We’ve analyzed Sports Betting stocks and found a ‘winner’; the result may surprise you
- Americans have wagered over $100 billion since June 2018
- The total sports betting handle in 2021 was over $57 billion, a 165% increase over 2020.
- The number of people regularly betting on sports increased by 80% in 2021
The legal U.S. sports betting industry’s growth accelerated in 2021. According to Morning Consult, more than $52.7 billion was wagered throughout the year. The key driver behind this growth has been legal sports bets launching in 11 states and billions of dollars spent on marketing by gambling operators looking to attract new customers.
Key Stats Highlighting Sports Betting’s Growth
- 12% of adults placed bets once a week, up from 5% in January 2021.
- 14% of sports bettors said their average bet is more than $100.
- Oddsmakers only pocketed approximately $4 billion of the total amount wagered last year.
Sports Betting Market Growth May Accelerate
Currently, sports betting is legal in 30 states, and Washington D.C.; Maryland, Nebraska, and Ohio have passed bills and now California plans to put sports betting on the 2022 ballot.
Not only are more states allowing sports betting, but the majority of sports bettors are from younger demographics.
According to a 2021 survey, people aged 44 or under bet far more than older demographics. The following demographics were asked if they place at least one bet a month.
- 31% of people aged between 35 and 44
- 28% of people aged 21 to 34
- 10% of people aged between 45 and 64
- 5% of people 65 or older
How Investors Can Profit Off of Sports Betting
The phrase “the house always wins” is probably why savvy investors are placing their bets on stocks profiting from the sports gambling boom. However, the best bets in the industry may not be who you think.
Sports Betting ‘Household’ Names Struggle For Market Share
FanDuel, a subsidiary of Flutter Ent. (OTCMKTS: PDYPF) & DraftKings (Nasdaq: DKNG) currently make up over two-thirds of the market share, with their extremely popular betting apps.
Gaming giants Caesars Entertainment, Inc. (NASDAQ: CZR) and MGM Resorts International, Inc. (NYSE: MGM) have entered the market pushing competition in the space.
So, while top-line revenue has grown at a staggering rate, the marketing costs associated with securing market share in the space have caused less than stellar profit margins.
For instance, DraftKings (Nasdaq: DKNG) spent $981.5 million on sales and marketing in 2021, equal to 98% growth year over year and 76% of total revenue. Altogether, DraftKings’ operating expenses increased 96% from a year ago, totaling $2.9 billion. The company ended the year with an adjusted loss of $676.1 million in earnings before interest, taxes, depreciation, and amortization (EBITDA), an almost twofold increase in its loss from 2020.
While this could result in significant long-term revenue growth, it is still a risky ‘bet’. If investors have a risk tolerance for sports betting stocks, there is one company that could benefit from the growth of sports betting AND the massive marketing budgets being spent by industry heavyweights.
Winners, Inc. (OTCMKTS: WNRS) is the Best ‘Bet’ For Investors
Winners, Inc. (OTCMKTS: WNRS) is a stock that could live up to its name for investors. The company’s model is to drive investors to sports gaming sites through affiliate marketing. Its business will benefit from the boatload of cash companies like DraftKings, MGM and FanDuel are throwing at customer acquisition.
WNRS stock is in a great position to be a leader in sports betting marketing because its CEO is one of the most recognizable and respected names in sports handicapping, Wayne Allyn Root; aka “King of Vegas”.
Mr. Root’s resume is impressive:
- At age 16 when the media dubbed him “The Betting Whizkid” and “the next Jimmy the Greek.”
- Root has been profiled by the biggest media in the world, including CNBC, CNN, The Wall Street Journal, Fortune, Equities, Worth, Success, Financial Times and Robb Report.
- Starred in a Gambling reality TV show on Spike TV (King of Vegas).
- In 2006, Wayne became the only Vegas oddsmaker or sports handicapper ever awarded a star on the Las Vegas Walk of Stars.
Winners, Inc. (OTCMKTS: WNRS) is flourishing under his leadership and has hit several impressive milestones in the past few months:
- Partnership with bet365, one of the world’s largest sports betting brands and currently legal in New Jersey.
- Signed an agreement with a blockchain-based online casino and sportsbook Titan Corp. d/b/a Spartan Casino.
- Adding 2 industry vets to management; former 888sport executive Todd Kobrin President and former Customer Acquisition Manager at Tabcorp, Andy Scott Chief Marketing Officer.
This week, WNRS’s outlook has become even more bullish with two market-moving announcements.
WNRS’s Google Approval Opens Up Massive Audience
WNRS makes its money by driving gamblers to online sportsbooks. One of the largest online advertising platforms, Google, is extremely tough for firms to secure ad approval on. WNRS has just received this pivotal approval. The approval could be a major revenue driver and is why investors will most likely start hearing a lot more about this company.
The company, which operates through its subsidiary VegasWinners has won Google approval to run campaigns in regulated sports betting markets. This will allow WNRS to substantially increase revenues in the fast-growing online gaming industry expected to reach $1 trillion in 2022.
This will help the company drive substantially more business to its partners, which is one revenue source; the company also sells expert picks on its VegasWinners site, which will certainly benefit from increased exposure.
WNRS Receives Approval From Pennsylvania Gaming Control Board
The State of Pennsylvania is home to more than 12 million people and is the third-largest sports wagering market in America since 2019. This is the latest state to approve WNRS’ VegasWinners. VegasWinners is currently licensed in several states and has made applications in additional states. It is the intent of VegasWinners to get licensed in all states that allow online sports gambling.
The stock received an influx of buying on this news; as the company aims for more statewide approvals, investors can expect future catalysts.
WNRS stock seems like a ‘winner’.
Key Takeaway
Sports betting is booming and investors certainly have several options for capitalizing on the industry’s growth. However, household names are killing their margins with the marketing necessary to make themselves ‘household names.’ For now, investors may want to start researching companies that are providing marketing services to these companies such as Winners, Inc. (OTCMKTS: WNRS).
This article is part of a sponsored investor education program.