Updated Jan 13, 2025
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There’s no shortage of casino stocks to invest in ranging from big US-based organizations to others that are headquartered in countries like the UK, Malta and even Gibraltar. But does it always hold that investing in casino stocks will prove to be profitable?
After all, there is an adage that always accompanies information about speculations is that the value of your investment may fall as well as rise and you may get back less than you invest.
So, before we go any further into this investigation, these are words to very much take to heart. That said, there’s also general agreement that markets might fluctuate, but over the medium to long term they tend to rise.
There are also plenty of reasons why they make for a good potential investment.
For some time now the global casino market has been growing in size. In 2024 it has been valued at a little over $163 billion. But by 2030 it is projected to be worth a staggering $224 billion.
The anticipated growth is based on a number of factors. These include the increasing liberalisation of gambling around the world, for example with a growing number of states in the US starting to permit online casinos by law.
This is leading to more and more casinos coming into operation creating an ever-more competitive and vibrant sector.
Many casino operators have also diversified into different, but related, areas such as hotel accommodation, entertainment and sports betting. This broad-based approach means that they have a number of different revenue streams that can all contribute to the organization’s overall success.
Then there’s the question of globalization. The biggest casino operators are truly worldwide businesses which brings with it great stability. So, say that The US finds itself in a recession, the operator’s Far Eastern and Asian business arms could well be thriving. This also gives the business huge scale and profit potential.
In recent years there have also been a number of mega-mergers and takeovers within the casino sector, generally resulting in a rise in their values. If you’re lucky enough to hold stocks in an operator that is involved in one of these there’s a good chance that you’ll benefit too.
Technology plays an increasingly important part in their operations. As this advances, so does their efficiency and overall appeal to players – the real driving force behind any business success.
We also have to return to the first point made in this piece. Casinos are inherently profitable, providing that they’re being well run and there are enough players who want to play in them.
That said, like any investment, casino stocks aren’t without their inherent dangers.
All businesses, whatever their size and track record, can hit choppy waters and see their share price plunge.
Often this can be because of events beyond their control and the markets simply get spooked. A prime example of this occurring came in October 2024 in the UK. There was a rumour circulating, unconfirmed, that the newly-elected government was aiming to increase the taxes levied on gambling companies’ profits.
As soon as news got out several casino companies saw their values fall by about 12%. As yet these plans to hike taxes have not come to fruition and the share prices have gradually recovered. However, it does give an indication of how little it takes to introduce some volatility into the market.
There is also the almost-constant risk that gambling legislation could be tightened at any time, with potentially serious consequences for operators’ profitability.
Another issue may be the way in which competition can be a two-edged sword. While it undoubtedly stimulates a sector, it also means that only the strong thrive, and even survive. So backing the wrong horse in the casino investment game can sometimes go horribly wrong.
If you’re thinking of investing in a casino operator, the advice is the same as it would be for any investment.
Make sure you research the company thoroughly. This can involve carefully studying their annual report, including the figures for operating profits as well as liabilities. The CEO’s report that usually prefaces these is also a good source of information.
There are also plenty of online investor sites that can let you know about the best prospects for your money.
Provided to take a steady and logical approach, and heed warnings about regulatory changes or economic clouds on the horizon, then casino stocks are well worth considering. But also remember that it’s best seen as a long game and not one where you’ll be turning over a quick profit.