Gaming Stocks to Watch in 2022

The gaming and casino industry took some hits during the last quarter of 2021 in the stock market. Most of this was attributed to the spread of the Omicron strain of Covid. The anticpation that we will go back to a period of less social engagement has made some investors leary of the hospitality industry. Keep in mind that the level of gaming online has never been higher. So while the 1st quarter of 2022 will require management adjustments based on restrictions and staffing, the top teams will still retain market share. You can find value by investing in companies that are historically resilient.

Rush Street Interactive: Current price is $16.78. The 52 week high is $26.55 while the low is $9.47. The recent ground breaking of a new property in Portsmouth Virginia and the prospect of expanding into Chicago Illinois are reasons for optimism. RSI has an outstanding reputation and a proven track record with sportsbooks and gaming in several jurisdictions. RSI is the retail market leader in the three most populous states that have legalized retail sports betting – Pennsylvania, Illinois and New York.

Penn National Gaming: Current price is $51.30. The 52 week high is $142.00 while the low is $43.36. Penn just opened a new casino in Morgantown,Virginia.Penn has been working with Barstool Sports on  opening sports bars in Philadelphia and Chicago as they promote the sports betting app.Louisiana is expected to offer additional sports betting licenses in January and Penn is in consideration.

Boyd Gaming Corporation: Current price is $65.39. The 52 week high is $71.00 while the low is $41.12. Boyd recieved 6 Buy reccomendations from a group of respected stock analysts. They project Boyd as having a high range of $88.00 over the next 6 months.

DraftKings:Current Price is $28.46. The 52 week high is $74.38 and the low is $25.80. DraftKings recieved an overwheming consensus to buy from 32 stock analyst. Name recognition has this as a brand that people are familar with when there is a conversation about sports betting. If the stock price goes up by 20% in 2022, you are looking at a price $34.15. If you purchase 100 shares today,your investment would increase in value by $569.00 in 2022.

 

I look at gaming stock as opportunities to invest in companies that have a presence in major markets that cater to tourism and city that have large populations.As more states add sports betting to their gaming offerings,the price and revenue of casino related stocks that have a strong online presence will go up. Do some research and find the stock and company that is right for you. Keep in mind that buying stock is an investment and should be viewed as long term speculation. Have a number in mind to sell any stock that is descending in price and value. 

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Gaming and Entertainment Stocks: Investing in Sports Betting

Many of us have recently recieved stimulus money from the federal government.This is also income tax season. There will be millions of Americans entitled to tax refunds. If you are in a position to speculate on the stock market, the stimulus money and /or the income tax return can jump start that initiative. Looking for reasons and an industry to invest in? Read more!

The economy is slowly returning to Pre Covid levels. Restaurants are expanding their capacity and hours of operations. Casinos are allowing food and beverages to be served in gaming areas. Alcohol has returned to the pit table games. The states are looking to expand revenue options thru gaming.

Sports Betting and online gaming are two popular concepts that have been adopted by as many as 22 states presently.  This is the ideal time to look at investing opportunities in gaming and sports wagering companies. 

I look for stocks based on affordability and profit magin. I research what the price is presently and look at the historical trends of the stock. If a stock is trading at $25 and a year earlier  had a purchase price of $50, I see a potential growth. I will look at the business plans of that company and determine if they are a good buy. I also set a price that I would be content to sell the stock at. If I bought 100 shares at $25, I would be happy to have the stock reach $35 a share. Contrastly, I have a depreciation price where I would sell and cut my losses. If the stock goes under 20 and has never done that in a 3 year period, I will sell and look to start again with another stock.Looking for the hottest deals and best gaming stocks?  continue reading after the video.

Draft Kings: The current price is $48. The median expected price in the next 12 months is $75. It has a high estimate of 105 and a low of 41. Draft Kings made a recent acquisition of VSIN Network. “VSiN creates authentic and credible content that resonates with sports bettors at every level, whether they’re experienced or new to sports betting,” said Jason Robins, DraftKings’ co-founder, CEO and Chairman of the Board. CNN Money grade this stock as a buy.

Penn National Gaming: The current price is $86. The outlook for Penn National is good because they own Barstool Sports. Barstool is presently in 3 states and projecting to be in as many as 10 by the end of the year. The Street's Jim Cramer gave Penn a definite buy on 5/7/21. Jay Snowden,CEO of Penn National Gaming, expess optimism because of Barstool approach to player acquisition and the reopening of the economy.

Rush Street Interactive: RSI rang the opening bell on Wall Street on 1/5/21.The current price is $13. The recent moves by Rush Street are the signs of encouragement. Rush Street was nominated for the Operator of the Year by the EGR Awards for 2021. Then the announcement of Lauren Seiler as Associate Vice President of Investor Relations and Development. She brings expertise in i-gaming,sports wagering, land based operations and finance. BetRivers.com is thriving in Pennsylvania and is postioned in several new jurisdictions. Growth opportunity at the current price.

Several sports and gaming stocks have made major acquisitions. Caesars Entertainment acquired William Hill within the last two weeks.MGM Grand with  it's sports betting app, Bet MGM ,have stated they are in the top 3 in the each of the markets where the platform is available. Fan Duel or Flutter Entertainment is a definite watch because of the name recognition of the brand. PointsBet has extended into a partnership with Penn National that will include 7 states. 

There are several prominent companies that are not mentioned. You should take time to research the gaming ,sports betting and i gaming industries to find the best buy for your buck. There is a synergy between the three that offers value to the stock holder. I hold shares of several of the companies mentioned in this post.

Follow me on Twitter where I discuss #sportsbetting and #gaming entertainment.  Check out my articles in Bettors Insider and in the January edition of Igaming player. 

Sports Wagering and Business This Week

This will keep you current with the industry. These post will include trends about the sports betting market and information about what state is planning to offer it next. This will be a winning situation for a sophisticated operator and his constituents.

Penn National Gaming grabbed the headlines with the announcement of their deal with multiple platform providers for sports betting. They signed agreements with Kambi,DraftKings,PointsBet,The Score and the Stars Group. This is monumental because of the variety that Penn can offer. They can appeal and be competitive with all of the major players with online gaming and sports betting apps.

The Pennsylvania Gaming Control Board released numbers for Table Games play for the month of June. There was a significant drop in play from the previous year. If you go to this link, you will see which casinos showed a slight decline. I see the direct correlation with the sports betting product that they have in the brick and mortar property. SugarHouse Casino offered the online experience and did extremely well.

In Washington DC, at least 3 bars are looking at allowing sports betting in their establishments this fall.They include Duffy's Irish Pub, Wet Dog Tavern and The Brig. According to the NBC Washington post by Mark Segraves, each of these venues have submitted applications to the Alcohol Beverage Regulation Administration to add sports wagering to their liquor licenses. As other businesses express interest, they will be included in this group.

In Denver, N3rd Street Gamers partnered with Kellogg Co. to promote esports. Kellogg's will sponsor an Overwatch video tournament hrough it's Cheez-It Grooves snack product. This event will take place in October. N3rd Street Gamers has a location in Colorado. 

If you want me in real time you can follow me on Twitter, Facebook, Pinterest and Instagram for updates! You can also see my post on Bettors Insider , the Delaware Valley's top site for sports betting and gambling.

Interview with Chris Sheffield: Penn National Gaming

Mr. Chris Sheffield has been Senior Vice President and Managing Director of Interactive Gaming at Penn National Gaming Inc. since January 2015. Mr. Sheffield is responsible for setting the Company’s strategy as it prepares for the launch of online gaming initiatives across its portfolio at Penn National Gaming.

1). What is your role at Penn National Gaming?  What did you do prior to this position?

"My role is Managing Director / Senior Vice President i-Gaming at Penn which is a new role created this year .  Previously I was managing Director of digital for Betfred in the UK who are a very large betting and gaming business which generates over $ 15 Bn in revenue per year from retail and online operations.  Prior to Betfred, I had an entrepreneurial career and most notably developed Million-2-1 into the largest mobile gambling business in the UK which was eventually acquired by International game Technology (IGT)."

2). Tell the readers the things in the I Gaming platform  that you feel could be implemented here?

"The UK is the World’s most advanced online gambling marketplace and every form of gaming and gambling online for real money is legal and regulated.  This creates a huge amount of tax revenue for Government,  tens of thousands of jobs,  consumer protection for players and drives innovation as operators race to deliver the next great product.  Sports betting is also legal via all channels,  and nowadays in the UK mobile and betting “In Play” as the action happens is the most popular betting activity with $ billions wagered every weekend on soccer, horse racing and other sports.  I see no reason why a similar model could not be implemented across North America and consumers here given the chance to wager legally rather than off-shore with all of the protection and additional tax revenues a regulated model would generate."

3). What would work best in the perfect I Gaming regulatory format?  A federal structure or the current state by state initiative.

"From an operator’s standpoint,  of course a federal position would work best as would be one size fits all and a lot easier to support from a single infrastructure.  However,  given land based gaming businesses are regulated state by state, this is more likely the way things will happen with each state being able to determine its own path and regulations."

4). In Europe, what games are the most popular in the I Gaming environment?  What are the demographics of the players?

"In the UK, sports betting is huge but it is quite a low margin and very competitive business.  The most commercial aspect of i-gaming is casino games (slots, roulette, blackjack e.t.c.),  live dealer casino games,  virtual sports, bingo and poker which is currently in decline.  The customer demographic depends very much on the brand and product and typically a sport-book operator would appeal more to the younger male whilst gaming / bingo focused would appeal more to the older female type audience.  However,  mobile gaming now has overtaken the PC and other devices and this is skewing to a younger more tech savvy customer who is able to play games or wager from anywhere."

 5). Online Gaming does have fears associated with it. The two that immediately come to mind are cannibalization of brick and mortar casinos and an up surge of compulsive gambling. Are these concerns valid?

"As can be seen from Europe,  there appears to be very little cannibalization from bricks and mortar to IGaming and the two channels can be used to help customers become more loyal to a single brand and increase lifetime value and wallet share.  This is also being seen in New jersey with operators such as Golden Nugget being able to report a very positive impact on land based customers  visitation and spend since the advent of IGaming in the State."

"I would also point to Europe regards compulsive gambling and again there is no evidence that there is a link between increased gambling problems and new technology.  At the end of the day,  technology allows the implementation of better controls to protect the customer than the land based environment."

6). Fantasy Sports Betting is the talk of the US. What would it take to bring Online Gaming to this level?

"The biggest challenge that igaming faces is that it is not currently legal in most states whilst fantasy sports for the time being is allowedin most states  across the country.  iGaming needs to prove volume and scale in New Jersey which is improving month by month and issues such as banking (high decline rates for transaction) need to be resolved. Once the model is proven I am sure other States will introduce bills to legalize igaming as a way to raise tax revenue, protect the consumer and bring illegal offshore business back to the US."

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Online Gaming News in Pennsylvania

The past three weeks have been similar to  Fast and Furious 7 with all the activity involving online gaming. Pennsylvania has at least two additional bills that are related to internet gambling. One takes on the logistics involving registration and the exclusion of any holders of a Category 3 license. This would deny Valley Forge the opportunity to participate.

 

The new bills are also asking for a tax rate of 54%. This is  the same level that Pa. taxes slot play. This will not work in an online environment. New Jersey is making things work with a rate of 17.5%. That rate has the operators able to market the product and turn a profit. With the rate of 54%, there would not be internet gaming in New Jersey. Delaware taxes online slots at a rate of 43.6 percent and 29.4 percent for other games, including poker. The first $3.75 million per year has a 100 percent tax rate. They are not making any money.

Mark Lipparelli

Mark Lipparelli, Former Chairman of the Nevada Gaming Control Board, told a California House Committee that he felt the proper tax rate would be the high single digits and that any amount higher than the low teens would hurt the growth of regulated online gaming. Promotions are the drivers of internet wagering. They are limited when the profit margin is minimal. A rate of 12 to 15% is suitable. It could start at the low end and increase over a 4 year span.

 

I am sure that the compromise phase will come when the bills reach the floors of the House and Senate. Here are my three bullets of what can make this happen successfully and by 2016.

• Remove the registration at the property stipulation. That takes the convenience factor out of it. This also limits the operator to a locals only atmosphere.
• Set up the capacity for compacting agreements with any state that has online gaming. This would increase liquidity in Poker and Slots when tournaments are held. It would also drive more revenue to the participating states.
• Limit the amount of providers to casinos that are currently operating  in this state. They are stakeholders and would maintain the integrity of the online product. Allow at least one partner that is independent of the casino to buy into the platform of shared revenue, provided that partner can pass a review by the Pennsylvania Gaming Control Board. This would increase marketing efforts. 

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