Are Gambling Stocks Safe To Invest In?

This article was last updated on April 16, 2022

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Along with the cannabis industry and cryptocurrency, the casino and gambling industry is another new investment phenomenon that you may want to take advantage of. Instead of risking your money on slot machines, card tables, or sports bookies, you can buy shares of the companies who run them and earn a portion of their profits. According to Money Morning, “The gambling industry is red-hot, and that's creating new opportunities for investors to make money on the best gambling stocks right now.” The opportunity is there for big portfolio gains, but like every other investment you should know the risks and how to steer around them.

The Pros Of Investing In Gambling Companies

One reason why stocks in gambling operations are becoming a hot purchase is because the US Supreme Court removed the federal ban on gambling. This move created increased access to gaming outlets and has expanded sports betting. Also, with online gaming and new technology developments that enhance the experience, there are always new opportunities that come up for profits. Not to mention that experts speculate big tech companies like Google and Facebook will also enter the industry.

The Cons Of Investing In Gambling Companies

While there are great opportunities in gambling company investments, there are still risks to watch out for. One reason you may want to stay out of gambling stocks or wait to buy into them is because the COVID-19 pandemic has forced a lot of casinos to temporarily shut. Those who don't have strong financial management may be forced to permanently shutter. Gambling is also now regulated at the state level, so you have to keep a close eye on how laws could change in a short period and affect gambling profits.

Which Gambling Stocks You Should Look For

It's usually smart to stick to companies who are listed on reputable stock exchanges because you can review their financials and get a better look at their potential. Smaller single casino operators usually don't have as much information, and in some cases operate in territories where less financial regulations open the door to illegal activities. Here are companies to consider investing in:

-MGM Resorts (NYSE:MGM)

This is one of the world's biggest casino operators with a long track record of success. It's a good buy not only because of legalized gambling increaseing in the US, but also because they are increasing their sports betting venues.

-International Game Technology (NYSE:IGT)

This is a gaming development company that manufactures the equipment for casinos and also develops online casino game software. As a game developer, they have a lot of clients to bolster their earnings, and most gambling stock experts have been fairly bullish on their earnings.

-Caesars Entertainment Corp. (NASDAQ:CZR)

Owners of the Caesar's Palace Casino and another major player in Las Vegas, Caesars Entertainment Corp. also has a lot to love. More so because they are now merging with Eldorado Resorts which gives them even more holdings and even greater profit potential.

Stocks based in gambling offer a lot to choose from, and the future looks bright for the industry. Just make sure you stay up to date with all industry regulations and make sure you follow sports betting experts.

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