Most of the major casino companies are also struggling.
Worries about an economic slowdown are hurting these stocks as persistent inflation and a possible recession have led investors to question if gamblers will bet less.
Still, some experts are optimistic that a comeback could be in the cards. After all, the NFL season is around the corner, with week 1 kicking off right after Labor Day.
“We are in a strong position from a competitive perspective as we approach the beginning of the NFL season,” DraftKings CEO Jason Robins said after the company reported earnings earlier this month. “We remain well-capitalized, ready to enter new markets as they become live, and confident in our ability to compete and win with customers.”
Wagering on a big financial touchdown
According to the American Gaming Association, 30 states and Washington, DC, have legalized some form of sports betting. The gambling industry got a big lift earlier this year when online betting went live in New York.
Others in the business believe that demand for online betting will continue to grow — and that the start of the NFL season will give the entire industry a lift.
“With week 1 of the NFL season — the seasonal peak of interest in US sports and sports betting — you’re going to see an absolute explosion in betting activity and revenue in the legal sports betting market,” he added.
Gillespie also said that even if consumers worried about a recession decide to not go to Las Vegas for vacation, they may still decide to “engage in sports betting through their phones from home.”
But some investment pros still prefer the brick and mortar casinos, most of which have sportsbooks on site. The hope is that US tourism will continue to pick up— to Las Vegas in particular — now that more people are vaccinated and Covid-19 fears have started to wane.
“I really like Caesars. Heading into football season, there should be a boost for casinos and sports betting,” said Lamar Villere, portfolio manager with Villere & Co., which owns Caesars stock. Caesars operates several casinos in Las Vegas as well as in Reno, Nevada.
“Caesars is a pure domestic play,” Villere said. “You don’t have to worry about what’s happening with China and Macao.”