The sports betting industry in the U.S. sees sunnier skies coming September 11 when the first Sunday of NFL games kicks off. Football is considered the top performer for wagering, by far.
The industry also hopes some of the sunshine will rub off on its stocks. So far this year, the portfolio has taken a major hit. DraftKings shares fell 35 percent; Flutter Entertainment, the parent of FanDuel, is off 20 percent; MGM and Wynn Resorts each declined some 25 percent; Penn Entertainment has plunged almost 35 percent; and Caesars Entertainment lost half its value this year, according to CNN Business.
Concerns about an economic slowdown haven’t helped. Unabated inflation and a recession on the horizon have led investors to question if gamblers will bet less.
But to some, the growing alarm of too many gambling companies chasing too few potential gamblers made the situation even worse.
“We are in a strong position from a competitive perspective as we approach the beginning of the NFL season,” DraftKings CEO Jason Robins said after the company reported earnings earlier this month. “We remain well-capitalized, ready to enter new markets as they become live, and confident in our ability to compete and win with customers.”
Some investment professionals still prefer the brick-and-mortar casinos, most of which have sportsbooks on site. U.S. tourism will continue to grow now that more people are vaccinated, and Covid-19 fears have started to wane.
“I really like Caesars. Heading into football season there should be a boost for casinos and sports betting,” said Lamar Villere, portfolio manager with Villere & Co., which owns Caesars stock. Caesars operates several casinos in Las Vegas as well as in Reno, Nevada and Atlantic City.
Villere also said that the renovation of a Caesars’ property in New Orleans could help the company. He noted that while parts of China are seeing a new surge in Covid cases, Caesars can benefit from the fact that it does not have a presence in the international gaming mecca of Macau. MGM, Wynn and Las Vegas Sands do have casinos there.
“Caesars is a pure domestic play,” Villere said. “You don’t have to worry about what’s happening with China and Macau.”
