We recently published a list of 10 Best Sports Betting Stocks to Buy Now. In this article, we are going to take a look at where Boyd Gaming Corporation (NYSE:BYD) stands against the other sports betting stocks.
A U.S. Supreme Court decision in 2018 set off a sports betting boom that legalized wagering in 38 states and the District of Columbia. North Carolina legalized sports betting on March 11, and within the first 12 hours of the law’s implementation, the state wagered a remarkable $23.9 million. Of these, 30 states allow online sports betting, so if you’re within state lines, the thrill is only a click away. While most states have a minimum age of 21, a handful allow 18 or older.
Consumers can now bet from anywhere as long as they are physically present in the state due to the growth of online platforms. As a result, Americans legally wagered a record $119.84 billion on sports in 2023, up 27.5% from 2022, per the American Gaming Association’s Commercial Gaming Revenue Tracker, ushering in a new era for sports gambling in the US. Consequently, the sports betting industry’s revenue grew to $10.92 billion, a 44.5% YoY increase from 2022. The expansion was predominantly driven by continuing maturation in most existing markets as well as some new ones, including Massachusetts and Ohio. The trend is expected to continue, and in the second quarter of 2024, American sports wagerers wagered $31.75 billion. Revenue from it was $3.16 billion for the quarter, increasing 35.3% from the previous year.
While the United States is at the top of the Biggest Gambling Countries in the World, there are still 12 states in the US that do not allow legal sports betting, including California, Texas, Idaho, Utah, Minnesota, Missouri, Alabama, Georgia, South Carolina, Oklahoma, Alaska, and Hawaii.
Nonetheless, sports betting is one of the fastest-growing industries in the world. Jane Bokunewicz, director of the Lloyd Levenson Institute at New Jersey’s Stockton University, which studies the gambling industry, points out that legal sports betting could be appealing to people with limited discretionary budgets since it offers a new and inexpensive form of entertainment.
Goldman Sachs Research also states that the U.S. sports betting market is expected to grow significantly and, once it reaches maturity, could reach $45 billion each year. This growth will be prompted by new state openings and a growing share of consumer spending on sports betting, per Ben Andrews, head of leisure and travel research at Goldman Sachs in Europe, where legal sports betting has a longer history.
When it comes to consumer spending on sports betting, gambling interest reflects a sport’s popularity, with NFL football dominating in the United States. In 2023, over 73 million Americans said they planned to bet on the NFL season, which is almost 60% more than the previous season, according to a survey conducted by the American Gaming Association.
Globally, nearly one-third of people worldwide engage in sports betting at some point in their lives, based on the TGM 2022 Global Gambling and Sports Betting Survey. In 2021, 17% of people bet on sports with friends (mainly on football and horse racing), while 35.44% bet on sports, and 20.2% bet online/through applications.
According to Deloitte’s 2024 Sports Industry Outlook, generative AI is projected to dramatically impact sports betting in the next 12-18 months. The way sports fans interact with sports betting will probably undergo a revolution because of innovations in domains like personalized betting experiences, odds calculation, real-time data analysis, and improved prediction models.
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A close-up of a roulette wheel in a luxurious casino.
Number of Hedge Fund Holders: 33
Boyd Gaming Corporation is a gaming corporation that operates 28 land-based casinos in the United States, including establishments in the Midwest, the South, and Las Vegas. The business is divided into four divisions: Midwest & South, Downtown Las Vegas, Las Vegas Locals, and Online. Boyd Gaming participates in the sports betting market through its online division, which offers digital wagering services through Boyd Interactive and Online Sports Betting platforms.
After the COVID-19 pandemic, Boyd was able to successfully boost the company’s margins, which has resulted in the stock trading higher. Recently, in the second quarter of 2024, Boyd Gaming Corp. produced a strong performance, with 5.51% revenue growth YoY and nationwide operations meeting forecasts. The online segment saw solid revenue growth by 52% YoY and EBITDA growth, with higher expectations for the full year mainly because of the solid partnership with FanDuel.
The American gaming and hospitality company owns a 5% strategic stake in FanDuel, a well-known sportsbook brand that Boyd partners with on its casino facilities and has a strong online presence.
CEO Keith Smith states in the Q2 2024 earnings call:
“Our 5% equity interest in FanDuel remains a valuable strategic asset for our company that continues to grow in value as we participate in the ongoing growth of sports betting nationwide.”
Consequently, the company has raised its full-year EBITDAR projections for the online segment from $65 million to $70 million.
Hence, analysts are bullish on the stock and have given it a “Buy” rating. The average 12-month price objective set by the 12 analysts for Boyd Gaming stock is $91, which is a 53.15% increase from the stock’s current price of $59.42.
Parag Vora’s HG Vora Capital Management is the largest shareholder in the company, with 4,000,000 shares worth $220.40 million.
Overall BYD ranks 6th on our list of the best sports betting stocks to buy. While we acknowledge the potential of BYD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BYD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
