We recently published a list of 10 Best Sports Betting Stocks to Buy Now. In this article, we are going to take a look at where MGM Resorts International (NYSE:MGM) stands against the other sports betting stocks.
A U.S. Supreme Court decision in 2018 set off a sports betting boom that legalized wagering in 38 states and the District of Columbia. North Carolina legalized sports betting on March 11, and within the first 12 hours of the law’s implementation, the state wagered a remarkable $23.9 million. Of these, 30 states allow online sports betting, so if you’re within state lines, the thrill is only a click away. While most states have a minimum age of 21, a handful allow 18 or older.
Consumers can now bet from anywhere as long as they are physically present in the state due to the growth of online platforms. As a result, Americans legally wagered a record $119.84 billion on sports in 2023, up 27.5% from 2022, per the American Gaming Association’s Commercial Gaming Revenue Tracker, ushering in a new era for sports gambling in the US. Consequently, the sports betting industry’s revenue grew to $10.92 billion, a 44.5% YoY increase from 2022. The expansion was predominantly driven by continuing maturation in most existing markets as well as some new ones, including Massachusetts and Ohio. The trend is expected to continue, and in the second quarter of 2024, American sports wagerers wagered $31.75 billion. Revenue from it was $3.16 billion for the quarter, increasing 35.3% from the previous year.
While the United States is at the top of the Biggest Gambling Countries in the World, there are still 12 states in the US that do not allow legal sports betting, including California, Texas, Idaho, Utah, Minnesota, Missouri, Alabama, Georgia, South Carolina, Oklahoma, Alaska, and Hawaii.
Nonetheless, sports betting is one of the fastest-growing industries in the world. Jane Bokunewicz, director of the Lloyd Levenson Institute at New Jersey’s Stockton University, which studies the gambling industry, points out that legal sports betting could be appealing to people with limited discretionary budgets since it offers a new and inexpensive form of entertainment.
Goldman Sachs Research also states that the U.S. sports betting market is expected to grow significantly and, once it reaches maturity, could reach $45 billion each year. This growth will be prompted by new state openings and a growing share of consumer spending on sports betting, per Ben Andrews, head of leisure and travel research at Goldman Sachs in Europe, where legal sports betting has a longer history.
When it comes to consumer spending on sports betting, gambling interest reflects a sport’s popularity, with NFL football dominating in the United States. In 2023, over 73 million Americans said they planned to bet on the NFL season, which is almost 60% more than the previous season, according to a survey conducted by the American Gaming Association.
Globally, nearly one-third of people worldwide engage in sports betting at some point in their lives, based on the TGM 2022 Global Gambling and Sports Betting Survey. In 2021, 17% of people bet on sports with friends (mainly on football and horse racing), while 35.44% bet on sports, and 20.2% bet online/through applications.
According to Deloitte’s 2024 Sports Industry Outlook, generative AI is projected to dramatically impact sports betting in the next 12-18 months. The way sports fans interact with sports betting will probably undergo a revolution because of innovations in domains like personalized betting experiences, odds calculation, real-time data analysis, and improved prediction models.
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Aerial shot of an entertainment resort, its buildings and gaming amenities sprawling along the seafront.
MGM Resorts International (NYSE:MGM)
Number of Hedge Fund Holders: 44
Among the largest operators of casinos in Macau and the United States is MGM Resorts International (NYSE:MGM). It also owns BetMGM in partnership with Entain of Britain. As of the end of the second quarter of 2024, BetMGM reported having a 13% market share in sports betting and iGaming in the United States and Ontario, Canada, and this could possibly significantly benefit the gaming industry.
In an effort to secure an iGaming and sports betting license in Brazil, MGM recently revealed that it has established a new business venture with Grupo Globo, a Latin American media organization. The new business will debut under the BetMGM brand in early 2025 if it is approved later this year.
The purchase of LeoVegas, a Swedish mobile gaming company and provider of online casino and sports betting services, in 2022 and MGM’s 50% stake in BetMGM demonstrate the company’s dedication to growing its online gaming business. In addition to diversifying MGM’s revenue streams, these digital endeavors put the firm in a position to profit from the expanding online gaming and sports betting industries.
Citing solid Q2 2024 performance across all segments and a bullish outlook for the company’s International Digital division, BTIG analyst Clark Lampen has reaffirmed a “Buy” rating on MGM Resorts with a $52.00 price objective. JMP Securities also maintained a “Buy” rating with a price objective of $57.00.
MGM Resorts International (NYSE:MGM)’s diversification is contributing to the expansion of its revenue stream and its client base, which are increasing the company’s earnings and margins.
It is one of the Best Sports Betting Stocks to Buy Now. Keith Meister’s Corvex Capital is the largest shareholder in the company, with 5,859,478 shares worth $260.40 million.
Overall MGM ranks 4th on our list of the best sports betting stocks to buy. While we acknowledge the potential of MGM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MGM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.