Both brick-and-mortar and online gambling markets are indeed expanding. On the brick-and-mortar side, Japan and New York are adding new casinos, while Texas appears to be moving in that direction. And on the online side, new American states are constantly legalizing betting. Also importantly, gambling has always been and will always be a very popular activity. As a result of these developments, the top and bottom lines of many gambling companies will explode over the longer term. Consequently, long-term investors will make a great deal of money if they buy the right gambling stocks. Here are three of the best names to bet on.
Las Vegas Sands (LVS)
Las Vegas Sands’ (NYSE:LVS) largest shareholder, Miriam Adelson, has agreed to buy a majority stake in the Dallas Mavericks, an NBA team.
The move and the company’s involvement in Texas politics leave the firm very well-positioned to benefit from the legalization of casinos and sports betting in Texas. Indeed, LVS reportedly plans to partner with tech billionaire and former Mavericks owner Mark Cuban on “a Dallas resort casino and arena.”
In December, Rice University political scientist Mark Jones said “the conditions for the passage of casino gambling are better today than any other time.”
Although the measure didn’t pass during the last state legislative session held in the previous year, I think there’s a good chance it will pass during the next session, scheduled for early 2025.
That’s because I’ve heard from sources in Texas politics that pro-gambling interests have been donating a great deal of money to Republican state legislators and legislative candidates in Texas.
MGM (MGM)
MGM (NYSE:MGM) is building a huge casino resort in Osaka, Japan. Although the complex is not slated to be launched until 2029, it’s expected to be extremely popular when it does open. Specifically, the site is slated to draw “nearly 20 million visitors annually.”
Given Japan’s status as a developed, rather wealthy country, 20 million visitors could easily generate annual revenue of $5 billion for MGM or an average of $250 per visitor. That would really move the needle for MGM, whose total top line was $13 billion in 2022.
Meanwhile, MGM is also trying to obtain a casino license in New York. If it receives the license, the firm plans to convert its current facility in Yonkers, which features video lotteries, into a full-scale casino resort. The attractions the firm would add to the site are “live table games, slot machines and a high-limit area.” Additionally, it would create a sports betting area with “a 112-foot wrap-around LED screen, stadium seating, VIP areas and self-serve betting kiosks.”
The site would almost certainly become a huge attraction for the tens of millions of people who live in the New York metropolitan area, which boasts a significant percentage of very wealthy individuals, including those who work on Wall Street. As a result, I think that a New York casino resort would also greatly improve MGM’s financial results.
Meanwhile, the firm’s sports gambling joint venture, BetMGM, greatly benefits from more states’ legalization of sports betting.
Given these points, MGM is certainly one of the best gambling stocks to buy.
DraftKings (DKNG)
Most American states have legalized online sports betting, but some still haven’t moved. Specifically, 38 states have legalized the practice, and 12 have not. Among those 12 are Texas, California and Georgia. Also noteworthy is that DraftKings (NASDAQ:DKNG), one of the leaders of online sports betting in America, is currently only active in 26 states.
Eventually, I believe all states will join the trend, and DKNG will enter all 50 of them, greatly increasing the firm’s top and bottom lines.
Showing how quickly DKNG is already growing as it expands to new states, analysts, on average, expect its top line to jump to $3.69 billion this year from $2.24 billion in 2023.
On the date of publication, Larry Ramer held a long position in MGM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
