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3 Industry-Beating Casino Stocks to Buy Amid the Pandemic

Mrithunjoy Kaushik
·4 min read

From commercial casinos to sportsbooks, every part of the casino industry has been affected by the coronavirus pandemic. Although majority of the casinos have reopened, traffic continues to be dismal.

Nonetheless, with increased focus on streamlining of cost structures along with optimization of business processes, the industry on a whole has shown some resilience. Notably, companies are focusing on the levels of services and staffing with selective amenities along with enhanced safety and social-distancing protocols in the gaming floor to welcome gamers.

Moreover, with the legalization of sports betting in several states, players are now able to place bets through digital platforms. Some of the popular igaming applications are DraftKings, Barstool, FanDuel, BetMGM, BetRivers, Fox Bet and BetMonarch. Markedly, the applications have been an important medium for gamers to connect, learn and inspire amid the stay-at-home restrictions.

iGaming Business Model a Driving Factor

Although majority of the casinos have reopened with safety protocols, gaming revenues are still very low in comparison to the pre-pandemic levels. In such a scenario, companies are surviving by focusing more on iGaming business operations. Per the American Gaming Association, iGaming revenues have surged 253.6% in July and 199.7% over the first seven months of 2020.

As implementation of the latest technology is likely to drive revenues, many companies are investing heavily in digital initiatives to improve reliability and customer services.

All these positive factors have helped the Zacks Gaming industry grow 39.6% in the past six months compared with the S&P 500’s rally of 25.4%.

Investing in the gaming sector might sound profitable right now. It is worth noting that the industry is currently at the top 41% (with the rank of 103) of the 250 Zacks industries, which hints at further growth.

3 Solid Picks

Here, we have highlighted three stocks that have not only performed better than the industry over the past six months but also boast solid prospects.



Penn National Gaming, Inc. PENN: Penn National is an American operator of casinos and racetracks. Founded in 1982, the stock carries a Zacks Rank #2 (Buy). The stock has returned 499.1% in the past six months compared with the industry’s 39.6% growth. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In terms of the digital platform, the company recently launched its Barstool Sportsbook mobile app in Pennsylvania. Also, the company’s hollywood branded real money iCasino continues to drive revenues. Despite the pandemic, the company is optimistic about the Barstool Sports collaboration with regard to organic customer acquisition and cross-sell opportunities. Notably, the Zacks Consensus Estimate for the company’s current-year earnings has been revised 15.3% upward in the past 60 days.

Churchill Downs Incorporated CHDN: Churchill Downs is a racing, online wagering and gaming entertainment company that primarily operates in Louisville, KY. The company currently carries a Zacks Rank #1. The stock has returned 69.7% in the past six months, compared with the industry’s 39.6% growth.

The company recently gained approval for the launch its first sports betting mobile app in Illinois. Further, the company is in talks to build the new Waukegan Casino in partnership with Rush Street Gaming. Meanwhile, it anticipates launching its retail and online BetAmerica Sportsbook in Colorado and Michigan prior to the year-end, followed by expansion plans in Tennessee by 2021. Nonetheless, the company is focused on sports betting and iGaming business combined with its horse racing wagering platform over the long term. Earnings estimates for 2020 have moved up 4.5% over the past 60 days, depicting analyst optimism regarding the stock’s growth potential.

Red Rock Resorts, Inc. RRR: This gaming development and management company primarily operates in Las Vegas. The stock carries a Zacks Rank #2.

The Zacks Consensus Estimate for its current-year earnings has been revised 36.4% upward in the past 60 days. On a year-over-year basis, its earnings estimates for 2021 indicate year-over-year growth of 103.9%. The stock has returned 84% in the past six months compared with the industry’s 39.6% growth.

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