The top sports betting stocks have underperformed so far in 2021, which means investors can grab stocks while they are far from their peak …
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This story originally appeared on MarketBeat
As the sports betting market continues to grow in the United States, there are plenty of opportunities for companies to establish themselves as leaders in this emerging industry in the years to come. Bettors are quickly getting used to doing their business online, new states seemingly voting every month to legalize sports betting, and live sports is set to return in full this year after the pandemic. All of this adds up to a strong bull case for sports betting stocks at this point.
It's worth noting that many of the top sports betting stocks have underperformed so far in 2021, meaning investors can purchase stocks while they're far from their highs. Add to that the fact that the football season will start again in September and could be the perfect catalyst to get these stocks going again. That's why we've put together a quick rundown of 3 sports betting stocks with jackpot potential to help you identify some of the best investment opportunities in the industry. Let's take a deeper look below.
One of the first names that comes to mind when thinking of sports betting is Draftkings, a digital sports entertainment and games company that operates daily fantasy sports, sports betting, and online casino platforms. The stock is trying to regain the 200-day moving average at this point and could be a good buying opportunity ahead of the upcoming football season as so many sports bettors are happy to use the company's platform to spice up their speculations.
Draftkings has made some interesting acquisitions lately, including the latest deal to acquire Golden Nugget Online Gaming in an all-stock deal valued at approximately $ 1.56 billion that will eventually enable the company to move into enter the lucrative sports betting market in Nevada. The company is also currently seeing strong sales growth as Draftkings recently posted sales of $ 298 million.
Next up is Penn National Gaming, another company well positioned to capitalize on the growing sports betting industry. Penn is fascinating because it owns and manages gaming and racing real estate, as well as retail and online sports betting, which means it has a fairly diversified business model. The company should benefit from widespread vaccination efforts as visitor numbers pick up in its physical locations, but investors should be even more interested in what the company is doing to grow its presence in the online sports betting space.
Penn National Gaming launched its online sports betting application called Barstool Sportsbook back in 2020 and aims to launch the application in 10 different states by the end of the year. The company also just announced that it has agreed to acquire Score Media & Gaming for approximately $ 2 billion in cash and stock options, adding a fully integrated betting and media platform to the company's product offering. theScore is the number one sports application in Canada, which means that once the deal is closed, Penn will be expanding its sports betting ecosystem in North America immediately. Finally, Penn National Gaming has an existing loyalty application that has been downloaded hundreds of thousands of times and could lead to future cross-sell opportunities, which definitely makes this a sports betting stock to watch for in the future.
VanEck Vectors Gaming ETF (NASDAQ: BJK)
One of the things investors should understand about the sports betting industry is that it is highly competitive. While the stocks mentioned above certainly stand out as potential market leaders, it might be better to add stocks of the VanEck Vectors Gaming ETF, which offers exposure to companies that generate at least 50% of their income from gaming. This means that you can own a diversified basket of casino, sports betting and gaming services stocks without exposing your portfolio to any single equity risk.
Top positions in this ETF include Flutter Entertainment, Draftkings, Las Vegas Sands, MGM Resorts, Wynn Resorts and Penn National Gaming. Keep in mind that many of the big casino operators like MGM Resorts and Penn National Gaming are taking steps to offer sports betting, which means this ETF could be a big winner with widespread legalization. It's worth noting that this ETF's price performance will be affected by the progress of the economic reopening, but it could still be one of the best ways to take advantage of the growing sports betting market in the future.