5 Stocks to Benefit From NCAA Basketball Tournament
The 2023 National Collegiate Athletic Association (“NCAA”) Division I Men's Basketball Tournament kicked off on Mar 14 with 68 teams, spreading “March Madness” among millions of Americans. Though it will divert a large number of Americans from the stock market and dry up trading volumes, it will lead to a buying frenzy and strong stock gains.
The champion will be crowned on Apr 3 at NRG Stadium in Houston, TX. Being the biggest modern sporting event in the United States, the tournament is a money-spinner for sports-betting companies, sponsors, media networks (TV and digital) and networking players, attracting billions of revenues in just three weeks.
As such, investors can easily basket some gains from the three-week sports-betting extravaganza by jumping into the stocks in these spaces. DraftKings Inc. DKNG, Caesars Entertainment CZR, Coca-Cola KO, AT&T Inc. T and Capital One Financial Corporation COF could make for an exciting March Madness game.
Sports betting has never been more accessible to Americans than in recent years, as gambling is now legal in more states and growing in popularity. The legalization of sports betting across the United States has increased significantly since 2019, with online gambling now legal in 33 states and Washington, DC.
According to the American Gaming Association, about one-quarter of all American adults are poised to collectively bet $15.5 billion on this year’s NCAA men’s Division I basketball tournament. A survey reveals that about 68 million American adults will place bets on March Madness this year, with the vast majority — 56.3 million — planning to participate in a bracket contest.
As many as 31 million Americans will place a traditional wager online, with a retail sportsbook, or with a bookie, while another 21.5 million plan to bet casually with friends. The figures represent a significant jump from the 45 million Americans projected to wager $3.1 billion on March Madness last year.
Additionally, sponsors invest millions in advertising and marketing the March Madness phenomenon and are expected to gain traction from the competition. The TV media companies are also expecting their lucrative year with CBS Sports and Warner Bros. Discovery Sports continuing to score maximum revenues from the event by broadcasting through four networks, CBS, TNT, TBS and truTV.
Stocks to Bet on
DraftKings is the only U.S.-based vertically integrated sports betting operator. DraftKings is a multi-channel provider of sports betting and gaming technologies, powering sports and gaming entertainment for 50 operators across more than 15 regulated U.S. and global markets, including Arkansas and Oregon in the United States. DraftKings' Sportsbook offers mobile and retail betting for major U.S. and international sports and operates in the United States pursuant to regulations in Colorado, Illinois, Indiana, Iowa, Mississippi, New Hampshire, New Jersey, New York, Pennsylvania, Tennessee and West Virginia.
The stock has an estimated earnings growth of 34.5% for this year and has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Caesars Entertainment is a diversified gaming and hospitality company with its primary source of revenues being generated through gaming operations that include mobile, online gaming and sports betting. The company’s earnings are expected to grow 131.9% this year.
Caesars has a Zacks Rank #2 and VGM Score of A.
CocaCola Company manufactures, markets and sells various nonalcoholic beverages worldwide. It provides sparkling soft drinks, sparkling flavors; water, sports, coffee, and tea; juice, value-added dairy, and plant-based beverages; and other beverages. CocaCola is one of the top three sponsors of NCAA March Madness and its no-calorie beverage — Coke Zero — is the lead soft-drink brand in the tournament.
Coca-Cola has an estimated earnings growth of 4.8% for this year and a Zacks Rank #3 (Hold).
AT&T is the second-largest wireless service provider in North America and one of the world’s leading communications service carriers. It is also one of the top three sponsors of NCAA March Madness. AT&T is sponsoring a Block Party the Friday of the Final Four weekend as part of the March Madness Music Festival.
AT&T has a Zacks Rank #3 and VGM Score of B.
Capital One is primarily focused on consumer and commercial lending as well as deposit origination. It is the presenting sponsor for the NCAA’s official bracket challenges for the tournament. Capital One will also sponsor March Madness Fan Fest and the March Madness Music Festival during the weekend of the men’s Final Four in Houston.
Capital One has a Zacks Rank #3 and VGM Score of B.
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AT&T Inc. (T) : Free Stock Analysis Report
CocaCola Company (The) (KO) : Free Stock Analysis Report
Capital One Financial Corporation (COF) : Free Stock Analysis Report
Caesars Entertainment, Inc. (CZR) : Free Stock Analysis Report
DraftKings Inc. (DKNG) : Free Stock Analysis Report
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