In 2020, Eldorado Resorts acquired Caesars Entertainment (CZR +0.29%), retaining the Caesars name after the deal. Post-merger, Caesars became the largest casino operator in the U.S., with 54 properties worldwide, including eight on the Las Vegas Strip. Caesars operates casinos in 16 states.
Eldorado had been a top casino stock prior to the merger. The company, now known as Caesars, has delivered returns of roughly 1,700% since its 2014 initial public offering (IPO), thanks in part to Eldorado's aggressive acquisition strategy. The company spent $4 billion to buy British online gaming company William Hill Group in April 2021.
Although Caesars has made strides in online gaming, the majority of its business still comes from its Las Vegas and regional casinos. Like other casino chains, Caesars seeks to leverage its national network through a loyalty program that encourages visits to multiple properties.
With a strong push into online gaming, a well-respected sportsbook, and a balanced casino business between Las Vegas and regional locations, Caesars looks well-positioned for future growth, especially if you're looking to avoid the tumult in Macau. Revenue rose 2% in 2025 from $11.2 billion to $11.5 billion as its Las Vegas business declined slightly, offset by its regional and digital business. However, Las Vegas is the most profitable of its segments.
Features to look for in casino stock
Casino stocks have evolved from the Vegas strip, and they offer investors a number of different opportunities. Here's what to look for if you're considering casino stocks.
- Growth opportunities: Whether a casino is growing through online betting, new properties, Macau, or regional casinos, it's important that it has a growth strategy that is showing results.
- Profitability: Casino stocks often report earnings in terms of adjusted EBITDA, but investors will want to find stocks that are also generating GAAP profits, ideally with strong operating margins. Most traditional casino operators are profitable, but online betting companies have struggled to turn a profit.
- Dividend yield: Most casino operators pay dividends, and that's a key part of the equation for many investors. Look for casino stocks with healthy yields, moderate payout ratios, and a history of dividend growth.
- Market presence: It's important to understand casino exposure. Markets like China, Vegas, regional U.S., and online all come with different risks and opportunities. Similarly, some operators are more diversified than others.
- Financial resilience: The casino industry is cyclical, so it's a good idea to consider the companies' balance sheets and look for financial resilience. While a lot of them have large debt balances, they should also be well-capitalized so that they can manage any downturns.
Should you buy casino stocks?
As a sector, casino stocks have underperformed the market over the past 10 years, but there have been big winners, including Caesars and online gaming stocks, such as DraftKings. With the expansion of online gambling in the U.S., the next 10 years will likely be much different from the past decade.
Below are several reasons to buy casino stocks:
- Casino stocks are closely correlated with the travel industry, which has been outgrowing the overall economy.
- Casino stocks are high-beta stocks, meaning they tend to outperform in bull markets. This is because consumers and businesses spend more money at casinos when the economy is strong.
- Casino stocks often pay dividends.
- Established casino companies tend to have strong operating margins and benefit from scale advantages.
- Acquisitions are likely to make the industry more concentrated, benefiting operators.
- Online gambling stocks can offer high growth potential.
Risks of investing in casino stocks
Compared to the average stock market sector, the casino industry probably has more risks. Let's take a look at some of the bigger ones.
- The casino industry is highly regulated, and changes in regulation have a huge impact on performance. For instance, it would be devastating to a casino to lose its license to operate in Macau.
- The rise of online gambling poses a threat to traditional casinos, and now prediction markets, which operate outside of the scope of the gaming industry, pose a threat to gambling, especially online gambling.
- The industry is highly sensitive to the macroeconomic climate as it depends on consumers having discretionary income to spend and on their ability to travel and take vacations.
- Casinos compete with other forms of entertainment, and they may lose market share over time to other options.
- Casinos also have a reputational risk as "sin stocks" and they could experience a backlash, much like smoking has.
How to invest in casino stocks
If you're interested in buying casino stocks, the process is simple. Just follow these steps.
- 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.
