You don’t always need a crystal ball to see the future. Some things, like the weather, business success and stock market performance, can be predicted by analysing current trends and factoring in known changes that are coming. With the weather, it can be difficult to accurately predict more than a few days in advance, but in the financial world, forecasts can be made a lot further ahead.
2020 was not kind to many businesses, and it doesn’t look like the situation will improve quickly during 2021. However, there are some industries that have cause for optimism, and the gambling industry is one of those.
Past Performance
The past performance of stocks can be a good indicator of how they will fare in the future.
Gambling stocks took a nosedive in the first half of 2020, with land-based enterprises suffering a loss of business. However, online gambling was able to fill in the gap, and as a result, its stocks rose sharply. By the end of the year, the industry posted profits which were in line with beginning of the year predictions, showing its flexibility in dealing with any hiccups along the way.
There was a huge variation in performance among individual companies, depending on how much of their business was based online. For example, Rank Group PLC finished the year nearly 50% down, due to their reliance on their land-based operations with Grosvenor Casinos and Mecca Bingo. However, Gaming Realms PLC, who deal exclusively in mobile content, showed a yearly price gain of more than 100%.
2021 So Far
While it’s still early days, it looks like gambling stocks are still a good bet for 2021, especially those that deal with online gambling. One of the reasons online gambling is experiencing record high stocks is the many reforms currently making their way through state governments all over the US. With online sports betting and various forms of online gambling slowly being legalised, any company operating in the American market is bound to see a huge boom and could be well worth investing in.
Top Performers
It’s only the beginning of the year, but some stocks are already performing better than others.
If you’re looking to invest in online gambling stocks this year, we recommend checking out the current top dogs.
An interesting choice for those who don’t want to limit their options is to invest in the Roundhill Sports Betting & Gaming ETF. This fund includes companies from the UK, US and Australia among its 38 holdings, giving you access to the entire global marketplace. From June to September last year, this ETF paid out returns of nearly 25%, making it a great option to back, even for the short term.
Las Vegas Sands is the trading name of a group of land-based casinos from all over the world. Its name is a misnomer, as only two of the casinos are actually in Las Vegas, with the majority to be found in Macau, China. Understandably the stocks took a hit when profits dropped in 2020, but LVS is still the largest gambling stock in the world. Because the market downturn is a short-term blip and the gambling sector is expected to recover, buying LVS stocks at a lower value could be a great investment opportunity, as they are historically steady performers.
The best online casino stocks at the moment, however, belong to 888 Holdings. Although their stocks are priced high, there’s every indication that they aren’t going to drop any time soon.
The company first became publicly traded in 2008, so there’s a lot of history here, and current market value is well above average; in fact, 2021 has seen 888 Holding’s stocks return to record highs not seen since 2018.
888 Holdings has a finger in every slice of the market, with several extremely successful global betting brands, including separate poker and sports betting sites. The biggest slice, however, is 888 Casino. Their best-in-class game offering and partnership with leading developers such as Playtech has seen this online casino giant go from strength to strength.
Conclusions
Analysts and experts have been watching the performance of the stock market continuously and keeping a close eye on how it responds to changes. While so much of the future is uncertain, there are upcoming events which are widely known, and their impact can be accurately predicted. These include the increasing legalisation of online gambling and sports betting in America, which is widening access to the market and allowing companies to grow their business. The reopening of land-based casinos and the restart of the tourism industry are also big factors that will affect how gambling stocks perform in 2021.
So far it looks as though those who predicted that online gambling stocks would continue to rise have been spot on. The market itself is still growing, and so it’s no surprise that those businesses invested in it are going to grow in value too. Hence why online gambling stocks are top picks for investors this year.
Those wanting to take advantage of a slump in land-based gambling activities could also snap up a bargain, with casino company stocks still low after their 2020 fall. 2021 should see them start to rise again, so what better time to invest that before everyone else jumps on the bandwagon?
