We recently compiled a list of the 10 Best Gambling Stocks To Buy According to Hedge Funds.In this article, we are going to take a look at where Flutter Entertainment plc (NYSE:FLUT) stands against the other gambling stocks.
According to a report by The Business Research Company, the global gambling market reached a value of approximately $540.3 billion in 2023 and is projected to reach $744.8 billion in 2028, with a CAGR of 6.6%. This growth is expected to be supported by rising disposable incomes, political stability, and increased foreign investments in emerging markets.
Lotteries represented the largest segment in gambling, accounting for 53.9% of the total market. This segment is projected to grow at the fastest CAGR of 8.2% between 2023 and 2028 and is expected to generate $141.4 billion in global annual sales by 2028.
The online gambling market is rapidly gaining popularity. According to Research and Markets, the online gambling market is expected to grow to $153.21 billion by 2029, expanding at a CAGR of 10.44%. The widespread use of mobile phones, the internet, and convenient online payment gateways have made online gambling more accessible. The sports category is on the rise and is fueled by major sports events.
In an interview with CNBC on November 8, Jason Robins, Co-Founder and CEO of DraftKings, shared his insights on the current state of the online sports betting industry. He believes that the industry is at a critical juncture, where more people across the country are becoming aware that they can gamble legally, leading to significant growth. Robins attributes this growth to the increasing number of states that have legalized sports betting.
Robins also highlighted the vast potential for growth, pointing to the American Gaming Association’s prediction of $35 billion in legal wagers during the current NFL season, a 30% increase from last year. He is hopeful that other states, including California, Florida, and Texas, will soon follow suit and legalize sports betting. While acknowledging that the legislative process can be slow, Robins is confident that most states will eventually adopt some form of legal sports betting, paving the way for the industry as a whole to continue its upward trajectory.
As the global gambling market continues to expand at a rapid pace, driven by the growing popularity of online betting and legalization, it’s clear that the industry is on the cusp of significant growth. With that in context, let’s take a look at the 10 best gambling stocks to buy according to hedge funds.
Our Methodology
To compile our list of the 10 best gambling stocks to buy according to hedge funds, we used Finviz and Yahoo stock screeners to find the 25 largest companies in the casino and gambling sectors. We then used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 of 2024. We also included the market capitalization of these companies as of December 3. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Top 5 Countries Where Sports Betting is Popular
A digital kiosk showing the diverse range of sports betting options available.
Number of Hedge Fund Holders: 69
Market Capitalization as of December 3: $49.49 Billion
Flutter Entertainment plc (NYSE:FLUT) is a global leader in sports betting and gaming. The company owns brands such as FanDuel, Paddy Power, and PokerStars. Flutter Entertainment plc (NYSE:FLUT) serves millions of customers worldwide through its online gaming and retail platforms. In Q3, Flutter Entertainment plc (NYSE:FLUT) had 12.92 million average monthly users, which represents a 16% increase compared to the same quarter in the previous year.
Flutter Entertainment plc (NYSE:FLUT) has invested heavily in the U.S. market, with FanDuel becoming a dominant force in sports betting. Furthermore, the company is also focusing on innovation, customer engagement, and regulatory compliance to drive growth in both established and emerging markets.
The U.S. market remains a pivotal growth driver for Flutter Entertainment plc (NYSE:FLUT). In Q3, the company’s U.S. revenue surged 51%, supported by a 62% increase in sportsbook revenue and a 46% rise in iGaming revenue. Internationally, Flutter Entertainment plc (NYSE:FLUT) continues to expand its footprint, with a revenue growth of 17%, combined with a 29% EBITDA increase in the UK and Ireland and solid growth in Australia. The company has also planned market entries into Alberta, Canada, and Missouri, USA, in 2025 to tap new opportunities and increase market presence. Looking ahead, Flutter Entertainment plc’s (NYSE:FLUT) 2024 guidance reflects confidence in its growth strategy, with an expected $6.15 billion in U.S. revenue and $8.2 billion for its group ex-U.S. markets.
Overall FLUT ranks 1st on our list of the best gambling stocks to buy according to hedge funds. While we acknowledge the potential of FLUT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than FLUT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
