The sports betting industry is comprised of companies that provide services and solutions enabling people to make wagers on the outcome of sporting events, such as horse or dog racing, or soccer and football matches. Some companies in the industry operate as sportsbooks, which are bookmakers for sports betting, while other companies provide software and technology platforms allowing other companies to operate as sportsbooks. Many of these companies offer other services, including owning and operating both casinos and online betting services. Some of the biggest names in the industry include DraftKings Inc., Ireland-based Flutter Entertainment PLC., and Caesars Entertainment Inc.
Sports betting has grown significantly in the U.S. since the Supreme Court revoked a federal ban on the activity in 2018. The U.S. prohibitions, which essentially restricted a legal market for wagering on sports to Nevada, had been in place since 1992. Since the lifting of the ban, state governments have been introducing legislation to allow companies to provide legal betting on a broad array of sporting events, both retail and online.
- Sports betting has grown significantly in the U.S. since the Supreme Court revoked a federal ban on the activity in 2018.
- It is still fully illegal in 17 states, and four other states have some form of legislation pending.
- The sports betting industry has underperformed the broader market over the past year.
The sports betting industry, as represented by the Roundhill Sports Betting & iGaming ETF (BETZ), has underperformed the broader market over the past year. BETZ has provided a total return of -34.3% during that period, well below the Russell 1000 Index's return of 13.1%. This market performance figure and all data in the tables below are as of March 18, 2022.
Here are the top three sports betting stocks with the best value, the fastest growth, and the most momentum.
These are the sports betting stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.
|Best Value Sports Betting Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|International Game Technology PLC (IGT)||25.28||5.2||10.8|
|Scientific Games Corp (SGMS)||61.44||5.9||16.5|
|Boyd Gaming Corp. (BYD)||68.13||7.5||16.7|
- International Game Technology PLC.: International Game Technology is a U.K.-based provider of computerized gaming equipment, software, and networks for all channels and segments of the gaming industry, including lotteries, sports betting, and online casinos. On March 1, the company reported results for Q4 and full-year 2021 ended December 31. It posted a net income of $55 million for the quarter on rising revenue, an improvement from the $220 million loss in the same quarter a year earlier. For full-year 2021, performance also swung to $670 million in net income from a giant net loss a year earlier. Revenue was driven by strong growth across its business segments.
- Scientific Games Corp.: Scientific Games develops technology-based products and services and associated engaging content for customers ranging from backend systems to retail products. These products are focused on the gaming, digital, social, and lottery gaming industries. On March 1, the company announced it will rebrand itself as Light & Wonder Inc. The move comes in the wake of divesting its lottery and sports-betting operations to focus on content for casinos and online gambling. The company said the legal name change will be complete this spring. At that time, the company will start trading under a new stock ticker, LNW.
- Boyd Gaming Corp.: Boyd Gaming owns and operates gaming properties throughout the U.S. It also operates entertainment, restaurants, shopping, and recreational facilities on its properties.
These are the top sports betting stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.
|Fastest-Growing Sports Betting Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Penn National Gaming Inc. (PENN)||44.91||7.6||271.4||53.1|
|Bally's Corp (BALY)||31.15||1.6||N/A (see company description)||363.7|
|Churchill Downs Inc. (CHDN)||226.46||8.6||158.1||31.1|
- Penn National Gaming Inc.: Penn National Gaming is an omnichannel provider of retail and online gaming, live racing, and sports betting entertainment. The company's wholly-owned interactive division operates retail sports betting, online social casino, bingo, and iCasino products.
- Bally's Corp.: Bally's is a casino-entertainment company engaging in the business of casino hotels and horse racetracks. It also owns Gamesys Group, an online gaming operator; Bally's Interactive, a sports betting platform; and Monkey Knife Fight, a fantasy sports site. The company reported negative EPS for the quarter, so a percentage could not be calculated for the growth table above. On March 14, the company announced the appointment of Bobby Lavan as the chief financial officer (CFO). Lavan has been senior vice president, finance and investor relations since May 2021.
- Churchill Downs Inc.: Churchill Downs is a provider of pari-mutuel gaming entertainment, online account wagering on horse racing, and casino gaming. The company is best known for U.S. racing's premier event, the Kentucky Derby. On March 22, Churchill Downs announced it had entered an agreement to acquire Chasers Poker Room, a charitable gaming facility in Salem, New Hampshire. Chaser's Poker Room has outperformed its state rivals in gaming revenue growth and charitable contributions in recent years. The company expects to close the transaction during the second quarter of 2022.
These are the sports betting stocks that had the highest total return over the past 12 months.
|Sports Betting Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|International Game Technology PLC (IGT)||25.28||5.2||32.5|
|Scientific Games Corp. (SGMS)||61.44||5.9||30.3|
|Boyd Gaming Corp. (BYD)||68.13||7.5||5.8|
|Roundhill Sports Betting & iGaming ETF (BETZ)||N/A||N/A||-34.3|
- International Game Technology PLC: See above for company description.
- Scientific Games Corp: See above for company description.
- Boyd Gaming Corp.: See above for company description.
American Gaming Association. "AGA Commercial Gaming Revenue Tracker."
Supreme Court of the United States. "Murphy, Governor of the New Jersey, et al. v. National Collegiate Athletic Assn. et al."
The Wall Street Journal. "Gambling Firms Race to Expand After Limits Are Lifted on Sports Betting."
YCharts. "Financial Data."
International Game Technology. "International Game Technology PLC Reports Fourth Quarter and Full Year 2021 Results."
Wall Street Journal. "Slot-Machine Developer Scientific Games to Change Name to Light & Wonder."
Light & Wonder. "Scientific Games Corporation Will Transform into Light & Wonder."
Bally's Corporation. "Bally's Names Bobby Lavan Chief Financial Officer."
American Psychiatric Association. "What is Gambling Disorder?"
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