We recently compiled a list of the 10 Best Casino Stocks to Buy According to Billionaires.In this article, we are going to take a look at where Caesars Entertainment, Inc. (NASDAQ:CZR) stands against the other best casino stocks.
The casino industry has rebounded strongly from the COVID-19 pandemic, due to pent-up demand from gamblers and visitors returning to popular places such as Las Vegas. Brick-and-mortar casinos make a substantial profit from hotel operations, conventions, and other events in addition to the revenues that they make from slot machines and table games. Casino stocks are categorized as consumer discretionary since tourism and gambling spending are strongly correlated with the overall economic condition. According to Market Research Future, the global casino market is projected to grow from $309.54 billion in 2024 to $511.6 billion by 2032, with a compound annual growth rate (CAGR) of 6.48% over the forecast period (2024-2032). Furthermore, in 2023, the casino market was estimated to be worth $290.7 billion.
Regionally, the Asia Pacific Casino market dominates the industry due to the growing availability of online casinos and the average individual’s income. The North American casino market has the second-largest market share due to the legalization of sports betting and the approval of online gambling in the region. Furthermore, the UK casino market grew at the quickest rate in the European region, while the German casino industry held the largest market share.
Macquarie analyst Chad Beynon recently highlighted the significant market reaction to casino industry earnings even though the results were essentially in line with forecasts. After five years of underperformance, the industry saw double-digit stock increases due to improving sentiment, potential interest rate drops, and solid early-year trends. Although Macau’s recovery is still below pre-pandemic levels, gaming revenue is projected to rise by 8% in 2025, outperforming the U.S. market’s flat-to-2% growth. Chinese New Year activity was consistent rather than volatile, showing a healthy demand trend. By bypassing the costs of licensing and regulations, new event-based contracts may pose a threat to established operators. However, Beynon believes that licensed operators will fight back, as they did against sweepstakes and illegal betting. Investor confidence was strengthened by generally favorable remarks regarding recent trends, even if some companies decided not to provide updates during the quarter. The industry is now seen more favorably by analysts after years of weak performance.
Apart from analysts, there are also billionaire investors who remain bullish on the casino stocks. Ken Fisher’s Fisher Asset Management, with a portfolio worth more than $252 billion, has invested in two renowned casino stocks. In Q4 of 2024, Fisher invested more than $201 million and owned more than 2.3 million shares in a high-end casino and hotel operator in the United States. Fisher’s confidence in the market’s long-term potential is proven by the fact that the stock makes up 0.07% of his portfolio. In the same quarter, Fisher also made an investment of more than $153 million in an American multinational hospitality, sports, and entertainment company.
Meanwhile, in Q4 of 2024, Billionaire Carl Icahn’s Icahn Capital LP, which has a $7.4 billion portfolio, showed its trust in the industry by investing over $82 million in the largest casino-entertainment firm in the United States.
10 Best Casino Stocks to Buy According to Billionaires.
A general view of a luxury resort casino, surrounded by a beautiful landscape and illuminated at night.
Our Methodology
For this article, we scanned Insider Monkey’s Q4 2024 proprietary database of billionaires’ stock holdings and identified casino stocks from the list. These companies are involved in operating casinos, online gaming platforms, sports betting, and resort entertainment. From there, we picked the top 10 stocks with the highest number of billionaires having a stake in them. Where two or more stocks were tied on billionaire sentiment, we used the dollar value of billionaire holdings as a tiebreaker between them.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Eldorado Resorts acquired Caesars Entertainment, Inc. (NASDAQ:CZR) in 2020, and the Caesars name was retained. Following the merger, it became the largest casino operator in the United States, with 54 facilities globally, including eight on the Las Vegas Strip. Caesars operates casinos in sixteen states.
The company’s Las Vegas and regional casinos continue to account for the majority of its business, despite its advancements in online gaming. Like other casino operators, it wants to capitalize on its national network by offering a reward program that encourages visits to numerous facilities.
The Q4 and full-year 2024 results of Caesars Entertainment Inc. (NASDAQ:CZR) were recently released, revealing a range of performances across all segments. In Q4, GAAP net revenues were $2.80 billion, a modest drop from $2.83 billion in the same period last year. However, net profits were $11 million, as opposed to a loss of $72 million in the same period last year. The company reported $11.2 billion in net revenues for the entire fiscal year 2024, down from $11.5 billion in 2023, and a $278 million net loss as opposed to $786 million in net profitability. However, the company repurchased $50 million worth of shares and paid off $500 million in debt with the proceeds from the Promenade and WSOP sales.
David Katz, a Jefferies analyst, gave the Caesars Entertainment Inc. (NASDAQ:CZR) stock a Buy rating on February 19 based on multiple variables influencing its potential future performance. Katz is optimistic that these areas will rebound by 2025, despite short-term problems, particularly in the online business segment and regional gaming portfolio, which have been harmed by recent poor sporting events. While the regional portfolio may profit from a more competitive environment and fresh initiatives in specific areas, the digital segment is projected to grow due to improved iGaming performance and reduced promotional expenses. Furthermore, it is anticipated that its activities in Las Vegas will remain steady, supported by an active presence on The Strip and a recovering convention market.
Overall, CZR ranks 6th on our list of the Best Casino Stocks to Buy According to Billionaires. While we acknowledge the potential for CZR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CZR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
