Top Casino Stocks to Watch in Q2 2023: Prices, Growth & Trends

In Q2 2023, Light & Wonder shines as the best value casino stock, while NeoGames leads in rapid growth and momentum.

Key casino stocks like NeoGames SA, Melco Resorts & Entertainment Ltd., and DraftKings Inc. have surged over 84% amid a strong industry recovery following COVID-19 disruptions.

The VanEck Gaming ETF (BJK), a benchmark for casino industry performance that includes gaming and online betting firms, has risen 28% in the past year, outperforming the Russell 1000 Index's 7% climb.

Below, we analyze top casino stocks based on value, growth, and momentum as of mid-May 2023.

Best Value Casino Stocks

These stocks feature the lowest 12-month trailing price-to-earnings (P/E) ratios, indicating investors pay less for each dollar of profit, with dividends and buybacks enhancing shareholder returns.

• Light & Wonder Inc.: Formerly Scientific Games Corporation, Light & Wonder designs gaming content for casinos. The company cut its debt by 55% after repaying $4.8 billion. Recent earnings declined due to divesting lottery and sports betting segments.
• PENN Entertainment Inc.: Offering entertainment, sports content, and casino gaming nationwide and online, PENN’s net income soared tenfold in Q1 2023 following its acquisition of Barstool Sports and a $500 million gain from lease reclassification.
• MGM Resorts International: Operating global gaming and entertainment resorts, MGM saw net revenue grow over 33% in the latest quarter, boosted by rebounding leisure travel and acquiring Las Vegas’ Cosmopolitan.

Fastest-Growing Casino Stocks

Ranked by a balanced growth model combining year-over-year revenue and earnings-per-share growth, excluding extreme outliers.

• NeoGames SA: An Israeli tech firm specializing in iLottery and iGaming solutions, NeoGames expanded through merging with Aspire Global and sustained strong core lottery growth despite a recent net loss. It announced a $1.2 billion acquisition by Aristocrat Leisure Limited.
• Las Vegas Sands Corp.: Developer of integrated resorts including Marina Bay Sands and Venetian Macao, Las Vegas Sands’ revenue surged with post-pandemic travel recovery, though EPS declined due to prior-year gains on discontinued operations.
• VICI Properties Inc.: This casino and hotel REIT owns iconic properties like Caesars Palace and MGM Grand. Revenue more than doubled recently, aided by leisure travel rebound and acquisition of four PURE Canadian Gaming properties.

Casino Stocks With the Most Momentum

These stocks delivered the highest returns over the past 12 months among our selected companies.

• NeoGames SA: Refer to description above.
• Melco Resorts & Entertainment Ltd.: Hong Kong-based resort operator focused on Macau and Europe, Melco’s Q1 2023 revenue jumped 51% as Macau eased COVID restrictions.
• DraftKings Inc.: A leading fantasy sports and sports betting platform in the U.S., DraftKings recently launched DK Horse, its first horse-racing betting platform across 12 states, expanding its market presence.

Risks Associated with Casino Stocks

Casino stocks are often classified as sin stocks due to moral concerns, similar to alcohol and tobacco companies. While typically defensive during economic downturns, they face risks from negative publicity, regulatory changes, and public opinion shifts.

For example, U.S. sports betting regulations vary widely by state, with some authorities opposing legalization due to public welfare concerns.

Additionally, illegal gambling operators pose a significant threat, prompting calls from the American Gaming Association for stricter federal enforcement against offshore sites.

Emerging Trends in Casino Stocks

The global gambling market, valued at $449 billion in 2022, is projected to nearly double to $848 billion by 2032, driven by sports betting and online gambling growth.

Factors fueling digital gambling include widespread smartphone use, increased disposable income, rising female participation, and the convenience of cashless payments. Technological advances like virtual reality and blockchain also accelerate industry innovation.

Casino companies are diversifying revenue streams by embracing sports betting, which has expanded rapidly following the 2018 Supreme Court ruling legalizing it beyond Nevada, enabling both physical sportsbooks and online/mobile platforms across many states.

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