We recently published a list of 10 Best Sin Stocks to Invest in 2025. In this article, we are going to take a look at where Caesars Entertainment, Inc. (NASDAQ:CZR) stands against other 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).
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.
Overall, CZR ranks 3rd on our list of 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 CZR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.