The U.S. Supreme Court struck down the federal ban on sports betting in a 2018 decision, opening the doors for states to legalize it if they wish. Since then, 38 states and the District of Columbia have legalized sports betting in some form, many allowing online bets. Missouri is set to become the 39th state in December.
Six top sports betting stocks in 2025
As more states legalize sports betting, the market is growing quickly. Not only are new states easing restrictions, but betting is also growing more popular each year in states that have already legalized it. If you want to invest in this rapidly growing industry, here are six options to consider:
1. Flutter Entertainment
NASDAQ: DKNG
Key Data Points
DraftKings (DKNG -1.70%) operates the second-largest online sportsbook in the U.S., accounting for about 34% of the market. It currently operates in 25 states and Washington, D.C., and its online casino is available in five states.
DraftKings is solely an online operator in the U.S. and Canada. It doesn't have any brick-and-mortar casinos, so it's a pure play on the growth of online sports betting in North America. Given the expected expansion of online sports betting in the U.S. and Canada, its online-only presence gives the company great growth potential.
DraftKings is executing well and growing its market share quickly. It added 3 million active customers in 2024 despite strong competition from new entries into the market.
As a result, net revenue is growing quickly, and earnings before interest, taxes, depreciation, and amortization (EBITDA) growth is strong. In 2025, the company plans to introduce a tax surcharge in states with high taxes on sportsbooks, a move that could boost profits but may come at the cost of market share.
3. MGM Resorts
NYSE: MGM
Key Data Points
MGM Resorts (MGM -1.70%) is one of the biggest casino operators in the U.S. and Macau. It also jointly owns BetMGM's U.S. operations with Britain's Entain, and in 2022, it acquired LeoVegas, a leading sports betting and igaming operator in 10 European countries. MGM uses LeoVegas to offer BetMGM-branded services outside the U.S.
BetMGM has seen its market share in U.S. online sports betting fall to just 8% as FanDuel and DraftKings continue to grow, but it's stabilized around that level. It also lost its lead in igaming, with its market share falling below 25%.
MGM's brick-and-mortar operations will expand to Japan next decade as it's set to open the country's first legal casino in Osaka in 2030. That could be a big opportunity in the long run. In the meantime, operations in the U.S. and Macau have recovered and are moving past pre-COVID-19 pandemic levels.
4. Caesars Entertainment
6. Roundhill Sports Betting & iGaming ETF
For investors looking for broad exposure to the sports betting and online gaming industry without picking individual stocks, the Roundhill Sports Betting & iGaming ETF (BETZ -1.71%) invests across a portfolio of stocks in the industry. The fund currently holds more than 30 positions, including several of the names mentioned above. And its expense ratio of 0.75% isn't too high for a specialized index fund.
Investments include sportsbooks, technology for enabling online sportsbooks, casinos, and online gaming. It's also heavily invested in international stocks, which comprise nearly two-thirds of its holdings. That could change, however, as the U.S. market for sports betting grows relative to the rest of the world.
A small position in this ETF could be worth a bet for investors looking for a simple way to gain exposure to sports gambling.
Pros and cons of investing in sports betting stocks
As with any industry, there are pluses and minuses to investing in sports betting stocks.
Pros:
- The U.S. is still in its early days of legalized sports betting, and many states have yet to fully legalize it. That provides significant growth opportunities.
- Technological advances and data collection provide additional growth opportunities to expand the market with more betting products and broader event coverage.
Cons:
- Federal law and regulations could curb U.S. sports betting, such as the new limit on gambling loss deductions in the latest tax legislation.
- Prediction markets present a new competitive threat to dedicated sports betting companies.
How to invest in sports betting stocks
- Open your brokerage app: Log in to your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.
FAQ
About the Author
