With the election results still being counted, one thing is for sure. Anything that can generate tax revenue without being an onerous strain on citizens is getting a good bit of attention after the election, and with good reasons. The Supreme Court ruling in 2018 that struck down a 1992 federal law that effectively banned commercial sports betting in most states has been opening the door to legalizing the estimated $150 billion in illegal wagers on professional and amateur sports that Americans make every year.
Since then, more and more states are allowing casinos to open sports books and also legalizing fantasy and e-game betting. Many states, such as Louisiana, Nebraska and Maryland, have gambling initiatives on the ballot. It appears that they passed in those three states.
We screened our 24/7 Wall St. research universe looking for companies that stand to benefit and found five that are solid picks now. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Boyd Gaming
This top stock remains a Wall Street favorite. Boyd Gaming Corporation (NYSE: BYD) operates as a multi-jurisdictional gaming company with 30 gaming entertainment properties located in Nevada, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Ohio and Pennsylvania. It also owns and operates a travel agency. The company was founded in 1973 and is headquartered in Las Vegas, Nevada.
The company remains a favorite for Las Vegas locals and is substantially levered to the Las Vegas market. The company generally targets largely locals in this market. The company’s downtown properties also draw Hawaiian tourists. In general, Las Vegas locals performance is less affected by weekends versus weekdays in a period than other gaming markets would be, as a substantial portion of the local economy works in hospitality.
BofA Securities has a Buy rating and a $40 price target. The Wall Street consensus target is even higher at $42.36. Boyd Gaming stock traded early Thursday at $33.45.
DraftKings
The company became a huge favorite with younger people due to the surge in popularity of fantasy football. DraftKings Inc. (NASDAQ: DKNG) operates as a digital sports entertainment and gaming company. It provides users with daily sports, sports betting and iGaming opportunities. It also is involved in the design and development of sports betting and casino gaming platform software for online and retail sportsbook and casino gaming products.
The company entered the market back in April in a time when most companies were putting off their initial public offerings. The offering was not an IPO in the truest sense because DraftKings came public through a merger with a special purpose acquisition company called Diamond Eagle, but similar rules applied.
The stock was hammered after a big move and is offering aggressive investors an incredible entry point. Top Wall Street analysts feel that sports betting should accelerate after the pandemic and the market for sports betting in the United States could reach $19 billion by 2023 to 2025. They also expect that in 2021 and beyond, engagement with digital leisure, pent-up appetite for sports and political realities should position DraftKings to accelerate.
Oppenheimer has an Outperform rating and boosted the price target in October to $65 from $55. The consensus target is $58.74, and DraftKings stock traded at $41.55 on Thursday.
Penn National Gaming
This is an analysts’ favorite for online gaming and shares have backed up nicely after a massive run earlier this year. Penn National Gaming Inc. (NASDAQ: PENN) owns and manages gaming and racing properties, and it operates video gaming terminals with a focus on slot machine entertainment. It also offers live sports betting at its properties in Indiana, Iowa, Mississippi, Nevada, Pennsylvania and West Virginia, and it operates an online casino under the name of iCasino in Pennsylvania.
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