Throughout the coronavirus pandemic, it’s well known that some companies and industries have performed better than others. Take the iGaming market, which benefited from a spike in online demand as brick-and-mortar casinos were closed for much of 2020.
This caused the stocks and shares of iGaming operators to soar in value, particularly among licensed, safe and approved sites that are established as the best USA online casinos.
But how are US casino stocks performing in 2022 so far, and are online sportsbooks stateside offering similar value to interested investors? Let’s find out!
A Look at the Market in 2022 to Date
As February comes to a close, we’ve seen some fluctuation in the stock market as coronavirus cases fall and lockdown measures are eased across the globe.
It’s not all good news, however, with major bank stocks having recently declined after their earnings report at the end of the last week.
This has had a direct bearing on the US markets and leading exchange, with Wall Street marking a second straight negative week to continue a challenging start of the year.
To this end, the Dow Jones Industrial Average slid by 201.81 points (or 0.56%), reaching 35,911.81 in the process.
While both the S&P 500 (0.8%) and the tech-heavy Nasdaq Composite (0.59%) outperformed the wider market to record nominal growth during the same period, there’s no doubt that investor sentiment remains clouded by ongoing uncertainty and volatility.
Also, the success of the Nasdaq has been underpinned by the relentless growth of Apple, which remains akin to a juggernaut in the global financial marketplace.
But what about casino stocks? Well, brick-and-mortar US establishments actually provided a bright spot amid the market’s relative gloom, with a couple of key factors driving this trend.
Firstly, the vast majority of land-based casinos in the USA are now open at full capacity after a spate of coronavirus restrictions were removed across several different states.
What’s more, the US market was buoyed by the decision of the Macau government to allow just six casino licences in the gambling hub. More specifically, Las Vegas Sands surged by 14.1% within hours of the announcement, while Wynn Resorts gained as much as 8.6%.
Of course, investors flocked to US casinos as the Macau market plunged, with this true across both institutional and retail investors alike.
While growth among online casino stocks has largely plateaued since the general cessation of coronavirus and lockdown restrictions, some platforms and games’ providers have shown marked increase in the formative part of 2022.
For example, Bally’s Corp. stock soared by 24% in a single, 24-hour period at the end of January, after the operator received a buyout offer from its largest shareholder (hedge fund Standard General LP).
This offer proposed the buyout of all the firm’s outstanding stock for $38 per share, with the price providing what equates to a 30% premium over the asset’s closing price during the previous trading period.
Overall, there’s no doubt that both land-based and online casinos have driven growth during Q1 2022 to date, although the former have received a more consistent boost thanks to the recent developments in Macau.
What About Online Sportsbooks in the US?
Interestingly, the markets are also showcasing considerable growth within the burgeoning sports betting sector in the US, with close to 30 individual states having now moved to legalise corporeal and remote sports wagering through mobile devices.
In comparison, just six states have legalised online casino gameplay, so remote betting offers far greater scope for growth in the eyes of investors.
This has been borne out by recent trends, with a number of market leading firms offering considerable value to investors in quarter one.
Take MGM Resorts, for example, which remains one of the leading casino operators globally and has participated in some strategic partnerships in the sports betting market since 2018.
Currently, the brand has shared ownership with the UK-based gambling giant Entain, while BetMGM has wowed investors having consistently hit its market share targets of 20% and 25% in the US in recent times (this peaked at 30% in November 2021).
Another market leading sports betting brand in the US is DraftKings, which has become a key player in iGaming and remote wagering as the North American space has boomed since May 2018.
During the last 12 months alone, DraftKings’ top line has surged by more than 150% when compared with 2020, with this driven largely by the rapid growth of sports betting in the US and the operator’s decision to branch into new markets.
Currently, DraftKings has achieved profitability within two to three years of every new state that it enters, providing a key metric for investors who want to secure a return on their capital.
This wider trend is likely to continue in the near-term, with remote sports betting operators and multi-channel brands likely to see exponential share price growth in the near-term.