The landscape of gaming equities has evolved over the years, shifting from a dominance of casino stocks to now include significant contributions from online sports betting and real estate companies. This change has brought about new investment opportunities for traders and investors alike.
Two notable publicly traded casino landlords, VICI Properties and Gaming and Leisure Properties, have emerged as key players in the real estate sector. As real estate investment trusts (REITs) that were spun off from major casino operators, VICI and Gaming and Leisure offer investors a unique business model that is not reliant on casino visitation or gambling outcomes. Instead, these REITs collect rent from their tenants, providing a steady revenue stream that is less volatile than traditional gaming activities.
In recent years, VICI Properties has seen a significant increase in revenue, thanks in part to its aggressive acquisition strategy. The company has diversified its revenue streams by acquiring assets beyond traditional gaming activities, such as Bowlero bowling centers and the Chelsea Piers complex in New York. VICI is also the largest owner of Las Vegas Strip casino real estate, with property assets that include iconic venues like Caesars Palace, MGM Grand, and the Venetian.
Investing in casino real estate stocks like VICI and Gaming and Leisure can offer investors additional benefits, particularly during times of inflation and changing interest rates. REITs typically include inflation escalators in their tenant contracts, making them a favorable investment option when inflation rises. Additionally, the long-term leases that gaming companies sign with these REITs provide analysts and investors with a more predictable outlook on future earnings and cash flow.
Aside from real estate, online sports betting has emerged as a growth leader in the gaming industry since the legalization of sports wagering in the US. Companies like DraftKings and FanDuel parent Flutter Entertainment have capitalized on the growing trend of online and mobile sports betting, creating a duopoly in the market. The shift towards online betting has transformed the gambling industry, making it more accessible to a broader audience and less reliant on physical sports books.
As online wagering continues to grow, particularly with the potential expansion of iGaming in addition to sports betting, investors have a unique opportunity to capitalize on this trend. The internet has revolutionized the way people gamble, shifting the focus from traditional brick-and-mortar casinos to online platforms accessible from the palm of your hand. With the expected surge in online betting in the coming years, companies in the online sports betting sector are poised for continued growth and success.
