We recently compiled a list of the 10 Best Casino Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Rush Street Interactive, Inc. (NYSE:RSI) stands against the other best casino stocks.
The casino industry has rebounded strongly from the COVID-19 pandemic, due to pent-up demand from gamblers and visitors returning to popular places such as Las Vegas. Brick-and-mortar casinos make a substantial profit from hotel operations, conventions, and other events in addition to the revenues that they make from slot machines and table games. Casino stocks are categorized as consumer discretionary since tourism and gambling spending are strongly correlated with the overall economic condition. According to Market Research Future, the global casino market is projected to grow from $309.54 billion in 2024 to $511.6 billion by 2032, with a compound annual growth rate (CAGR) of 6.48% over the forecast period (2024-2032). Furthermore, in 2023, the casino market was estimated to be worth $290.7 billion.
Regionally, the Asia Pacific Casino market dominates the industry due to the growing availability of online casinos and the average individual’s income. The North American casino market has the second-largest market share due to the legalization of sports betting and the approval of online gambling in the region. Furthermore, the UK casino market grew at the quickest rate in the European region, while the German casino industry held the largest market share.
Macquarie analyst Chad Beynon recently highlighted the significant market reaction to casino industry earnings even though the results were essentially in line with forecasts. After five years of underperformance, the industry saw double-digit stock increases due to improving sentiment, potential interest rate drops, and solid early-year trends. Although Macau’s recovery is still below pre-pandemic levels, gaming revenue is projected to rise by 8% in 2025, outperforming the U.S. market’s flat-to-2% growth. Chinese New Year activity was consistent rather than volatile, showing a healthy demand trend. By bypassing the costs of licensing and regulations, new event-based contracts may pose a threat to established operators. However, Beynon believes that licensed operators will fight back, as they did against sweepstakes and illegal betting. Investor confidence was strengthened by generally favorable remarks regarding recent trends, even if some companies decided not to provide updates during the quarter. The industry is now seen more favorably by analysts after years of weak performance.
Apart from analysts, there are also billionaire investors who remain bullish on the casino stocks. Ken Fisher’s Fisher Asset Management, with a portfolio worth more than $252 billion, has invested in two renowned casino stocks. In Q4 of 2024, Fisher invested more than $201 million and owned more than 2.3 million shares in a high-end casino and hotel operator in the United States. Fisher’s confidence in the market’s long-term potential is proven by the fact that the stock makes up 0.07% of his portfolio. In the same quarter, Fisher also made an investment of more than $153 million in an American multinational hospitality, sports, and entertainment company.
Meanwhile, in Q4 of 2024, Billionaire Carl Icahn’s Icahn Capital LP, which has a $7.4 billion portfolio, showed its trust in the industry by investing over $82 million in the largest casino-entertainment firm in the United States.
A closeup shot of slot machines and a player nervously waiting for the spin to stop.
Our Methodology
For this article, we scanned Insider Monkey’s Q4 2024 proprietary database of billionaires’ stock holdings and identified casino stocks from the list. These companies are involved in operating casinos, online gaming platforms, sports betting, and resort entertainment. From there, we picked the top 10 stocks with the highest number of billionaires having a stake in them. Where two or more stocks were tied on billionaire sentiment, we used the dollar value of billionaire holdings as a tiebreaker between them.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Rush Street Interactive, Inc. (NYSE:RSI)
Number of Billionaires: 12
Billionaire Holdings: 86,592,100
Rush Street Interactive, Inc. (NYSE:RSI) operates sportsbooks and online casinos in the United States, Canada, Mexico, and South America. Along with its social gaming offerings, its real-money online casinos are particularly well-liked by customers. The stock was up by nearly 70% in the past year, making it among the Best Casino Stocks.
Companies like Rush Street Interactive, Inc. (NYSE:RSI) can expand and contend with the industry titans as more and more states ease their betting laws. The business has maintained its market share despite competition from larger rivals like DraftKings and Flutter Entertainment.
The business ended 2024 with an outstanding quarter, surpassing forecasts for both sales and adjusted EBITDA. Full-year revenue jumped 34% over the previous year. Adjusted EBITDA rose by over 11 times to $92.5 million, showing impressive growth. Online revenue increased by 29% YoY and 54% YoY in North America and Latin America, respectively, displaying exceptionally strong performance. MAUs in Latin America grew 71% to 348,000, while those in North America reached 205,000 (up 28%). Profitability also climbed, with the gross profit margin climbing to 36.5% in Q4, representing a full-year growth of more than 200 basis points.
Looking ahead, Rush Street Interactive, Inc. (NYSE:RSI) has set an optimistic sales target of $1.01 billion to $1.08 billion (a 13% year-over-year growth at the midpoint) and a 35% increase in adjusted EBITDA. Financial stability was further reinforced when it improved its cash position to $229 million with no debt, a $61 million rise for the year.
Overall, RSI ranks 4th on our list of the Best Casino Stocks to Buy According to Billionaires. While we acknowledge the potential for RSI as an investment, 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 RSI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
