With the floodgates of legal online gambling in the US now open, gaming companies far and wide are rushing to join in. Still in its infancy, the immense growth potential of iGaming and online sports betting in the US has not been lost on investors.
Online gambling stocks have captured the attention of many, from stock market newbies to big-time investment firms. And for good reason. Sports betting and iGaming are some of the fastest growing sectors in recent months and are poised to outpace that growth in the years to come as additional states pass legislation for legal, regulated online gambling.
With federal legislative obstacles no longer in place, an increasing number of states are opting to legalize online gambling options to help boost state coffers. The proliferation of smartphones and cost-effective mobile betting apps is another key market driver, according to an April 2020 Research and Markets report.
The same report forecasted the global online gambling market to reach $127.3 billion by 2027, with a projected CAGR (Compound Annual Growth Rate) of 11.5% from 2020 to 2027. Zion Market Research estimates the online sports betting market will reach $155.49 billion by 2024.
The gambling industry runs on a number of gaming companies. Some, like Penn National, Caesars and Boyd Gaming, started out as regional land-based operators but have adapted to offer online gaming products. Then there are the major online gambling powerhouses like DraftKings and FanDuel. Others, like IGT and Scientific Games, are top online game and software providers integral to online gambling operations.
Many of the biggest online gambling companies have ties to Pennsylvania. Here, we cover the top PA gambling stocks including updated price charts, company information, and how to buy in, which individuals can do by purchasing shares of company stock.
Rush Street Interactive, known for its BetRivers online gambling brand, is the online gaming division of Rush Street Gaming, founded in 2012 by gaming industry veterans Neil Bluhm (Chairman), Greg Carlin (CEO), and Richard Schwartz (President). The Chicago-based company launched its first social gaming site, SugarHouse Casino4Fun, in July 2015. RSI later entered the newly-regulated legal iGaming market in Sept. 2016 when it debuted the PlaySugarHouse.com online casino in New Jersey. Just under two years later, a fully-integrated online sportsbook was added. Rush Street launched the first online sportsbooks in PA with PlaySugarHouse and BetRivers going live in summer 2019.
BetRivers continues to expand its gaming footprint with additional launches in new markets and partnerships with professional sports teams. One such partnership with the Pittsburgh Penguins will result in a BetRivers betting lounge at PPG Paints Arena – what is likely to be the first of many such establishments. In addition to BetRivers online sportsbooks and online casinos, RSI owns a number of regional casinos including the Rivers casinos in Pittsburgh and Philadelphia. It also has retail sportsbooks in a number of states, including New York and Illinois where they were first to market.
RSI is the proud owner of several awards, including 2020 Digital Operator of the Year (Global Gaming Awards) and 2020 Casino Operator of the Year and Customer Service Operator of the Year (EGR North America Awards). The company went public at the end of 2020 under the RSI ticker via special purpose acquisition company (“SPAC”) dMY Technology Group (DMYT).
Boyd Gaming is a well-known regional casino operator with 28 properties across ten states. In Pennsylvania, Boyd owns and operates Valley Forge Casino in King of Prussia, just a short drive from Philadelphia. This regional operator has not let the rush of online gambling pass it by. Boyd Gaming has market access in more than a dozen US states and partners with one of the biggest names in the industry.
The FanDuel-Boyd partnership has resulted in online casino and sports betting sites in a growing number of states. In PA, Boyd’s FanDuel Sportsbook app was one of the first to market where it continues to dominate in terms of market share and revenue. The FanDuel name is part and parcel of many Boyd regional properties, where visitors can place bets in person at retail FanDuel Sportsbooks.
Boyd was founded more than 40 years ago in Las Vegas. Among the executive leadership team are Keith Smith (president and CEO), William S. Boyd (executive chairman), and Marianne Johnson (vice chairman, executive VP and chief diversity officer).
One of the grandfathers of casino gambling in the US, Caesars Entertainment is also one of the most-recognizable names in the space. Caesars has a rich history that dates back to 1937, when Bill Harrah opened Harrah’s Bingo Club in Reno, NV. In 1947, Caesars opened the first Las Vegas strip casino, Flamingo Hotel & Casino. And in 1973, it was the first casino company to go public on the New York Stock Exchange.
Fast forward to the modern era and Caesars runs more than 50 casinos worldwide. Eldorado, already a formidable company in its own right, got its start in 1973 when Donald Carano opened the Eldorado Hotel Casino in Reno. In 2020, Eldorado acquired Caesars in a deal worth $17.3 billion to form the biggest regional gaming company in the country. ERI (Eldorado) stock owners became holders of CZR as the merged entity maintained the popular Caesars brand name.
Also in 2020, Caesars and William Hill struck a deal that saw the former acquire the UK-based sports betting company for $3.7 billion. These two already worked together with William Hill retail sportsbooks in more than ten of Caesars’ casinos, including at Harrah’s Philadelphia, along with William Hill mobile apps in a handful of states.
Caesars has entered several iGaming markets in the US with the Caesars online sportsbook and online casino. It is also the owner of the World Series of Poker brand, known for its flagship WSOP summer series in Vegas as well as the WSOP.com online poker site. WSOP.com first launched in Nevada and continues to enter more states as online poker legislation passes.
The original William Hill got its start in the UK in 1934. As one of the world’s forefront betting and gaming companies with headquarters in London and Leeds, it was listed on the London Stock Exchange in 1993. William Hill launched its US division in 2012, focusing first on retail and mobile operations in Nevada. Its greatest brand presence remains in Nevada where it operates over 110 race and sportsbooks and a mobile betting app.
William Hill US successfully expanded along with sports betting legislation in a number of states, with retail sportsbooks across the country as well as mobile app expansion beginning with New Jersey, Iowa, and Virginia. It has additional mobile presence in partnership with Caesars betting apps. That partnership developed into more in 2020 when they made a deal for Caesars to acquire William Hill for $3.7 billion.
Still trading under the symbol WIMHY, William Hill will merge with CZR stock once their deal closes, expected in H2 2021. William Hill’s CEO is Ulrik Bengtsson, Matt Ashley is CFO, and Joe Asher is the CEO of William Hill US.
A household name in US gambling, DraftKings started out in 2012 as a leader in daily fantasy sports and has since expanded into so much more. It was founded by three friends and co-workers in Massachusetts: Jason Robins (CEO), Paul Liberman (President, Global Technology and Product), and Matt Kalish (President, DraftKings North America). The Boston-based DFS company is now also a big player in sports betting and online casino with DraftKings online sportsbooks and online casinos in a growing number of states, including Pennsylvania.
DraftKings went public on the Nasdaq stock exchange in April 2020 through special acquisition company (SPAC) Diamond Eagle Acquisition Company (DEAC) in a transaction that combined DraftKings with sports betting and iGaming provider SBTech. The deal was valued at $2.7 billion and included moving the state of incorporation of DraftKings Inc. from Delaware to Nevada.
DKNG began trading around $20. DEAC listed in 2019 at $10 a share before announcing in December 2019 it would merge with DraftKings. With its primary focus and revenue in the US, DraftKings serves eight countries.
Flutter Entertainment PLC (formerly known as Paddy Power before it merged with Betfair in 2016) is a UK-based international sports betting and gaming operator that also has DFS, poker, and B2B services. Flutter has both retail and online betting products, and a presence in a number of countries but primarily the UK, Australia, Ireland and the US.
Among a growing portfolio of online brands are big names in the international market like Paddy Power, Betfair, Sportsbet.com.au, Full Tilt, Adjarabet, Sky betting and gaming, Bet Easy, and Oddschecker Global Media. Their primary brands in the US include FanDuel, Fox Bet, TVG, and PokerStars.
Flutter’s company homepage says they employ over 13,000 people across more than 20 offices and over 600 retail sites, and serve over 13 million customers worldwide. Executive leadership consists of Gary McGann (Chairman), Peter Jackson (CEO), and Jonathan Hill (CFO). Flutter is headquartered in Dublin, Ireland and trades as FLTR on the London Stock Exchange. In the U.S., the stock trades “over the counter” as PDYPY.
Penn National began in 1972 as a one-track horse racing company owned by Peter D. Carlino and a group of investors. He bought them out in 1982 and was the sole owner. The company reorganized and went public in 1994 as Penn National Gaming. The IPO was overseen by the founder’s son, Peter M. Carlino, who became CEO, serving into 2013, and also chairman, a role he held until 2019. He remains on the board in a chairman emeritus status and cannot vote, but he is chairman of GLPI, a spin-off company which owns many of Penn’s properties.
Penn National has more than 40 gaming, racing and video gaming terminal locations in 19 jurisdictions. Penn is headquartered in Wyomissing, PA, and has evolved from a pari-mutuel company to a regional slot casino company, best-known under the Hollywood brand. From there, Penn added retail sportsbooks, online casinos, and online sports betting via a 36% interest in Barstool Sports. The Barstool Sportsbook app debuted in PA in Sept. 2020 and was among the first to go live in Michigan in 2021.
$PENN stock went on a wild ride in 2020 seeing a 230% gain with the company’s shift to an online gambling focus. The stock price also got help from the brash and outspoken Barstool Sports founder Dave Portnoy, who has become an influential voice in gambling stocks trading. Penn continues expanding with rollouts of the Barstool app in additional states, with plans for online casino wherever possible. Key execs are Jay Snowden (CEO), Harper Ko (VP, legal officer and secretary), Todd George (VP operations), and David A. Handler (board chairman).
While the company began officially in 1986, its origins trace back to investor Kirk Kerkorian buying the Metro-Goldwyn-Mayer movie studio in 1969 and then opening the MGM Grand Hotel in 1973. The property is now Bally’s Las Vegas. The MGM Grand Reno followed in 1978. In 1979, the company split, one a film company, the other a casino company with two hotels. He sold the casino company in 1985 to Bally Manufacturing, but he kept rights to the MGM Grand name, a subsidiary to Kerkorian’s Tracinda Corporation. It was renamed the following to MGM Grand, Inc. Kerkorian bought the Desert Inn and Sands casinos in February 1988 for $167 million, reselling the Sands to Sheldon Adelson for $110 million in April 1989. Company headquarters moved to las Vegas from Beverly Hills in 1992.
The company became MGM Mirage beginning in 2000, when it merged with Mirage Resorts, changing back to MGM Resorts International in 2010. In 2017 it launched the online casino brand PlayMGM in New Jersey and PlayMGM Sportsbook in Nevada. It has since built a formidable presence in online gambling with BetMGM online casino and sports betting apps in a growing number of states, including Pennsylvania.
Notable properties it owns or managed are: Bellagio, Excalibur, Luxor, Mandalay, The Mirage, New-York-New-York, all in Las Vegas; six casinos in China; Borgata in Atlantic City; MGM Grand in Detroit; MGM Grand in Maryland; and Yonkers Raceway in New York. Top executives include James Murren (chairman and CEO), Bill Hornbuckle (president of global casino marketing) Brian Sandoval (president of global gambling development) and Corey I. Sanders (COO).
Italian gambling company Lottomatica bought US gaming company Gtech in 2006 for $4.5 billion and then changed its own name to Gtech. In 2015 the company bought International Gaming Technology, the largest slot manufacturer in the world and then again changed its name. The company produces gaming technology and is based in London.
Key executives include Marco Sala (CEO, Renato Ascoli (CEO for global gaming), Fabio Cairoli (CEO for global lottery). The company makes gaming machines, gaming content, lottery machines and systems, sport betting channels, machinery and platforms, and digital platforms, products and services. IGT online games are more popular than ever and can be found on most top online casinos in PA and other legal online gambling states.
The company began more than 80 years ago in the pari-mutuel business known as Autotote. Scientific Games, founded in 1973, and the maker of the first secure instant lottery ticket in 1974, was bought by Autotote in 2000 for $308 million. The company was incorporated in 1984. The combined companies became Scientific Games Corporation in 2001.
The Las Vegas-based company has several subsidiaries, including Bally Technologies and WMS Industries. They have gaming, lottery and digital divisions. Key executives are Jaimie Odell (executive chair), Barry Cottle (CEO and director), Michael c. Eklund (CFO, treasurer, secretary), James Sottle (legal officer).
The company began with a single racetrack in Louisville, Kentucky in 1875 with explorer Meriwether Clark instrumental in the founding of the track. The first Kentucky Derby was run that same year. The track reorganized along with other tracks in 1928. And then in 1942 there was another reorganization and the company became named Churchill Downs Incorporated. The company began simulcasting at another Louisville track in 1991.
They began adding casinos and racetracks and now operate 16 in all. In PA, they operate Lady Luck Nemacolin and Presque Isle Downs, both purchased from Eldorado. Churchill Downs has a large presence in brick-and-mortar casino gaming with approximately 11,000 slot machines and video lottery terminals and 200 table games in eight states.
Online, they operate TwinSpires sites, which include online casino, sports wagering and online horse betting. Churchill operates TwinSpires in PA, launched in Michigan in January 2021 and will continue to expand into additional states. Their leadership includes William Cartsanjen (CEO), William Mudd (COO) and Marcia Dall (CFO) and R. Alex Rankin (board chairman).
Mutual funds are a primary way for casual (or serious) investors to get in on an industry without having to manage their own portfolio. One of the more popular mutual funds for online gambling stocks is $BETZ – Roundhill Sports Betting and iGaming ETF.
$BETZ launched in April 2020 in response to the high demand – and high performance – of casino, iGaming and sports betting stocks. Investors who choose to buy a share in this fund get a piece of several different gaming stocks, with experts to manage the portfolio.
The short answer is: Yes. Any profits on online gambling stocks (or any stocks for that matter) are subject to capital gains taxes. Long-term capital gains (on stocks you hold longer than one year) are generally subject to lower tax rates than short-term gains (stocks you hold for one year or less).
The tax rate on short-term gains is equal to your normal tax bracket. Long-term gains may be taxed at 0%, 15% or 20% depending on your taxable income and filing status. Remember to always do your research before investing on any app, and be sure to consult with a tax professional to understand tax and financial implications of investing.
Purchasing shares of online gambling stocks has never been easier. Modern online stock broker sites make it simple for individuals to invest in the stock market without the exorbitant fees of the past. Most trades of stocks and ETFs are free (no commission), though some fees may be associated with options trading, margin trading, or purchasing shares of mutual funds.
We don’t give out advice on trading stocks, just providing resources to make informed decisions. Investing in any single stock comes with potential risks and rewards, as a stock’s price can move up or down based on any number of factors. Do your research, and invest only amounts you are comfortable with.
Almost certainly the number of online gambling stocks will grow. More companies are looking at public listings, and special-purpose acquisition companies (SPACs) have already taken several private online gambling companies public.
Penn National stock saw its highest highs plus an S&P listing in March 2021 before coming back down to earth to close the month.
Yes, Dave Portnoy, it’s a “big deal.” Penn National ($PENN) along with Caesars Entertainment stock will join the S&P 500 index.