Betting on Online Casino Stocks

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Just like you need a thorough understanding of any investment you want to put your money into, so should you understand how online casino stocks work. In a generation where people are looking for ways to be stable financially, you will need to be aware of the fake casino stocks on the ground.


Of course, many scams are promising glorious things of how they will reward you highly, but before choosing your gambling stock have some knowledge of this trending topic. Besides, knowing your casino stocks agent, you need to understand the rules that govern this gambling industry.

So what should you have in mind before betting on any online casino stocks? Here are some of the things you should know:


1. Know your Betting Casino Area

Online casino stocks are typically in three strati: the suppliers, the casino themselves, and the REITs. Before you start your betting, you need to have an understanding of your investment casino area. Are you going to bet on the suppliers, casinos, or REITs?

Casino Suppliers

Well, when we talk of suppliers, there are two major supplier companies that slot machine operators work with: Scientific Games (NASDAQ: SGMS) and the International Game Technology (NYSE: IGT).

These two companies are responsible for virtually everything related to slot machines and gaming. Although there have been controversies on whether online gambling should is acceptable, most of the games have gone online. So most of the games you are betting on are regulated by either SGMS, IGT, or The Stars Group.

Casino Operators

When it comes to casinos, you have three major casino companies, namely MGM Resorts (NYSE: MGM), Las Vegas Sands (NYSE: LVS), and Caesars Entertainment (NASDAQ: CZR). There are also dominant regional companies like Boyd Gaming and Penn National Gaming. Las Vegas is perhaps the most renowned casino operator with one of the most significant market share.


Finally, we have real estate investment funds (REITs), which is one of the casino investment areas. The REITs involve owning the land and property in which the casinos operate. The three primary players in this area include MGM Growth Properties (NYSE: MGP), Gaming and Leisure Properties (NASDAQ: GLPI), and the VICI Properties (NYSE: VICI). REITs are low in risk for the investors. Besides, as an investor, you will get dividends.


2. Understand your Regional Dynamics

Some factors may be surrounding a casino that determines its success or failure. If you have a thorough understanding of how your investment will be affected, you can end up making a more sound decision. Some factors are specific to a particular region. It could be political, societal, or behavioral.

An excellent example of an environmental factor was the crackdown of money laundering held in China in 2014. This crackdown affected the investors of Macau casino stocks, which received quite a heavy blow.

Example of success would be in Sweden, where the online casino industry is now legalized and growing fast. Swedish Stock Exchange is the biggest in number of online gambling companies listed, companies like LeoVegas, Kindred Group, NetEnt AB, Betsson are on the Nasdaq Nordic in Stockholm, Sweden.


3. Beware of the Technological Advancements and their Effects

Online gambling is one major area that is usually affected by any innovation, primarily technology released into the market. When competition comes from a newly established change, it will affect your stock. As an investor of casino stocks, you have the responsibility of monitoring any advancement that may bring competition on your shares.

Although in every sphere, there is a threat, in the suppliers’ space, there seems to be no massive threat except for the electronic casino game suppliers. In the sphere of the casino, the primary danger comes in when the state decides to allow more casinos into the market.

This entrance of casinos into the market affects the existing casinos negatively and demeans their value in the market. Of course, when the supply is high, the demand will be low; that means higher risks for casinos when we have many casinos in the market.


4. Be Ready for the Unexpected

Just like any other investment, the unexpected may happen depending on the volatility of the stock. Being ready to enjoy when the stock rises and discontented when it falls is a significant factor you should not ignore. You will need to evaluate both regional and international elements to know how they affect the volatility of your casino stocks.

If you are one of the adventurous investors who want to explore investments, then casino stock is a proper scope you should consider. Over the years, casino stocks have been known to be performing better than most ordinary shares. That means that casino investments can be very lucrative if you make the right decision.


5. Have Some Knowledge on the End Customers

End customers are the ones that drive demand either positively or negatively. Every stock and investment companies have their core drivers of the market in diverse regions. How these end customers fit into the extended supply chain will determine how your stock demand will be.

For example, the Las Vegas Sands has its drivers as tourists whole Macau has the VIPs as their drivers. When there is a recession or inconsistency between these end customers (drivers), the casino stock will receive a negative strike.

On the scope of casino suppliers, their end customers are the casino operators. The more casinos are established, the better for them. On the other hand, REITs want to see the establishment and success of the casinos. The higher the success of the casinos, the better for REITs and its investors.


6. Know the Regulators

Finally, you need to understand the role of regulators in casino investments. Of course, you know that casinos are the most regulated and highly monitored businesses across the globe. Regulators determine which casino operator gets a concession.

If a particular operator wins a concession, the better it will be for them and their investors. As investors, don’t put your bets on a casino, which is not maintaining their existing casino licenses.



In addition to the above six factors that you should consider in your casino investment, always ensure that the casino stock that you have chosen is an excellent match to what you can risk. Although casino stocks can be very lucrative, they are not for everyone. Ensure you can match the volatility in the industry.

If you must invest in casino stocks, then go for REITs; they are least risky compared to casino suppliers and casino operators. Just like any other investment, remember to diversify your investment and have a thorough knowledge of the field. Nevertheless, this is a virgin niche that you can step in as an adventurous investor.


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