While online betting saved the casino industry in 2020 while resorts in Las Vegas, Atlantic City, and elsewhere around the country (and globe) were shuttered by the pandemic, actual casinos are still what most people associate with gambling.
Yet even before the coronavirus outbreak turned everything topsy-turvy last year, the industry was changing radically. Online casino games remain a growth business, sports betting is getting huge, and regional gaming markets could be a better bet for investors than the big-name destination cities.
Here are the industry's high rollers -- the 10 largest gambling stocks in 2021 with valuations of at least $5 billion.
10. Boyd Gaming: $6.7 billion
As noted, the regional markets have been a growth opportunity, and Boyd Gaming (BYD 0.77%) has been one of the leading players in the space. Although it has a heavy presence in Las Vegas, it's not reliant upon the Las Vegas Strip, which is heavily tourist-dependent. Instead it concentrates on locals with casinos in 10 states, which has helped it to bounce back strongly this year. It is the top-performing casino operator so far in 2021 with a better-than-40% return, and it also has an extensive sportsbook and online gaming operation too, making it a stock investors should consider buying for the post-pandemic rebound.
9. Churchill Downs: $9.0 billion
Best known as the home of the iconic annual Kentucky Derby horse racing event, Churchill Downs (CHDN -0.44%) has expanded far beyond ponies and mint juleps to become a casino and online gaming powerhouse. It has brick-and-mortar casinos in eight states, and an online betting platform for iGaming, sports -- and yes, horse racing, as well as a series of pari-mutuel wagering systems for horse racing.
8. Melco Resorts & Entertainment: $9.3 billion
Hong Kong-based Melco Resorts & Entertainment (MLCO -1.86%) primarily operates in Macao, the only place in China where it's legal to gamble, but also has an integrated resort in Manila, Philippines, and recently announced it will be opening one in Cyprus in 2022. Yet like all the other Macao-dependent resorts, Melco's business has been decimated by the coronavirus pandemic. Even though the region has been operational since February 2020, travel restrictions have limited its ability to bounce back. Monthly gaming revenue has been crippled, and was down 80% last year; it's only slightly better so far this year, but should steadily improve.
7. Wynn Resorts: $14.7 billion
Like Melco, Wynn Resorts (WYNN -0.83%) relies heavily on Macao for most of its revenue and profits from the VIP and mass premium crowds that visit the city. Yet with about a third of its business derived from Las Vegas, so it has been hit twice by the pandemic. It remains hopeful the situation will normalize now that Beijing has lifted most travel restrictions, and monthly gaming revenue in Macao more than doubled in February, though that was an admittedly low bar to step over. Still, there is a belief that the high rollers will return soon, both here and abroad, and the world-class resort will be able to grow once more.
6. Penn National Gaming: $16.7 billion
Penn National Gaming (PENN 3.31%) is another regional gaming giant. It previously built its dominance in casinos and racetracks, but more recently has branched out into online betting. Its entry into the sports betting market with its Barstool Sports app gives it significant potential to make a name for itself in that burgeoning market, even if it is only a small percentage of the company's revenue today. Like Boyd, however, it has catered mostly to locals in the regional markets it services, which is likely why its stock has been the third-best casino performer this year behind Boyd and DraftKings.
5. Caesars Entertainment: $18.2 billion
Caesars Entertainment (CZR 1.78%) is the world's largest casino operator in terms of the number of properties it operates, with over 50 resorts globally following its acquisition of Eldorado Resorts. It is also the second-largest on the Las Vegas Strip with eight properties. It has moved past its bankruptcy and is now a premier casino operator, with a sportsbook growing in size and importance. That could also see new growth from the recent partnership the company entered into with sports livestreaming leader fuboTV, which just entered the sports betting market.
4. MGM Resorts: $18.6 billion
A world-class casino operator in its own right, MGM Resorts (MGM -0.22%) is more focused on the U.S. market than some of its rivals. It straddles a unique position as a global resort company, a regional market player, and an online and sports betting empire builder. Its BetMGM app has proved critical to its resilience, and its connection to the resort's member loyalty program keeps players coming back, and encourages them to visit its properties too. It is a leading presence in most of the markets it operates in, and gives investors a good blend of physical and online gambling opportunities.
3. DraftKings: $25.3 billion
Sports betting is expected to grow into a better-than-$19 billion industry annually by 2025, and daily fantasy sports and sportsbook leader DraftKings (DKNG -0.41%) is expected to be one of the primary beneficiaries of that growth. Having gone public just last year through a reverse merger with a special purpose acquisition company, or SPAC, DraftKings is the second-biggest sports betting site in the country with about a 25% share of the market. One analyst calls its stock "a must-own for growth investors." By leveraging its fantasy sports business through deals with professional sports leagues, teams, and sports broadcast networks, DraftKings drives more players to its premium business. Its stock has been one of the best performing ones in the space, up nearly 37% in 2021.
2. Flutter Entertainment: $39.7 billion
Flutter Entertainment (PDYPF 0.77%) is best known in the U.S. for its FanDuel fantasy sports and sports betting arm, but it is the world's largest online gambling operator, and also owns PokerStars, BetFair, FOX Bet, and TVG, an online horse and greyhound racing television network. It was formed through a merger of BetFair and Paddy Power, and is now considering offering an IPO of a small portion of its FanDuel business, which has a leading 40% share of the U.S. sports betting market. As more states legalize wagering on sporting events, it's a good bet FanDuel and Flutter Entertainment will be leading the way. Its stock is up 12% year-to-date.
1. Las Vegas Sands: $46.6 billion
Las Vegas Sands (LVS -1.39%) may need to change its name now that it has decided to sell all of its Las Vegas properties and focus completely on the Asian market. It agreed to sell The Venetian Resort, Palazzo resort, and the Sands Expo & Convention Center for a total of $6.25 billion, with private equity firm Apollo Global Management buying the properties' operating company and VICI Properties, the real estate investment trust spun off by Caesars, acquiring the properties. No one is hoping the Macao market bounces back quickly more than Las Vegas Sands, which also explains why its stock has been the worst-performing casino stock this year with a less-than-3% return.