When the COVID-19 pandemic forced states to enforce mandatory lockdowns in March last year, stocks for brick and mortar casinos took a nose dive. Some casinos saw up to $1 billion of stocks wiped out from stocks exchanges as everyone rushed to cash out.
Interestingly, online gambling businesses never had the same problem. If anything, stocks for online casinos gained value by double digits in many states. Fast forward to 2021, these stocks are steady still. Here are some of the reasons why.
The pandemic impacted state budgets tremendously. Last year, a report from the Center on Budget and Policy Priorities estimated every state would lose at least 10% of their expected tax revenue due to COVID-19. It also projected some states would see the deficit increase to 20% by the end of this year.
Forward thinking states have been looking for ways to reduce these budget deficits. And legalizing online gambling has been an idea floated in many houses of representatives. To be clear, the news that more states are planning to authorize online casinos in 2020 is a major reason for stocks performing well.
However, it will take time before it becomes clear which states are serious about legalizing the industry. New Jersey, which is home to some of the best online gambling sites in the USA according to goodgamblingsites.com, permits all forms of online gambling. Pennsylvania, West Virginia and Delaware have similar laws.
New York is yet to legalize either online sports betting or casinos. There’s a bill to authorize mobile betting and it has the support for Gov. Cuomo. But it’s at an early stage. By comparison, California recently rejected a move to permit online betting even though the state has a $54.4 billion problem caused by COVID-19.
A Huge Untapped Market
The online gambling market in the US is huge. In 2019, the first full year after sports betting became legal, Americans wagered up to $13 billion through mobile betting sites. This was double the amount wagered in 2018.
The thought of the country moving forward with the industry is giving hopes a lot of investors that their stocks in online gambling will pay back. After all, nearly every study so far shows Americans re in love with the idea of legalizing online gambling.
A study by the American Gaming Association, for example, shows 15% of the US population plans to bet on the Super Bowl this year. Another 24% states they had plans to bet on football games regularly if betting became legal.
As we mentioned earlier, states are showing a lot of interest in authorizing sports betting. Unfortunately, not every of them wants to modernize the industry. Some of them only permit in-person betting. What’s more, many of them don’t allow online casinos.
How to Bet on US Stocks
If you’re hopeful the US online gambling stocks market will take off in 2021, consider putting your money where your mouth is. In other words, buy some stocks in the industry. Which stocks can you purchase in the sector?
- DraftKings—this is a well-known Daily Fantasy Sports giant; it brags of commanding 30% of the DFS market in the country. And now that more states are sanctioning DFS, there’s a chance it will expand control of the industry even further.
- Flutter Entertainment: this is a global company that owns international brands like Paddy Power, Betfair and recently FanDuel. According to experts, Flutter Entertainment is projected to grow at an average of 10% every year and an overall 61% growth rate in the US.
- Penn National Gaming—it’s hard to talk about sports gambling brands in the US and ignore Penn National Gaming. The company recently made a partnership with Barstool Sports in a deal that will see Penn National launching a mobile app.
- The Round hill Sports Betting & Gaming ETF: if you’re not sure which stocks to bet on, consider getting started with an ETF like the Round hill. It rounds up the stocks of some of the best performing gambling businesses in the US. In turn, you get a chance to profit from the growth of all the companies. This also reduces risks because you spread the risks.
How to Bet on Online Casinos and Sportsbooks
If you’re not read to buy gambling stocks but want to test how online gambling works, there are a few things you should know. Online casinos are controlled by states. That means you need to live a state where the industry is legal for you to bet on sports or play slots. As we mentioned, these states permit both online casinos and sports betting:
- New Jersey
- West Virginia
If you live in one of these four states, all you need is to find a great casino and create an account. Look for a licensed provider. This is important to note because there plenty of unlicensed websites out there. Then look for security features.
If you spend a significant part of your time on your iPhone, ensure you pick an operator that runs on mobile devices. Many online casinos have websites that work on both iOS and android devices. But you also get the option of installing a native app.
Another feature to look out for is a welcome bonus. Most casinos give out bonuses to new player. So, it’s only fair that you get one. Depending on the operator, you can receive a reward for simply registering an account. Or they could wait until you make your first deposit.
Either way, ensure there’s a bonus. And not just any bonus—read the terms involved to ensure you can fulfill them. If you plan to be a regular player, look out for loyalty bonuses too.
Online gambling is a booming industry in the US. It’s particularly heating up in this era of COVID-19 because many states are facing unprecedented budgetary deficits. And unless they overtax their citizens, their best option is to authorize industries like online gambling. In turn, this driving up the demand for online gambling stocks.