The gambling industry isn’t just about luck; it’s big business. Stock markets and casinos are way more similar than you’d think. In the high-stakes world of finance, gambling stocks are the new aces. The reason is they are booming rapidly. Think of them as the slot machines of Wall Street. Sometimes unpredictable, always exciting.

The global casino and online gambling industry had a market size of $262 billion in 2021, and it is expected to grow at a compound annual growth rate (CAGR) of 5.6% from 2021 to 2028. The global online gambling and betting industry alone was worth $61.5 billion in 2021, and it is projected to reach $114.4 billion by 2028, with a CAGR of 10.3%.

The main drivers of this growth are the increasing adoption of smartphones and internet access, the legalization and regulation of online gambling in various countries, and the innovation and diversification of gambling products and services.

To select the top 5 gambling stocks by market cap, we used the data from BettingGuide.com, which ranks the largest gambling companies by their market value as of September 27, 2023. Market cap is the total value of all the shares of a company, and it reflects its size, profitability, and growth potential. The top 5 gambling stocks by market cap are:

Company	Ticker	Market Cap	Share Price
Las Vegas Sands	LVS	$34.61 billion	$45.18
Flutter Entertainment	FLTR	$29.63 billion	$77.30
Evolution Gaming	EVO	$21.1 billion	$98.97
Aristocrat	ALL	$17.21 billion	$26.59
DraftKings	DKNG	$12.95 billion	$28.14

In the following sections, we will provide more information about each of these companies, their business models, financial performance, growth prospects, and risks and challenges.

Top 5 Gambling Stocks by Market Cap

Las Vegas Sands (LVS):

Las Vegas Sands Corp. is a Fortune 500 company and the leading global developer of destination projects that feature premium accommodations, world-class gaming, entertainment and retail malls, convention and exhibition facilities, celebrity chef restaurants and other amenities. 

The company’s business model is focused on developing and operating integrated resorts that offer a variety of amenities, such as gaming, entertainment, dining, retail, convention, and hotel facilities. Some of the company’s iconic brands include The Venetian, The Palazzo, Marina Bay Sands, and Sands Cotai Central. The company’s competitive advantages include its scale, geographic diversification, strong cash flow generation, and ability to reinvest in its properties and new markets.

In the fourth quarter of 2022, Las Vegas Sands reported revenue of $1.12 billion, a decrease of 40.7% from the same period in 2021. The decline was mainly due to the impact of the COVID-19 pandemic on travel and tourism demand in all of its markets. However, the company also saw some signs of recovery, especially in Singapore, where its revenue increased by 18.4% year-over-year. The company’s adjusted property EBITDA was $222 million, compared to $251 million in the prior year quarter.

For 2023, Las Vegas Sands expects to see a gradual improvement in its business performance as travel restrictions are eased and vaccination rates increase. The company also plans to continue investing in its existing properties and exploring new opportunities in emerging markets, such as Japan and Korea.

Flutter Entertainment (FLTR):

Flutter Entertainment is a global leader in online sports betting and gaming, with over 13 million customers across more than 100 international markets. The company’s portfolio of brands includes FanDuel, Sky Betting & Gaming, Sportsbet, Paddy Power, Betfair, PokerStars, and FOX Bet. The company’s business model is based on offering a diverse range of products and platforms that cater to different customer segments and preferences. 

In September 2023, Flutter Entertainment held a market capitalization standing at $29.73 Billion. This impressive valuation ranks the company as the 586th most valuable globally, based on market cap rankings. 

Some of the company’s competitive advantages include its market-leading positions in key regions, its strong brand recognition and loyalty, its innovative technology and data capabilities, and its responsible gambling initiatives.

In the first half of 2022, Flutter Entertainment reported revenue of £3.03 billion, an increase of 99% from the same period in 2021. The growth was driven by strong performance across all of its divisions, especially in the US, where its revenue increased by 159%. The company’s adjusted EBITDA was £684 million, an increase of 108% year-over-year.

Flutter Entertainment anticipates further growth in both revenue and market share within its primary markets throughout 2023, while also venturing into new regions. The company is committed to refining its products and elevating the user experience by fostering innovation and allocating resources for investment.

Evolution Gaming (EVO):

Step into the dynamic world of Evolution Gaming, the frontrunner in delivering live casino experiences for digital gaming enthusiasts. From the thrill of live dealer games and captivating game shows to the spin of slots and the unpredictability of RNG games, they broadcast it all from their global studios. 

Rather than going solo, Evolution Gaming thrives on collaborations with online gaming titans, presenting them with a tailored suite of games that resonate with diverse markets and tastes. What sets them apart? Stellar profit margins, the agility to scale operations without breaking the bank, a relentless drive for innovation, and a clientele that keeps coming back for more.

In the third quarter of 2022, Evolution Gaming reported revenue of €256.7 million, an increase of 48% from the same period in 2021. The growth was driven by increased demand for its products across all regions and segments. Come September 2023, Evolution Gaming stands tall with a market capitalization of $20.84 Billion. This impressive figure not only showcases its financial prowess but also ranks it as the 826th most valuable company globally in terms of market cap. 

In 2023, Evolution Gaming is poised to uphold its dominance in the live casino market while seizing the expanding prospects within the online gaming sector. The company is gearing up to roll out innovative products and features, aiming to amplify its game assortment and deepen player engagement. 

Aristocrat (ALL):

Aristocrat, a gaming tech titan that reigns supreme both in land-based casinos and the digital realm. From state-of-the-art gaming machines to immersive digital adventures, Aristocrat crafts experiences that keep players riveted. Their strategy? A seamless blend of innovation and distribution, reaching everywhere from bustling casinos and local pubs to online arenas and social gaming hubs. 

In the first half of 2022, Aristocrat reported revenue of A$2.23 billion, an increase of 1.7% from the same period in 2021. The growth was driven by strong performance in its digital segment, which offset the decline in its land-based segment due to the COVID-19 pandemic.

The company’s EBITDA was A$750.3 million, a decrease of 6.9% year-over-year. By September 2023, Aristocrat boasts a market capitalization of $17.44 Billion. This impressive valuation ranks the company 940th on the global list of most valuable companies in terms of market cap.

For 2023, Aristocrat expects to see a recovery in its land-based segment as the pandemic situation improves and gaming venues reopen. Simultaneously, the company is poised to amplify its digital footprint, introducing fresh games and branching out to novel markets and platforms.

DraftKings (DKNG):

DraftKings, an avant-garde in the digital sports entertainment and gaming world, offers daily fantasy sports, sports betting, online casino, and iGaming products in the US and internationally. The company’s business model is based on attracting and retaining customers through its engaging content, innovative technology, and personalized experiences.

What sets DraftKings apart? A brand that resonates, a community of passionate users, a mosaic of revenue avenues, and a knack for forging game-changing partnerships and acquisitions.

In the fourth quarter of 2022, DraftKings reported revenue of $855 million, an increase of 81% from the same period in 2021. The growth was driven by strong customer retention and monetization in existing states, the successful launches of its products in new jurisdictions, and structural sportsbook hold improvement. The company’s adjusted EBITDA was $329 million, compared to $234 million in the prior year quarter.

In 2023, DraftKings is optimistic about witnessing an uptick in its business trajectory, buoyed by the relaxation of travel curbs and a surge in vaccination coverage. Simultaneously, the firm is geared up to amplify its investments in current ventures and cast its net into promising markets like Japan and Korea.

Ending Note

The gambling industry, often seen as a game of chance, has proven to be a strategic play in the stock market. In diving deep into their business models, strengths, financial trajectories, and growth avenues, we’ve painted a comprehensive picture of these market leaders. 

Yet, it’s essential to remember that the insights shared here are but a snapshot. The dynamic world of gambling stocks is influenced by a myriad of factors, from regulatory shifts and market trends to technological innovations and societal perceptions.

While this article sheds light on the gambling industry’s luminaries, it’s crucial for investors to tread with caution. The stock market, much like a casino, has its highs and lows. Due diligence, research, and a keen understanding of the industry’s nuances are paramount.

Remember, in the world of investments, it’s not just about playing the game; it’s about playing it right.