The sports betting industry has seen explosive growth over the past few years, fueled by the legalization of sports betting across various states and the increasing acceptance of gambling as a mainstream form of entertainment. Certain stocks in the sports betting sector present compelling long-term opportunities for investors looking to capitalize on this trend. Here are three sports betting stocks to buy and hold for the next decade.
1. DraftKings Inc. (NASDAQ: DKNG)
Overview – DraftKings Inc. is a leading player in the sports betting and daily fantasy sports markets. Since its inception, DraftKings has become synonymous with sports betting, offering a wide range of betting options across various sports.
Why Buy and Hold?
- Market Leader: DraftKings is among the most recognized sports betting industry names. Its strong brand presence and user base provide a significant competitive advantage.
- Expansion and Partnerships: The company has been aggressive in expanding its market presence through strategic partnerships and acquisitions. DraftKings has partnered with numerous sports leagues, teams, and media companies, enhancing its visibility and reach.
- Technological Innovation: DraftKings continues to invest in its technology platform, offering innovative features like live betting, player props, and same-game parlays. These advancements not only attract new users but also retain existing ones.
- Financial Performance: Despite the challenges posed by the COVID-19 pandemic, DraftKings has shown robust revenue growth. As more states legalize sports betting, the company is poised to capture a larger market share, driving long-term revenue and profitability.
2. Flutter Entertainment PLC (OTC: PDYPY)
Overview – Flutter Entertainment PLC is a global sports betting and gaming company, owns several prominent brands, including FanDuel, Betfair, and PokerStars. The company’s diverse portfolio positions it well to benefit from the growing sports betting market.
Why Buy and Hold?
- Global Presence: Flutter operates in multiple markets worldwide, providing a diversified revenue stream. Its international presence reduces reliance on any single market and offers growth opportunities in emerging markets.
- FanDuel Dominance: In the U.S., FanDuel is one of the leading sports betting platforms. With the backing of Flutter’s resources, FanDuel has expanded rapidly, capturing significant market share and establishing itself as a dominant player.
- Innovation and Product Diversification: Flutter continually innovates its product offerings, ensuring it stays ahead of competitors. From traditional sports betting to online casino games and poker, Flutter’s diverse product suite appeals to a broad audience.
- Strong Financials: Flutter’s strong financial position allows it to invest in growth opportunities and weather industry challenges. The company’s focus on profitability and cash flow generation makes it a stable long-term investment.
3. Penn National Gaming Inc. (NASDAQ: PENN)
Overview – Penn National Gaming Inc. operates gaming and racing properties, and has a significant interest in sports betting through its Barstool Sportsbook brand. The company’s strategic investments and partnerships position it well for future growth.
Why Buy and Hold?
- Barstool Sports Partnership: Penn National’s acquisition of a stake in Barstool Sports has been a game-changer. The partnership leverages Barstool’s large and engaged audience, driving traffic to Penn’s sports betting platform and enhancing brand loyalty.
- Omni-Channel Strategy: Penn National’s integrated approach, combining physical casinos with online sports betting, provides a seamless customer experience. This omni-channel strategy enhances customer acquisition and retention.
- Expansion Opportunities: With its extensive network of casinos and racetracks, Penn National is well-positioned to capitalize on the expanding sports betting market. The company’s physical presence in multiple states provides a significant advantage as more states legalize sports betting.
- Financial Growth: Penn National has demonstrated strong revenue growth, driven by the success of its sports betting operations and the recovery of its casino business post-pandemic. The company’s focus on profitability and disciplined capital allocation bodes well for long-term investors.
Conclusion
Investing in the sports betting sector offers substantial growth potential, given the industry’s rapid expansion and increasing acceptance. DraftKings, Flutter Entertainment, and Penn National Gaming stand out as strong candidates for a buy-and-hold strategy over the next decade. Each company boasts a strong market position, innovative offerings, and strategic growth initiatives that position them well for long-term success. As always, investors should conduct their research and consider their risk tolerance before making investment decisions.
