We recently published a list of 10 Largest Gambling Stocks of 2024. In this article, we are going to take a look at where Flutter Entertainment plc (NYSE:FLUT) stands against the other largest gambling stocks.
According to The Business Research Company, the global gambling market is expected to grow from $540.3 billion in 2023 to $744.8 billion in 2028, at a compound annual growth rate (CAGR) of 6.6%. Some major catalysts influencing the gambling industry include the legalization of gambling, rapid urbanization, increasing use of social media, and increasing involvement in sports betting applications. Factors that can hurt the growth are growing taxation on casinos and strict government oversight of the gambling industry.
READ ALSO: 8 Best Communication Stocks To Buy According to Analysts and 8 Best Augmented Reality Stocks Under $5 to Buy
Two of the Leading Markets in the Gambling Industry
The gambling industry is evolving with more and more companies advancing in the sports betting arena. By the end of 2023, the gambling and casino industry had started showing signs of growth as strong gambling activity was experienced in Macau. According to the Statistics and Census Service, the tourist count crossed 28 million in Macau in 2023, increasing by 394.9% from 2022. In the U.S., Las Vegas continues to evolve and remain the largest gambling city in the country. According to Condé Nast Traveler, Las Vegas was the sixth most visited city for international visitors to the U.S. in 2023.
According to the hospitality consulting firm HVS, the Las Vegas Casino and Hotel Market hosted nearly 40.8 million visitors in 2023, surpassing the 40 million threshold for the first time since 2019. Between 2015 and 2019, over 42 million visitors traveled to Las Vegas each year before dropping to just over 19 million in 2020 due to the COVID-19 pandemic.
The deep effects of the pandemic are far behind now and tourism is back to normal in Las Vegas. In 2023, the gaming revenue for Clark County was around $13.5 billion, setting a market record for the second straight year. With new avenues and casino hotels, the gambling market is expected to continue its growth momentum.
Americans’ Support for Gambling
The majority of U.S. adults support casino gambling and sports betting. According to the American Gaming Association Survey, over 55% of U.S. citizens participated in some form of gambling in 2023, while more than 28% gambled at a physical casino. In addition, nearly 21% of people took part in sports betting. With increasing acceptance of gambling, 9-in-10 Americans find casino gambling to be acceptable for themselves or others. The gambling confidence among Americans is higher than ever before. Nearly 65% of Americans believe that the gambling industry is committed to supporting responsible gambling and overcoming problem gambling.
The gambling industry continues to thrive and the bullish sentiment remains strong among the investors. Over the 1 year, three of the largest gambling and sports betting ETFs have gained an average of over 27%, as of November 4. Roundhill Sports Betting & iGaming ETF (NYSEARCA:BETZ), Global X Video Games & Esports ETF (NASDAQGM:HERO), and VanEck Video Gaming and eSports ETF (NASDAQGM: ESPO) have soared over 16%, 24%, and 41%, respectively.
Our Methodology
To compile our list of the largest gambling stocks, we simply made a list of the ten most valuable gambling firms in terms of market capitalization that are traded on U.S. stock exchanges, as of November 4. We also mentioned the number of hedge funds that had invested in the stocks during Q2 2024, and the data for hedge fund investors was obtained from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? 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).
Flutter Entertainment plc (NYSE:FLUT)
Market Capitalization: $40.78 Billion
No. of Hedge Fund Investors: 53
Flutter Entertainment plc (NYSE:FLUT) is an online sports betting and iGaming operator with a major presence in the U.S., the U.K., and Australia. The company’s US division offers sports betting, casino, DFS, and horse racing wagering products, mainly online but also provides a small number of retail outlets across the U.S. In the U.K., the company offers sports betting, iGaming, and other products through its Sky Betting & Gaming, Paddy Power, Betfair, and Tombola brands. In Australia, Flutter Entertainment operates its online sports betting products through its Sportsbet brand. The company is mainly famous for its sports betting platform FanDuel, which separates it from its competitors.
The company mainly targets the online sports betting and gaming market, allowing it to penetrate more than 100 global markets. The company’s international division includes PokerStars, Betfair International, Adjarabet and Junglee Games. Flutter Entertainment plc (NYSE:FLUT) shared its 2027 guidance and expects to achieve revenue of $21 billion, growing at a three-year compound annual growth rate (CAGR) of 14%, leading to an Adjusted EBITDA of over $5 billion in 2027.
The company is the industry leader with a revenue of $11.79 billion in 2023, up by 25% year-over-year. Flutter Entertainment plc (NYSE:FLUT) increased its market share by 40% during Q2 in the U.S., while reaching over 14.3 million monthly active users, an increase of 17% from a year ago. With the continued growth momentum, the company’s objective is to invest in organic growth and engage in value-creative mergers and acquisitions. Furthermore, the company’s Board has authorized a share buyback program of up to $5 billion, expected to be completed over the next three to four years. The share buyback program is expected to kick off following its Q3 earnings in November 2024.
Overall, FLUT ranks 1st on our list of largest gambling companies in 2024. While we acknowledge the potential of FLUT as an investment, 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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
