The gambling industry has changed tremendously in the past three decades. Online gambling has skyrocketed while many brick-and-mortar casinos have closed down.
If you’re a stock investor, you need to look at the industry differently. Pay attention to iGaming stocks, especially shares from successful gambling sites. Don’t worry if you’re a beginner stock investor.
In this guide, we’ll talk about everything you should know about online gaming stocks. If you’re in a hurry, here are some great stock options to consider:
- DraftKings—has a 40% market share of America’s online gambling market. The stock option has a $20 billion market cap.
- Flutter Entertainment—owns FanDuel, Points Bet, PokerStars, and Betfair. It is arguably the largest online gambling brand in the world, making it a safe bet for first-time iGaming investors.
- Rush Street Interactive—this is a fast-rising online gambling company. It owns Rivers Casino, which has branches in more than a dozen states.
- Penn National Gaming—owns multiple small and large sports-related companies outside of Las Vegas. It is one of the best-performing stock options in the last few years.
- MGM Resorts International—owns part of BetMGM Live, Mandalay Bay, the Cosmopolitan, Bellagio ARIA, and MGM Resorts.
Investing in iGaming: A Brief Overview
Although online gaming is growing rapidly, it is a diverse sector with many verticals. There’s sports betting, which generates more than $100 billion. Then there’s online casino gaming, which generates revenues worth more than $60 billion.
You can also invest in bingo casinos, online lotteries, Daily Fantasy Sports, and poker apps. Every gambling vertical has its advantages and disadvantages. Before you spend your money, learn more about online gambling.
The people at online-casinos.com can help you learn more about legal online casinos in West Virginia, Delaware, New Jersey, Pennsylvania, and every other state where the industry is legal. Learn how regulation works, the best casinos, and the best ways to make money in gambling.
Conduct Market Research
First things first. Conduct comprehensive research on the online gambling industry. Yes, it is skyrocketing. Yes, it generates billions of dollars. But it also has challenges.
Online gaming is a new industry. Buying stocks from a new sector can be challenging. There’s not enough data to help you determine the safest bets. Additionally, issues like regulatory challenges tend to make iGaming stocks volatile.
A company’s stock could be climbing consistently. However, a new change in the law could plummet its value overnight. Discover the opportunities and challenges in online gaming before you invest your money.
Analyze Potential Stock Picks Thoroughly
Investing shouldn’t be a decision you take lightly. The end goal is to double or triple your money. The only way this happens is if you choose stocks based on data and not emotions.
Examine a company’s financial statements. Does it make profits? If not, is it a company worth supporting? In most cases, it is safer to invest in established, profitable businesses.
Another way to choose gambling stocks is to look at undervalued companies. Look at Rush Street. It is one of the biggest online gambling brands in the US. Yet, it has a small $2bn market cap while its stock costs less than $10.
Beyond finances, consider a company’s management. Good management can elevate a small business from nothing to greatness. Bad management can collapse any business, including billion-dollar casinos.
One way to know a gambling site has great management is to check its latest developments. Is the company planning to explore new markets? Did the casino embrace an innovation, say live casino gaming.
Diversify Your Portfolio
Diversification is one of the golden rules of investing. If you want to make a lot of money in stocks, create a diversified portfolio. Choose established businesses with a history of going up.
More than half of your portfolio should be made up of reliable companies. In the iGaming space, MGM International, Caesars Entertainment, Penn National Gaming, and 888Gambling are safe bets.
MGM and Caesars have been around for decades. They own a ton of land-based casinos, each of which generates revenues through diversified means. Your chances of losing money in these stocks are minimal.
To spice things up, you can combine stocks from old companies with new businesses. New stocks promise a greater growth potential. However, they require patience. They can also be risky, so choose your stocks wisely.
Check Your Emotions
Success in investing has little to do with your intelligence and more to do with your actions. Far too many academically successful people fail at investment because they can’t control their emotions.
Success comes when you can keep a cool head when the market is plummeting. Also, take control your greed when the market is in your favor.
If you can’t control your emotions, you’re doomed to fail. That’s because you’ll likely sell at a loss or change your positions too often. Most people underestimate the power of emotions when investing.
They buy undervalued stocks because they have great potential. Or they invest too much money in one stock. But once its value plunges, they lose patience and sell.
Buy Stocks for Long Term Success
A common mistake among stock investors is that they buy stocks hoping to make profits within weeks. Some people actually buy stocks using money they need urgently. When things don’t work out, they panic.
If you want to succeed with gambling stocks, borrow a leaf from Warren Buffet. The oracle of Berkshire buys stocks to hold for years. Due to this mindset, it doesn’t matter to a stock in the short term. He holds onto his portfolio until his goals are met.
Now, you don’t have to invest a lot of money. Invest what you can afford. Then hold onto your investment for months or years. There’s a big chance that if you hold your portfolio long enough, you will make money.
Keep Records
Investing is like a business. It has ups and downs. Document your investment journey through a notebook. Look at new opportunities. Buy stocks from companies you believe in.
However, record reasons that would make you sell it. Maybe you would sell a stock if its current management changed. Perhaps you can sell half of your portfolio if it doubles in value. Use your records to guide you in decision-making instead of relying on emotions.
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