In this piece, we will take a look at the 15 best casino stocks to buy heading into 2024. If you want to skip our introduction to the hospitality and gaming industries, then take a look at 5 Best Casino Stocks To Buy Heading Into 2024.
Even though it's been four years since the initial outbreak of the coronavirus pandemic, its impact on the world is still being felt. Whether its industries such as travel and tourism that have now begun to operate at levels before the outbreak, or economies that are becoming comfortable with high inflation levels, life as 2023 comes to an end is quite different than that just a handful of years back.
One industry that was hit hard by the virus is the casino industry. Casinos, if you're unfamiliar, have jam packed floors with countless games and thousands of players testing their luck. Naturally, this environment goes against social distancing, and any drop in foot traffic hits casinos hard. The dropping revenues are particularly painful for this sector since casino owners often spend millions of dollars to build their establishments, and most of the funding comes through loans whose repayment depends on stable and healthy cash flow growth.
However, with the virus behind us and the economy remaining resilient, the casino and gaming industry is also experiencing a resurgence in revenue. Data from the Nevada Gaming Control Board shows that casino winnings stood at $1.2 billion in August 2023, which marked a slight 7% increase. When we compare the latest winnings with those of August 2020 - right when lock downs started to come down in full force - the latest figures mark a 63% growth over that month's $743 million without incorporating inflation. At the same time, the winnings for August 2019 - the last month in the pre-covid era - were $954 million, indicating that the Nevada industry is booming and has surpassed previous high winnings levels.
Another report that shows the strength in the casino industry is the States of the States report. Published by a gambling industry advocacy group, the report for this year's second quarter shows that commercial gaming revenue in the U.S. stood at $16.07 billion. According to its publisher, the AGA, this marked the tenth consecutive quarter of revenue growth, and when read in parallel with the data from the Nevada board, the figures show that the casino industry is well on its way to recovery after dealing from historic shocks. In fact, gaming revenue for Q2 was the second highest grossing quarter in the industry's history, and it only fell short of the Q1 figures of $16.60 billion. A deeper look at this data shows that table game revenue dropped by 2% annually, and the broader growth percentage was driven by the surge in sports betting and online gaming. The two segments grew by 58.5% and 22.5%, respectively, while the remaining segment, slots, posted 2.2% annual growth for $8.8 billion in annual revenue.
Finally, an on ground perspective of the gambling industry's performance in the second quarter of 2023 comes from the management of Wynn Resorts, Limited (NASDAQ:WYNN) who shared in the firm's latest earnings call:
I see tremendous value in our business, and I know our brightest days are ahead of us. Our path is the clearest it has been in years, and our team is committed and energized. Turning to the quarter, and starting in Vegas. Wynn Las Vegas delivered $224 million of adjusted property EBITDAR. On a hold-normalized basis, our EBITDA was up 3% on a very difficult year-over-year comp. We saw strength all over the place; the casino, the hotel, the restaurants, retail, you name it. All supported by a consumer that seems more than willing to continue spending on unique luxury experiences. Now, we obviously have a very particular customer type, skewing heavily to luxury; and we continue to closely monitor whether or not interest rates and inflation begin to impact that consumer, but so far, so good.
With these details in mind, let's take a look at the best casino stocks for 2024. Some notable picks are Las Vegas Sands Corp. (NYSE:LVS), Caesars Entertainment, Inc. (NASDAQ:CZR), and MGM Resorts International (NYSE:MGM) and for more about casino stocks and companies, you should check out 12 Most Profitable Casinos in the World and 10 Casino Stocks that Pay Dividends.
15 Best Casino Stocks To Buy Heading Into 2024
Pixabay/Public Domain
Our Methodology
To compile our list of the best casino stocks to buy heading into 2024, we first made a list of all casino companies that are publicly traded on U.S. exchanges. Then, the number of hedge funds that had invested in them as of Q2 2023 end was determined through Insider Monkey's database of 910 funds and the top 15 casino stocks are as follows.
Bally's Corporation (NYSE:BALY) operates hotels and casinos in several American cities. The firm's second quarter results saw it $606 million in revenue for a 9.7% annual growth. Casinos and resorts accounted for more than half of the sales and marked a $33 million growth.
By the end of June 2023, 15 hedge funds part of Insider Monkey's research out of the 910 surveyed were Bally's Corporation (NYSE:BALY)'s investors.
Golden Entertainment, Inc. (NASDAQ:GDEN) is an American firm headquartered in Las Vegas, Nevada. The firm has struggled on the financial front as of late since it has missed analyst EPS estimates in all four of its latest quarters. The stock is still rated Buy on average, but worries about a slowdown in consumer spending affecting the firm's outlook still persist.
As of Q2 2023 end, 16 out of the 910 hedge funds part of Insider Monkey's database had held a stake in Golden Entertainment, Inc. (NASDAQ:GDEN). Out of these, the firm's biggest shareholder is Scott Ross' Hill Path Capital since it owns one million shares that are worth $44.6 million.
Monarch Casino & Resort, Inc. (NASDAQ:MCRI) is a Nevada based company that operates casinos in Colorado and Nevada. Its stock is rated Strong Buy on average and analysts have penned in a $13 share price upside based on the average share price target.
During 2023's June quarter, 19 hedge funds out of the 910 tracked by Insider Monkey were the firm's investors. Monarch Casino & Resort, Inc. (NASDAQ:MCRI)'s largest hedge fund shareholder is Israel Englander's Millennium Management due to its $15.4 million stake.
PlayAGS, Inc. (NYSE:AGS) is a backend casino company. It slot machines, card shufflers, and other associated products. A growth in casino revenues, particularly in the slot segment, seems to have helped the company too since it has beaten analyst EPS estimates in all four of its latest quarters.
Insider Monkey's second quarter of 2023 survey covering 910 hedge funds revealed 22 PlayAGS, Inc. (NYSE:AGS) shareholders. Don Morgan's Brigade Capital is the largest investor among these, owning $10.6 million worth of shares.
Light & Wonder, Inc. (NASDAQ:LNW) is another backend casino company that provides gaming machines, tables, and other products. The firm expanded its presence in the budding online gambling market in August 2023 after it bought an ownership stake in a digital gaming company.
As of June 2023, 22 out of the 910 hedge funds part of Insider Monkey's database had held a stake in the company. Light & Wonder, Inc. (NASDAQ:LNW)'s biggest shareholder is Debra Fine's Fine Capital Partners through a $616 million stake.
Inspired Entertainment, Inc. (NASDAQ:INSE) sells gaming terminals and software to casinos. It also sells sports games. The firm scored a win in May 2023 when it extended its agreement with a British company to provide virtual sports to betting companies.
By the end of 2023's second quarter, 24 hedge funds among the 910 tracked by Insider Monkey had invested in Inspired Entertainment, Inc. (NASDAQ:INSE). Out of these, the firm's largest stakeholder is Ari Zweiman's 683 Capital Partners since it owns 1.7 million shares that are worth $25.7 million.
9. Gaming and Leisure Properties, Inc. (NASDAQ:GLPI)
Number of Hedge Fund Investors In Q2 2023: 28
Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) is a real estate investment trust that provides properties to casinos. It was added to the S&P MidCap 400 index in September, and the stock is rated Buy on average with multiple Outperform ratings in August 2023.
28 out of the 910 hedge funds part of Insider Monkey's June quarter of 2023 database were Gaming and Leisure Properties, Inc. (NASDAQ:GLPI)'s shareholders. Jeffrey Gates' Gates Capital Management is the biggest investor among these courtesy of its $126 million stake.
8. Melco Resorts & Entertainment Limited (NASDAQ:MLCO)
Number of Hedge Fund Investors In Q2 2023: 29 Melco Resorts & Entertainment Limited (NASDAQ:MLCO) is a Hong Kong based company with resorts and casinos in Cyprus, Macau, and other regions. When compared to some of the larger casino firms on our list, it has been performing quite well financially as of late by having beaten analyst EPS estimates in all of its four latest quarters. By the end of this year's second quarter, 29 out of the 910 hedge funds tracked by Insider Monkey had bought a stake in the company. Out of these, the biggest Melco Resorts & Entertainment Limited (NASDAQ:MLCO) investor is Ken Griffin's Citadel Investment Group through a stake worth $130 million.
International Game Technology PLC (NYSE:IGT), as the name suggests, is a gaming technology company that provides products such as management and customer relationship software to casinos. It joined forces with Caesars in August 2023 by providing a custom game for Caesars Palace Online Casino.
As of June 2023, 32 among the 910 hedge funds profiled by Insider Monkey had held the firm's shares. International Game Technology PLC (NYSE:IGT)'s largest shareholder is Israel Englander's Millennium Management since it owns $59.8 million worth of shares.
Everi Holdings Inc. (NYSE:EVRI) provides software products and games to casinos. Like other backend casino companies, the firm has done quite well as it had beaten analyst EPS estimates in three out of its four latest quarters.
After digging through 910 hedge funds for their Q2 2023 shareholdings, Insider Monkey found that 33 had bought a stake in Everi Holdings Inc. (NYSE:EVRI). Jeffrey Jacobowitz's Simcoe Capital Management is the biggest stakeholder out of these due to its $57.6 million investment.
Las Vegas Sands Corp. (NYSE:LVS), Everi Holdings Inc. (NYSE:EVRI), Caesars Entertainment, Inc. (NASDAQ:CZR), and MGM Resorts International (NYSE:MGM) are some best casino stocks that hedge funds are buying.
