Roll the Dice on These 3 Gambling Stocks for Big-Win Potential
With both the Chinese gambling hub of Macau and Las Vegas casinos doing very well, this is an excellent time to buy the top gambling stocks. In Macau, gross gaming revenue (GGR) soared 400% last month versus the same period in 2022 to $2.42 billion. That marked the region’s highest monthly GGR since the pre-pandemic period. Meanwhile, in September, the gambling revenue of the Las Vegas Strip jumped 6.9% year-over-year to $741 million.
Also noteworthy is that the city’s casinos and hotels likely benefited a great deal from the huge Formula 1 Las Vegas Grand Prix auto race, held in Las Vegas from Nov. 16 to Nov. 18. Also very likely to help casinos and hotels in the area is the upcoming CES tech conference in January, which should be bigger than ever, given the excitement over artificial intelligence (AI). The Super Bowl will also happen in Las Vegas in February. On top of all that, online sports gambling has become huge, as legal U.S. wagers on sports jumped 33% in Q3 versus the same period in 2022.
MGM Resorts (MGM)
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MGM Resorts (NYSE:MGM) reported very strong third-quarter results on Nov. 8, as the casino owner’s revenue jumped 16% versus the same period a year earlier, and its net income came in at an impressive $161 million, versus a loss of $577 million in Q3 of 2022.
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BetMGM, the company’s online betting joint venture, generated $13 million in profits for MGM last quarter. With BetMGM growing very rapidly and continuously expanding to new markets, the venture’s contribution is likely to easily constitute 15% to 20% of the parent company’s bottom line within the next year.
Meanwhile, MGM is opening a new casino and hotel in Japan and looks poised to obtain a casino license in New York. Both of those markets should become very lucrative needle movers for the company.
Changing hands at a very reasonable 21 times analysts’ average 2024 earnings per share estimate, MGM stock has an attractive valuation, solidifying its status as one of the top gambling stocks to buy.
Melco Resorts (MLCO)
Source: Shutterstock
Melco Resorts (NASDAQ:MLCO) is getting a big boost from the rejuvenation of Macau, as the lion’s share of its revenue comes from the region.
Indeed, last quarter, the company’s operating revenue soared 321% year-over-year to $1 billion, while its operating income came in at $94.7 million versus an operating loss of $198.5 million in Q3 of 2022.
Also encouragingly, CEO Lawrence Ho, speaking on the company’s Q3 earnings call on Nov. 7, said, “We’re feeling good about Macau. And travel and tourism is the leading sector in China right now.” He added, “I think after 3 years of being not being able to travel during COVID, people are coming to Macau in force.”
The forward price-earnings ratio of MLCO stock is a very low 10.
Wynn Resorts (WYNN)
Source: Richie Chan / Shutterstock.com
Wynn Resorts (NASDAQ:WYNN) is benefiting tremendously from the huge rebound of Macau and the continued strength of Las Vegas.
The firm’s revenue from Las Vegas climbed $74.6 million versus the same period a year earlier to $544.4 million, while its Macau sales advanced by $450 million to $524.8 million.
Wynn’s overall EBITDAR, excluding some items, soared by $356.9 million to $530.4 million.
“Looking ahead, we have a strong pipeline of forward group demand, very healthy gaming market share and a robust programming calendar with F1 and Super Bowl just ahead of us,” CEO Craig Billings stated on the company’s Q3 earnings call, held on Nov. 9.
In September, research firm Trefis estimated that the value of WYNN stock was about $109, well above its current level of around $84.
On the date of publication, Larry Ramer held a long position in MGM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.
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