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3 Sports-Gambling Stocks To Bet On As Football Season Kicks Off

By Investing.com (Jesse Cohen/Investing.com)Stock MarketsSep 01, 2021 06:01
ca.investing.com/analysis/3-sportsgambling-stocks-to-bet-on-as-football-season-kicks-off-200486580
3 Sports-Gambling Stocks To Bet On As Football Season Kicks Off
By Investing.com (Jesse Cohen/Investing.com)   |  Sep 01, 2021 06:01
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The 2021-2022 NFL and NCAA football seasons are set to kick off in the days ahead, with college football scheduled to begin this Saturday in what has become known as "week zero." Week one of the National Football League season then starts on Thursday, Sept. 9.

PlayUSA estimates $20 billion in wagers will be placed on the upcoming football season, split as $12 billion for NFL games and $8 billion for NCAA football games. That would nearly triple the $7.5 billion in bets on football made during the 2020-2021 season. The industry group added that sports-betting companies could see more than $1.5 billion in revenue in the upcoming football season.

Taking that into consideration, the following three sports-betting stocks are likely to be some of the standout winners this fall as we move into football season.

1. DraftKings

  • Market Cap: $23.9 Billion
  • Year-To-Date Performance: +27.3%

DraftKings (NASDAQ:DKNG), which is widely considered the leader in the online sports gambling industry, is expected to be one of the main beneficiaries of the upcoming NFL season.

The Boston, Massachusetts-based sportsbook operator joined FanDuel and Caesars Entertainment (NASDAQ:CZR) earlier this year to become an official sports betting partner of the National Football League.

DraftKings, which agreed to acquire Golden Nugget Online Gaming for $1.56 billion last month, also recently announced a multi-year deal with NFL data provider Genius Sports (NYSE:GENI), adding to a flurry of moves to create new offerings and fuel growth.

DKNG Daily Chart
DKNG Daily Chart

Shares of the Boston, Massachusetts-based sportsbook operator—which went public through a special purpose acquisition company (SPAC) in April 2020—are up 27.3% year-to-date, compared to the S&P 500's 20.4% gain.

DKNG stock ended at $59.29 on Tuesday, roughly 20% below its record high of $74.32 touched in late March. At current levels, DraftKings has a valuation of $23.9 billion, making it the most valuable company in the sports-betting industry.

DraftKings reported a smaller-than-expected loss and booming revenue growth when it released second quarter results in early August, as Americans flocked to its sports-betting platform after more states legalized online sports gambling.

Monthly unique payers (MUPs)—a key metric—surged 281% to 1.1 million, while average revenue per MUP jumped 26% from a year earlier to $80.

The online gambling specialist made clear that it does not expect any slowdown in the months ahead, raising its full-year revenue target to a range of $1.21 billion-to-$1.29 billion, up from prior guidance of $1.05 billion-to-$1.15 billion.

2. MGM Resorts

  • Market Cap: $20.5 Billion
  • Year-To-Date Performance: +35.2%

Any discussion of the upcoming football season and related sports-betting stocks would be incomplete without MGM Resorts International (NYSE:MGM), which is the biggest casino and hotel operator on the Las Vegas Strip.

The Paradise, Nevada-based gambling company, which owns about a dozen properties, including the Bellagio, Mandalay Bay, and MGM Grand, has been busy making moves to bolster its online sports betting offering, launching its BetMGM app in several states in the past year.

In an encouraging development, BetMGM was approved as an official sportsbook operator with the NFL last month, joining other online sports-betting platforms such as DraftKings, FanDuel, and Caesars.

MGM has also signed notable partnerships recently with the NFL’s Detroit Lions and Las Vegas Raiders to become their official sports-betting partner for the upcoming season.

MGM Daily Chart
MGM Daily Chart

MGM shares—which declined 5% in 2020 amid the negative impact of the COVID pandemic on its core business—have bounced back this year, climbing 35% in 2021. MGM stock closed at $42.62 yesterday, within sight of its recent 13-year peak of $45.32 reached in late June, earning it a valuation of $20.5 billion.

The company’s second quarter financial results, released in early August, pointed to bright days ahead for its burgeoning sports-betting business. BetMGM’s revenue jumped to $45.9 million, up a whopping 780% from sales of $5.2 million in the year-ago period.

3. Penn National Gaming

  • Market Cap: $12.7 Billion
  • Year-To-Date Performance: -6.1%

As college and pro football season is about to get underway, Penn National Gaming (NASDAQ:PENN)—which operates 43 casinos and racetracks in 20 states across the country—is well positioned to capitalize on the booming sports-betting craze.

The company made headlines last year when it partnered with Barstool Sports, the popular sports media empire run by high-profile founder Dave Portnoy, to launch its online sports betting app in several states.

Penn also announced recently that it acquired Toronto, Canada-based sports-betting company Score Media and Gaming—more commonly known as theScore—for $2 billion, further strengthening its sports-betting product portfolio. According to a joint press release from the two companies, the deal will create “North America’s leading digital sports content, gaming and technology company.”

PENN Daily Chart
PENN Daily Chart

PENN stock closed at $81.10 yesterday, roughly 43% below its record peak of $142.00 reached in mid-March. At current levels, the Wyomissing, Pennsylvania-based company has a market cap of $12.7 billion.

After seeing its stock surge 238% in 2020, Penn shares are down about 6% in 2021 as investor sentiment cooled on high-growth companies which rallied throughout the COVID-19 pandemic. Despite year-to-date losses, Penn remains one of the best names to own thanks to its emerging status as one of the leading players in the fast-growing online sports gambling market.

Penn smashed expectations for its second quarter earnings and revenue in early August, benefitting from the expansion of legal gambling and online sports-wagering across a growing number of states in the U.S.

3 Sports-Gambling Stocks To Bet On As Football Season Kicks Off
 

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3 Sports-Gambling Stocks To Bet On As Football Season Kicks Off

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