to the company’s revenue by operating one of the largest wagering platforms in the United States. The segment contributing around 14% to the overall revenue has grown its adjusted EBITDA by more than 85% since 2018.
For the latest quarter, a strong performance across the board was led by the Live and Historic Racing segment, resulting in 36% revenue growth and 34% earnings growth year-over-year.
Churchill Downs Incorporated (NASDAQ:CHDN) has been growing its business presence through B2B strategic partnerships and acquisitions. It expanded pari-mutuel content and technology services to B2C sports betting platforms and also acquired Exacta, which provides HRM technology to third parties and reduces costs for the company.
Investors have shown confidence in management’s strategy to run the company. It was held by 31 hedge funds in Q2 2024, with total stakes worth $673.51 million. Citadel Investment Group is the top shareholder of the company, with total shares worth $166.8 million.
The London Company Mid Cap Strategy stated the following regarding Churchill Downs Incorporated (NASDAQ:CHDN) in its Q2 2024 investor letter:
“Churchill Downs Incorporated (NASDAQ:CHDN) – CHDN outperformed in 2Q as recent results exceeded expectations, and the 150th Kentucky Derby delivered growth above expectations as well. Additionally, in our view the value creation from recent acquisitions is becoming clearer to the market. We continue to view CHDN as a high-quality business run by a management team with a track record of astute capital allocation and a strong pipeline of opportunities for continued growth.
Increased: Churchill Downs (CHDN) – The increase reflects our confidence in the long-term outlook for the business and our desire to reduce cash in the portfolio.”
9. PlayAGS, Inc. (NYSE:AGS)
Number of Hedge Fund Holders: 31
PlayAGS, Inc. (NYSE:AGS) is one of the best Las Vegas stocks to buy now. It operates as an international designer and supplier of electronic gaming machines and other related casino industry services. The stock was held by 31 hedge funds in Q2 2024, with total positions worth $119.24 million. Renaissance Technologies is the top shareholder of the company with a position worth $20.38 million.
It operates through three main segments EGM, Table Products, and Interactive Games. The product portfolio of the company ranges from a variety of video and slot games to table products including card shufflers, side bets, progressives, and much more. PlayAGS, Inc. (NYSE:AGS) also provides game content to its remote gaming servers where players can bet for real money gaming through their mobile devices.
The EGM segment of the company is leading its revenue. Last quarter recorded an all-time high sales of Global EGM at 1,519 units representing a 36% increase year-over-year. The sales growth sounds even more impressive after the fact that the company has topped 30% increase for consecutive 3 quarters.
Robust sales have led PlayAGS, Inc. (NYSE:AGS) to post the 11th consecutive quarter of double-digit growth, making it an attractive investment opportunity with demonstrated profitability and growth. Q2 2024, revenues were $94.2 million, up 15% year-over-year.
That’s not it, management is constantly at work to improve the product line-up. On August 7, it announced the latest table innovation Bonus Spin Xtreme for Poker Rooms along with an upgraded lineup of slot games. The new product launch is expected to further improve its market share.
8. VICI Properties Inc. (NYSE:VICI)
Number of Hedge Fund Holders: 33
VICI Properties Inc. (NYSE:VICI) is a real estate investment trust (REIT) company that owns rental real estate across the United States. The $35 billion market cap company owns over 127 million square feet and features around 60,300 hotel rooms, with more than 500 restaurants, nightclubs, bars, and sportsbooks.
The stock was held by 33 hedge funds in Q2 2024, with total stakes worth $935.95 million. Citadel Investment Group is the top shareholder, with a position worth $299.2 million.
VICI Properties Inc. (NYSE:VICI) makes it to the list of 11 best Las Vegas stocks to buy now because of its unique revenue stream. The company generates most of its revenue from 54 gaming properties that are currently home to some of the major casinos. The company is unique in the sense that while it does not directly own the casinos, however, it continues to benefit from the gambling industry by leasing its properties to casino operators such as MGM Resorts and Caesars.
When it comes to reliability of business and revenue generation VICI Properties Inc. (NYSE:VICI) does not disappoint in that regard as well. Its revenue of $957 million improved 6.5% year-over-year, whereas the net income was up 7.3% during the same time. At the end of the quarter, the balance sheet showed $347.2 million in cash and cash equivalents.
There are several reasons why you should consider investing in VICI Properties Inc. (NYSE:VICI). The first and foremost reason is its strong association with the overall gambling industry, which is currently strong and growing. According to the American Gaming Association reports the gambling revenue for the country during the first quarter of 2024 was at a record-breaking high of $17.67 billion, up 26.1% year-over-year.
Moreover, the company also pays dividends from the income it generates by leasing properties. VICI year-to-date returns were at over 3% and in the past year it has returned over 7%. Lastly, VICI Properties Inc. (NYSE:VICI) enjoys a special position as it does not solely rely on the gambling industry and also owns 39 experiential non-gambling properties plus four golf courses. Though they only represent a chunk of its total revenue but still give the company multiple revenue streams.
7. Boyd Gaming Corporation (NYSE:BYD)
Number of Hedge Fund Holders: 33
Boyd Gaming Corporation (NYSE:BYD) is a casino gaming and hospitality company that operates 28 brick-and-mortar gaming properties across 10 states in America. Its key operations include casinos, restaurants, top-tier hotels, and other hospitality entertainment-related services.
The casino segment includes renowned venues such as Gold Coast Hotel and Casino and Sam’s Town Hotel in Las Vegas and Online Gaming. It also has an online gaming service platform, which provides casino and sports betting games in partnership with FanDuel.
The company reported steady revenue for the second quarter of 2024 with its Las Vegas and Downtown segments showing positive trends. The revenue of $967.5 million was up 5.5% year-over-year and outperformed analysts’ estimates by more than $58 million.
Boyd Gaming Corporation (NYSE:BYD) is based in Nevada. Keith Smith, President and Chief Executive Officer, believes the company has been and will take advantage of increased visitors in Las Vegas and from stabilizing the economy of Nevada. During the earnings call, Keith Smith mentioned over 41 million people visited Las Vegas over the last 12 months which was up 2.6% year-over-year. Moreover, Southern Nevada’s gaming revenues were at a record high of $13.5 billion during the same time. Management believes they are well positioned to capitalize on these tailwinds to ensure long-term growth for the company.
To ensure the success the company opened a new land-based casino at Treasure Chest on June 6, which is already off to a great start with double-digit revenue growth year-over-year. Moreover, the online segment, which was one of the major contributors to the latest quarter revenue is projected to generate $65 million to $70 million in EBITDAR (Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent) during the year.
BYD ended the quarter with $281 million available in cash, indicating prospects of short-term growth. The number of hedge funds holding the stocks has grown from 29 during the first quarter to 33 in Q2 2024. The total positions amounted to $675 million. HG Vora Capital Management is the top shareholder with a position worth $220.4 million.
Baron Discovery Fund made the following comment about Boyd Gaming Corporation (NYSE:BYD) in its Q4 2022 investor letter:
“Shares of U.S. regional casino operator Boyd Gaming Corporation (NYSE:BYD), increased in the fourth quarter due to stable consumer visitation and spending levels despite an uncertain macro environment. The company continued to generate strong free cash flow that it is using to invest into its casinos, pay out dividends, and buy back shares. The company has repurchased 8% of its shares over the past year while paying out a 1% dividend. We believe Boyd can withstand any bumps in the economy given its strong balance sheet and free cash flow. We also don’t think Boyd’s share price reflects its 5% ownership in online bookmaker FanDuel. We continue to be positive on the company’s long-term prospects.”
6. Las Vegas Sands Corp. (NYSE:LVS)
Number of Hedge Fund Holders: 40
Las Vegas Sands Corp. (NYSE:LVS) is an international developer and operator of casino resorts with principal operations in Macao and Singapore. The company entirely focuses on the Asian market and runs 5 casinos in Macao and a Marina Bay Sands resort in Singapore.
Unfortunately, COVID-19 had an adverse effect on the company as the pandemic plunged activity in Macao and the company struggled to maintain its profitability till 2022. However, there is good news for investors of Las Vegas Sands Corp. (NYSE:LVS). The business has started to gain back its traction, especially with gambling and sports betting getting legalized in Asian countries. The company is expected to reap good results as Macao remains one of the world’s biggest gaming markets due to its cultural affinity with China. Moreover, its Marina Bay Sands resort in Singapore is also showing signs of recovery.
Net revenue and net income of Las Vegas Sands Corp. (NYSE:LVS) were up 8.6% and 15% year-over-year. The revenue and income growth was driven by strong revenue generation from both Macao and Singapore operations. The company has still not reached its 2019 potential and is receiving only 61% of its pre-pandemic visitors.
The company’s balance sheet also looks robust. It had unrestricted cash balances of $4.71 billion as of June 2024, indicating its strong cash position in the Asian market. At the end of Q2 2024, 40 hedge funds were bullish on LVS, with their total positions amounting to $2.3 billion. Viking Global is the top shareholder of the company and holds shares worth more than $875.5 million.
5. Wynn Resorts, Limited (NASDAQ:WYNN)
Number of Hedge Fund Holders: 42
Wynn Resorts, Limited (NASDAQ:WYNN) operates luxury hotels and entertainment casinos. While the company has a significant presence in Las Vegas and Boston, its Macau operations are the ones driving significant revenues for the company.
Its famous hotels include the Wynn Palace which offers 14 food and beverage outlets, 107,000 square feet of retail space, and various gaming and entertainment facilities. Wynn Resorts, Limited (NASDAQ:WYNN) reported a record second-quarter Adjusted Property EBITDAR of $572 million indicating that it has finally gained back its lost momentum during the pandemic. The EBITDAR was up almost 9% year-over-year on the back of strong performance across all properties.
Macau operations witnessed significant improvement. Operating revenues from Wynn Palace increased by $79.7 million as compared to the second quarter of last year. Whereas, the operating revenues from Wynn Macau improved by $35.7 million during the same time.
While the investors are still praising the company for its comeback in Macau, management is eyeing the UAE market as well. Wynn Resorts, Limited (NASDAQ:WYNN) continues to focus on growth and is constructing Wynn Al Marjan Island in the UAE at a rapid speed. It plans to develop a resort with more than 1,500 rooms in the UAE, similar to the size of Encore Boston Harbor, which delivered operating revenue of $212.6 million for the second quarter of 2024.
Wynn Resorts, Limited (NASDAQ:WYNN) is one of the best Las Vegas stocks to buy now. It was held by 42 hedge funds in Q2 2024, with total positions worth $1.02 billion. Alkeon Capital Management was the company’s leading stakeholder in Q2, with a position worth $$259.5 million.
Baron Real Estate Fund featured stocks such as Wynn Resorts, Limited (NASDAQ:WYNN) in the fourth quarter 2023 investor letter. Headquartered in Las Vegas, Nevada, Wynn Resorts, Limited (NASDAQ:WYNN) designs, develops and operates destination casino resorts. On January 22, 2024, Wynn Resorts, Limited (NASDAQ:WYNN) stock closed at $92.07 per share. One-month return of Wynn Resorts, Limited (NASDAQ:WYNN) was 1.82%, and its shares lost 8.20% of their value over the last 52 weeks. Wynn Resorts, Limited (NASDAQ:WYNN) has a market capitalization of $10.399 billion.
Baron Real Estate Fund stated the following regarding Wynn Resorts, Limited (NASDAQ:WYNN) in its fourth quarter 2023 investor letter:
“The shares of Wynn Resorts, Limited (NASDAQ:WYNN), an owner and operator of hotels and casino resorts, declined modestly in the most recent quarter, in part due to concerns about economic weakness in China.
We remain optimistic about the multi-year prospects for the company. We believe the ongoing re-emergence of business activity in Macau will drive additional shareholder value. If cash flow returns to the level achieved in 2019 prior to COVID-19, we believe Wynn’s shares will increase 30% to 50% higher than where they have recently traded.
We believe additional drivers for future value creation beyond a re-emergence in Macau business activity include: (i) our expectation for long-term growth opportunities in the company’s U.S.-centric markets of Las Vegas and Boston, including an expansion of Wynn’s Encore Boston Harbor resort; (ii) Wynn’s plans to develop an integrated resort in the United Arab Emirates with 1,500 hotel rooms and a casino that is similar in size to that of Encore Boston Harbor; (iii) opportunities to improve cash-flow margins by rightsizing labor and achieving lower staff costs in Macau; (iv) the possibility that Wynn is granted a New York casino license; and (v) an expansion in the company’s valuation multiple to levels achieved prior to the pandemic.”
4. MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Holders: 44
MGM Resorts International (NYSE:MGM) is an international holding company. Through its subsidiaries, the company operates as a global leader in the gaming and entertainment industry. It has three major segments, namely MGM Resorts, BET MGM, and MGM International Digital.
It is one of the best Lag Vegas stocks to buy now. MGM was held by 44 hedge funds during the second quarter, with total stakes worth $1.25 billion. Corvex Capital is the top shareholder of the company, with a position worth $260.4 million.
The MGM Resorts segment operates 18 properties in the United States and Macau, moreover, the company is also making its entry into Japan and has signed an implementation agreement for an integrated resort in the country. The BET MGM segment is an online betting and iGaming brand that has a presence in 28 American jurisdictions. Lastly, MGM International Digital is another online sports betting platform run by MGM Resorts International (NYSE:MGM) operating in 10 jurisdictions in Europe and Canada.
As the global casino and gaming industry bounces back from the pandemic the company has positioned itself to further strengthen its market share in the industry. Its recent partnership with Marriott International highlights lucrative prospects of growth and improved market share.
MGM Resorts International (NYSE:MGM) has been making significant strides since the start of the year. The first quarter net revenues came in at $4.4 billion, a 13% rise year-over-year on the back of a diverse portfolio of resorts, casinos, and online presence. The second quarter revenues also improved 10% year-over-year, assuring investors with a growth streak.
As an investor of MGM Resorts International (NYSE:MGM) you should be eyeing its partnership with Marriott International. The MGM Collection with Marriott Bonvoy has 16 MGM properties and is enhancing booking capabilities. This partnership is expected to give the company significant visibility and higher recurring revenues per room.
Longleaf Partners Fund stated the following regarding MGM Resorts International (NYSE:MGM) in its fourth quarter 2023 investor letter:
“MGM Resorts International (NYSE:MGM) & Hyatt – Hospitality companies MGM Resorts and Hyatt were both strong performers in the fourth quarter and for the year, outperforming expectations that the post-COVID travel rebound would ease in 2023. Casino and online gaming company MGM saw double-digit revenue growth and strong 2023 bookings in Las Vegas in the first half, which moderated in the second half but remained solid. A cybersecurity attack negatively impacted 3Q results, but MGM does not expect the $100 million hit to have a material effect on its financial condition and operational results for the year. MGM bought back discounted shares at a 15% annualized rate and authorized another $2 billion buyback in 4Q, which represents another 15% of the company.”
3. Flutter Entertainment plc (NYSE:FLUT)
Number of Hedge Fund Holders: 53
Flutter Entertainment plc (NYSE:FLUT) is the maker and operator of the famous sports betting platform FanDuel. It Operates as an online sports betting and iGaming operator with divisions expanding to the United States, United Kingdom, Ireland, Australia, and Internationally.
FanDuel is one of the most renowned sports betting platforms in all the above-mentioned divisions. The platform allows users to place sports bets, play casino games, and enjoy other gambling-related services. The platform enhanced its market share by 40% during the second quarter in the United States. Flutter Entertainment plc (NYSE:FLUT) has reached more than 14.3 million monthly active users, which is a 17% increase from the same quarter the previous year.
FanDuel is not an online platform under the ownership of Flutter Entertainment plc (NYSE:FLUT). It also operates other gambling sites such as Sportsbet, Sky Betting, and Betfair. Financially speaking, the company has been riding the success wave from its platforms. The revenue of $3.2 billion increased 20% year-over-year.
The popularity of its online brands provides it with a solid competitive edge over its competitors. Management believes that the total addressable market will reach $40 billion by the end of 2023 and the market share of Flutter Entertainment plc (NYSE:FLUT) will grow with it. It has also raised its earnings guidance and now expects to generate $6.2 billion in revenues and $740 million in adjusted EBITDA.
Similar to its market share institutional investors are also growing their stakes in the company. FLUT was held by 53 hedge funds in the second quarter, up from 21 hedge funds in the previous quarter. The total positions amounted to $1.72 billion.
2. Caesars Entertainment, Inc. (NASDAQ:CZR)
Number of Hedge Fund Holders: 54
Caesars Entertainment, Inc. (NASDAQ:CZR) is a casino entertainment company that has a diversified portfolio of resorts and online platforms. The company operates resorts under various brand names including Caesars, Horseshoe, Eldorado, and Harrah’s.
It is one of the most renowned resort operators on the Las Vegas Strip and is also one of our best Las Vegas Stocks to buy now. The stock was held by 54 hedge funds in Q2 2024, with total stakes worth $1.23 billion. HG Vora Capital Management is the top shareholder with a position worth $131.1 million.
The overall casino market on the Las Vegas strip has been slow since the pandemic, as a result, the financial results for Caesars Entertainment, Inc. (NASDAQ:CZR) were mostly linear to its previous year’s progress. One of the segments that was moving higher for the company during the second quarter was its Digital segment.
While the overall net revenue for the company was very slightly down by 0.1% year-over-year, the Digital segment saw a robust growth of 27.8% during the same time. The digital segment’s net revenues were recorded at $276 million for the quarter.
The same segment was the only contender to improve its adjusted EBITDA over the comparable period last year. Caesars Digital Adjusted EBITDA improved from $11 million to $40 million for the most percent quarter. Tom Reeg the CEO of Caesars Entertainment, Inc. (NASDAQ:CZR) remains optimistic that returning operation trends in Las Vegas will benefit the digital segment further. Moreover, the expected opening of a permanent facility in Danville along with investment in the rebranded Caesars New Orleans property will drive strong results in the future.
Baron Real Estate Fund stated the following regarding Caesars Entertainment, Inc. (NASDAQ:CZR) in its Q2 2024 investor letter:
“In the most recent quarter, we chose to lower the Fund’s large exposure to travel-related real estate companies and exited the Fund’s position in Caesars Entertainment, Inc. (NASDAQ:CZR), the largest casino-entertainment company in the U.S. and one of the world’s most diversified casino-entertainment providers.
We have near-term reservations about a possible moderation in consumer demand for some of Caesars’ properties and believe the move higher in interest rates and a largely quiet transaction market also negatively impact certain highly leveraged companies such as Caesars. We are fans of CEO Tom Reeg and may revisit Caesars for purchase at a later date.”
1. DraftKings Inc. (NYSE:DKNG)
Number of Hedge Fund Holders: 56
DraftKings Inc. (NASDAQ:DKNG) is the best Las Vegas stock to buy now. The stock was held by 56 hedge funds in the second quarter with total stakes worth $2.25 billion. Marshall Wace LLP is the top shareholder, with a position worth $359.20 million The company functions in the digital sports betting and casino industry. It has a wide portfolio of online sports betting games that are commonly used across the United States and Canada.
Its major segments include online sports betting and iGaming. DraftKings Inc.’s (NASDAQ:DKNG) sportsbook is live in more than 27 states in Canada. Moreover, its Daily Fantasy league, an online platform, is now available in more than 44 provinces giving the company significant market reach.
With the recent news of increased tax rates on sports betting the company faced some headwinds and a pressurizing regulatory environment. However, regardless of the pressure, it was still able to increase its customer acquisition by 80% year-over-year.
While the customer acquisition growth rate is impressive, what counts is the customer acquisition cost. Management was able to reduce the cost of acquiring new customers by more than 40% during the most recent quarter.
A growing customer base means skyrocketing revenues. DraftKings Inc. (NASDAQ:DKNG) grew its revenue by 26% year-over-year and has also raised its full-year guidance indicating a 41% increase year-over-year.
To cope with the tax rate hike, management has decided not to take a toll on itself and will be rolling out increased gaming tax for its customers in 4 states next year. Lastly, in terms of earnings and profitability, DraftKings Inc. (NASDAQ:DKNG) has plans to bring its adjusted EBITDA between $900 million to $1 billion by next year.
Alger Spectra Fund stated the following regarding DraftKings Inc. (NASDAQ:DKNG) in its Q2 2024 investor letter:
“DraftKings Inc. (NASDAQ:DKNG) is a digital sports entertainment and gaming firm designed to ignite the passion of sports enthusiasts through a diverse offering that spans daily fantasy, regulated gaming, and digital media. We believe the company’s expertise in product development and customer acquisition, which established it as the market leader in daily fantasy sports (DFS), positions DraftKings to be a key driver in advancing the U.S. sports betting market’s growth. The company reported strong fiscal first quarter results, with revenues beating analyst estimates due to broad-based momentum in customer engagement and acquisition. However, on May 28th, the Illinois Senate passed a new state budget that includes a tiered progressive tax on sportsbook operators, effective July 1, 2024. This new tax ranges from 20% to 40% on gross revenues, a significant increase from the current 15% tax rate. Despite management’s belief that it can mitigate the tax impact by reducing promotions in Illinois, this development negatively affected the company’s share price.”
While we acknowledge the potential of DraftKings Inc. (NASDAQ:DKNG) 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 a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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