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7 of the Best Sports Betting Stocks to Watch

These are some of the top sports betting stocks to watch this year

22 Min Read
Last Updated April 20th 2021

Sports betting had a record year in 2020 and is looking set to continue to reach new record highs as the U.S continues to confirm legalisation and the world begins its slow recovery to re-open once again. So let’s take a look at 7 of the best sports betting stocks to keep your eye on this year. 

Best Sports Betting Stocks to Watch in 2021 

Sports betting is a popular activity for millions across the globe today with it being possible to bet on almost every aspect of a sporting event. 

But it hasn’t always been easy to participate in such an exciting activity within this billion-dollar industry. 

The New Jersey supreme court gave the go ahead in 2018 for sports betting within the U.S to become legalised across various states, pulling back on its Professional and Amateur Sports Act. 

This was a huge step forward for this profitable industry and is now currently finding its feet to strive to become one of the new "hit-making" global industries to be a part of in 2021. 

Prior to the U.S legalising sports betting across the nation in 2018, Nevada was the only U.S state that was legalised to allow such activity under the act and has been attracting many tourists both nationally and internationally to visit the betting capital city of the world that is Las Vegas ever since. 

There is no wonder that the U.S sports betting market has been predicted to reach almost $10 billion by 2025, from where it sits today at approximately $2.5 billion. 

Despite the challenges that Covid-19 sprung across the world the sports betting industry, like many other industries, managed to stay positive and become successful over the year. 

The global restrictions left many to participate in sports betting as individuals were seeking new ways of entertainment, especially as activities picked up mid-late 2020 globally, hand-in-hand with the online sports market making it quicker and simpler for individuals to place bets worldwide. There is no wonder the industry's revenue surged in 2020 globally to $203 billion as sporting events resumed operation despite the Covid-19 pandemic. 

For an industry that is reported to be worth $218.49 billion globally today, and with so many sports betting options to choose from, there is no better time to look to consider or look to invest in this exciting industry. 

Top 7 Best Sports Betting Stocks to Watch in 2021:

  1. Penn National Gaming (PENN) 
  2. GAN (GAN) 
  3. Churchill Downs (CHDN) 
  4. MGM Resorts International (MGM) 
  5. Draftkings (DKNG) 
  6. Roundhill Sports Betting & iGaming ETF (BETZ) 
  7. Caesars Entertainment (CZR) 

 

1. Penn National Gaming (PENN) 

The American organisation Penn National Gaming Inc (PENN) owns and operates casinos and racecourses within the U.S and currently has 41 ownership interests in gaming and racing properties set across 19 states.  

Founded back in 1972 this sports betting stock is classed as one of the old-school stocks that is showing the way how to deliver even in challenging times. 

As the pandemic took center stage in 2020 closing many facilities and seizing entertainment events across the globe, PENN stock naturally took a hit due to lack of operation and closures across various venues and across all 19 states. 

The company confirmed within its Q4 report the impact that the pandemic had on the stock as the company witnessed a decline in revenue to $1,027 million in Q4 down from $1,341 million in Q4 2019. 

But despite this slight downfall the sports betting stock still performed impressively. Adjusted EBITDAR declined by 9% to $256 million from $304 million in 2019, along with the stock currently sitting in a healthy position with its improved balance sheet as Traditional net debt reduced by $1,404 million to $578 million from $1,982 in Q4 2020. The company’s liquidity position also became stronger over the year.  

Then you look at the stocks partnerships with its most recent partnership being with Barstool Sports, a digital media company that offers the latest sports and pop culture news and highlights expressed in various ways via the online website and the Barstool Sports mobile app. 

Having a 36% stake within the Barstools Stock in a deal worth $163 million in 2020, has led the company to witness an increase in demand in Pennsylvania with its creative promotions via the Barstool mobile app following its release last September and witnessed 13.4% in market share. 

To give you a slight indication of what is coming for this stock in 2021, PENN and Barstock Sports introduced the Barstool mobile app in Michigan in January and was reportedly met by an impressive surge in strong demand. Within its first 10 days of launching the app, it saw almost 50 thousand registrations, 26.2 thousand new first time registers and Gross Gaming revenue hit $3.3 million, all within 10 days of operating. 

This launch also included new Barstool- branded content including live content to local casino operators. 

This new avenue that the companies are aiming to go down recently integrated mychoice into the equation, offering exclusive deals and offers to their members within its iCasino product which is poised to reach over 30 million new customers on the mychoice database, as well as new and existing consumers using Barstool. 

Although this partnership is a great addition to PENN stock the company is still trailing below its earnings per share (EPS) highs it gained in 2020 as it stood at $5 per share, to its EPS in December reported at $0.07 per share. 

But Wall Street analysts are being bullish on the stock looking ahead with some analysts forecasting EPS to reach $1.64 in 2021 and potentially reaching a predicted EPS forecast of $2.18 per share by 2024. 

This 49 year old sports betting stock is a strong stock to keep an eye on in 2021 as it continues to regain its once delivered highs and potentially looking to gain more over the coming years as the industry unfolds. 

Penn National Gaming Inc is due to release its First Quarter Results on May 6th 2021.   

2. GAN (GAN) 

Although GAN Ltd (GAN) is a direct sports betting stock, one of its main focuses is that the stock supplies gaming software systems and online gaming content to other leading companies. So in reality, this stock holds the essentials for the front-lining sports betting stocks on the market today enabling them to shine as well as having its hands in the sports betting frontline. 

The stocks collection of products include payments services, customer account management, identity verification and many more essential products to enable smooth operations in the world of online sports betting. 

It was confirmed that 2020 was a great year to expand and set up the stock's foundations due to global challenges. The company added new clients to its database, expanded the stocks top-line and looking ahead, the company have strengthened its positioning for 2021 with strong partnerships that include Penn national and Wynn Resorts, both in 10-year deals with more deals that have taken place over the year and potentially more bubbling in the pipeline. 

That being said, GAN managed to get Full year total revenue up to $35.2 million in 2020, a 17% increase from 2019 with Annual gross operator revenue (GOR) increasing by 73% to $545 million YoY. 

GAN’s strong plans of investing into the future have taken a further leap with the acquisition of the European brand, Coolbet in 2021. The deal was reportedly worth $150 million and is due to hit the market mid-late 2021. 

This stock has all the makings of being a good sporting bet stock to invest in within this developing industry with the company expecting a revenue forecast for Q1 of between $24 - $25 million, with a full year 2021 revenue outlook expected between $100 - $105 million, a revenue increase of almost $70 million YoY. 

With its estimated 190% YoY increase in revenue for 2021 and the stock's strong partnership deals adding to the mix, this leading full-service internet gaming service provider is looking to be a great stock to watch in 2021.

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3. Churchill Downs (CHDN) 

With a market capitalization of $8.5 billion as of 2021, the next sports betting stock to keep on your radar is Churchill Downs Inc (CHDN). 

CHDN stock has its hands in various avenues with its most popular being within racetracks, with CHDN being the most profitable track owner in horse racing history. 

Many may also know the name through the popular Kentucky Derby, an annual horse race that also holds the title of being the oldest horse race within the U.S having first come to the scene in 1875. 

But to more recent times the Louisville company managed to pull in well despite the challenges over the past year. 

The 146th Kentucky Oaks and Derby was able to operate despite the Covid-19 challenges, adding to the company’s earnings. The company’s TwinSpires horse racing business delivered a record net revenue in 2020 of $405 million, an increase of 39% YoY. With a record Adjusted EBITDA of $126.8 million, an increase of 62% YoY.  

As the company managed to remain in a profitable position, it did have to take a slight hit in the bigger image as the stock confirmed a Total net 2020 revenue of $1,054 billion down by 21% YoY. 

Looking to the future for the oldest sports betting stock on the market, Wall Street analysts are looking for this company to hit a predicted forecast revenue of $1.5 billion in 2021 followed by a forecast revenue of $1.7 billion in 2023. The stock has been given an EPS forecast of $7.87 in fiscal 2022 where it was confirmed at $0.83 in 2021, confirming a percentage increase of almost 850%. 

The company is due to release its First Quarter 2021 results on April 21st and is poised to confirm great results from its latest quarter ending on March 31st. 

Zacks Consensus estimates have estimated that the sports betting stock will report a revenue result of approximately $290.55 million in Q1, a 15% increase YoY, with quarterly expected earnings of around $0.56 per share, a change of 1020% YoY. 

This long-standing company doesn’t seem to be showing any signs of slowing as it builds its position firmly ready for a stronger year ahead. Making Churchill Downs a stock to keep your eyes peeled for this year. 

 

4. MGM Resorts International (MGM) 

MGM Resorts International (MGM) has become an iconic brand known globally across the world today, not just for its sports betting capabilities but for its hospitality, entertainment and its iconic hotels including the Bellagio Hotel in Las Vegas and much more. 

The company currently operates in six states spread across the U.S that includes Maryland, Detroit, New Jersey, Mississippi, Massachusetts and its most popular spot Las Vegas. The strong benefits of the stock's geographical collection is that the company benefits from both in-person and online betting infrastructures.  

Of course, the Coronavirus pandemic took center stage and had a huge impact on MGM stock from many different angles, but the stock managed to restructure and add diversity in other avenues including its sports betting app, BetMGM which is currently being enrolled across the U.S states. Michigan is the latest state to be able to access this app making it the second poker app to be launched within this state. 

Secondly, BetMGM became the official sportsbook for the Philadelphia 76ers in late 2020 with more national sporting brands looking to add to the MGM collection across various states in 2021. 

BetMGM also partners up with various other sporting companies including Topgolf being the latest integrated partnership, as the stock looks to introduce Topgolf’s customers to the world of sports betting via BetMGM. 

The stock's financial performance over 2020 took a hit naturally due to the impact that Covid-19 has brought upon the world, resulting in consolidated net revenues decreasing by 60% in 2020 with diluted earnings per share decreasing to $2.02 per share compared to $3.88 per share in 2019. 

This was a direct result of facility closures, limited and managed capacity across all venues and placing a halt on most entertainment events, leaving the stocks new BetMGM segment to bring in the earnings. 

Despite these challenges of 2020, MGM sits on a reasonable balance sheet with Cash and cash equivalents as of December 31st being $5.1 billion and Total liquidity as of 31st December being $8.8 billion. 

Wall Street analysts are expecting a total revenue of $8.3 billion in 2021, an increase of 60% from the figures given in 2019. Additionally, analysts have given a revenue forecast of $12.4 billion for the stock by 2024. This is including the expected revenue return from the stocks BetMGM segment, as it is set to reach just under $400 million in 2021 as it delivered a revenue return of $178 million in 2020. 

The stock is currently trading at $40.26, slightly under its 52-week high of $41.92 whilst analysts have predicted that the stock may see a rise to $45.00 in the coming weeks. 

As the vaccination rollout continues to be the main focus across the globe, MGM facilities will no doubt be one of the first destinations of choice for many. The stock's BetMGM mobile app being a solid focus for the brand in 2021 along with a strong demand within the stocks China segment, leads to confirmation that MGM is looking like it could recover well in 2021 and as the coming years unfold.  

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5. Draftkings (DKNG) 

One sports betting stock on many individuals' minds that is trending is that of Draftkings Inc (DKNG). 

Draftkings Inc has vastly become the most valuable growth stock in recent years as it continues to outperform its competitors alongside the market and continues to exceed expectations. 

The stock currently operates online sports betting in over twelve states within the U.S as of 2021 including the newly approved New York state which is another big positive for the stock. 

The stock is confirming that it is already on to a great start in 2021 as it became an official sports betting partner of the American National Football League (NFL), along with the stock adding an official partnership with UFC being its official sportsbook and daily fantasy partner.

This stock's growth opportunities are proving to be unstoppable as the company looks to add partnerships in all areas including commercial agreements, product and technology agreements and much more adding to this stocks impressive growth capabilities. 

In 2020 DKNG confirmed a revenue of $0.61 billion and has given a 2021 revenue guidance in the range of $900 to $1 billion from its previous guidance forecast of between $750 million to $850 million, reflecting a 40%-55% increase YoY. 

This increase in forecast revenue comes after the stock confirmed that Q4 revenue surged by 146% to $322 million from $131 million in Q4 2019, resulting in an overall 98% increase year-over-year. 

Then look at what analysts are predicting for the stock as they have given a consensus ‘Buy’ rating based on 25 Wall Street analysts predictions. DKNG stock has also been given a one year revenue forecast of $997.3 million a 62% increase YoY with a forecast revenue of $2 billion in 2024, an increase of 225%.  

Even though DKNG stock is currently sitting in an unprofitable position, it doesn't seem long before that could all be turned around. 

As the world slowly opens up and favourable sports continue to operate, this will encourage strong consumer engagement pushing this stock to achieve its predicted forecast results that it is more than capable of reaching in 2021 and beyond. 

6. Roundhill Sports Betting & iGaming ETF (BETZ) 

A safer sports betting option than all on this list is Roundhill Sports Betting & iGaming ETF (BETZ). 

This fund is designed to track the leading Roundhill Sports Betting & iGaming Index that is designed to give investors exposure into the Sports betting & iGaming industries, whilst it is also the first index to operate globally. 

The ETF launched back in 2020 and has approximately 40 holdings within its fund spread across 14 countries including holding some of the best performing sports betting stocks on the market today such as Draftkings Inc, Penn National Gaming Inc, Flutter Entertainment Plc (FLTR) and Caesars Entertainment Inc (CZR), who all account for at least 3% or above of the funds holdings.  

In addition, the fund also holds moderate and less recognisable sports betting stocks that could see new highs in 2021 as the industry evolves. 

The EFT has a current performance over 1-year of 57% from its launch in June 2020 and holds an expense ratio of 0.75%. 

The fund is currently trading near its 52-week high at $32.25 and is looking to be the significantly safer investment option for investors as they explore deeper into this industry.

As this ETF could see a significant rise in value over the year, it's time to keep an eye on this one moving forward. 

7. Caesars Entertainment (CZR) 

Another classic and iconic casino resort that falls into the world of sports betting is Caesars Entertainment Inc (CZR). 

CZR stock has had an impressive run over the year climbing to almost 432% after its fall at the start of the pandemic. But prior to 2020, the stock climbed almost 180% within the past three years confirming just how popular this stock can be for both investors and consumers. 

The world of online sports betting has played a key role for the stock over the year, along with the anticipated date of when the popular Las Vegas strip will once again welcome back consumers with open arms. 

On the stocks online sports betting sector, CZR confirmed that it acquired the leading betting company William Hill in a deal worth $3.7 billion in 2020, guaranteeing CZR stock to have its online betting presence felt globally as well as nationally across the U.S. This move is making CZR a key market contender within the world of online gambling, placing it in contention with Draftkings and MGM as both have been given big revenue forecasts for the coming year. 

Caesars is already underway with the rollout of the joint deal with William Hill and is operational in 16 states across the U.S and counting. Along with the stock announcing its strategic investment in the daily fantasy sports platform, SuperDraft Inc added to the mix. 

According to a recent report CZR has just renewed its partnership deal with the NFL for its third consecutive year running joining the likes of Draftkings and FanDuel in 2021. And holds the title of being the first official casino sponsor within the multi-billion dollar industry.   

The current growth prospects are looking strong for Caesars but the stock does come with some uncertainty and could face strong challenges ahead. 

The stocks balance sheet is highly leveraged leaving a big question mark if the stock can continue to look at expanding in the future, leaving current operations to pull the stock out of its current financial position which could take some time. 

The stock currently holds a debt -to- equity ratio of 6.25 and with confirmed long term debt being $31.35 billion as of December 31st 2020. 

Despite the challenges, analysts are predicting the stock to reach a revenue forecast of $8 billion over the year, an increase of 131% YoY predicting that it will outperform the industry and market averages. But the stock still remains a riskier choice than others on the market, with analysts predicting a loss of -$3.94 EPS in 2021 with a forecast EPS of $1.45 in 2024, from where the stock is confirming an EPS in its Q4 report of -$1.94. 

As Caesars Entertainment Inc looks to strengthen its online sports betting segment and as casinos once again re-open across the world, this iconic gaming company is one to watch closely over as the weeks unfold to see how it will hold up in 2021. 

Overview: Best Sports Betting Stocks to Watch in 2021

As we can see the online betting market is set to ‘Boom’ in the coming years as witnessed in 2020. As legalisation spreads further across the U.S, hand-in-hand with fast-paced technology and as the world starts to re-open back into full swing, this will no doubt be the new beginning of this industry’s rise as predicted. 

In summary, the 7 best sports betting stocks in 2021 all offer a great mix of diversity, strong growth opportunities along with offering good value to investors as these stocks continue to dominate within this sector, along with these stocks having additional avenues to explore adding to their growing income stream. 

If you are a beginner to investing and are looking to enter the stock trading world within this industry, a safer option like Roundhill Sports Betting & iGaming ETF (BETZ) could be the go-to to watch and consider investing in 2021 as the industry develops.  

Additionally, if you are an experienced investor all 7 sports betting stocks on this list are looking like stand out stocks to invest in 2021, but Draftkings (DKNG) is looking to be a cut slightly above the rest for its impressive growth opportunities and good value, leading DKNG to be the sports betting stock pick on the market currently.  

If you are considering investing in sports betting stocks in 2021 it is strongly advised to conduct additional research into your chosen stocks as they do hold their own risk elements. 

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