Amid the increasing legalization of online gambling across several states, some stocks are flying high while others are tanking. As such, we think It is wise to buy International Game (IGT) in the gambling space, given its strong financials and growth potential, but to avoid DraftKings’ (DKNG) because its weak financials make it a risky bet now.Gambling companies, especially those offering online gambling services, generated significant returns over the past year as gamblers depended largely on online games given that physical casinos were closed. And with the increasing legalization of online gambling across the U.S. , many companies in this space are well positioned to benefit.
New York Governor Andrew Cuomo signed a budget legislation on April 19 that includes the framework for New York’s online sports betting plan, making online sports betting legal in New York. According to ResearchandMarkets, the global gambling market is expected to grow at a 7% CAGR over the next four years.
Against this backdrop, we think it could be wise to bet on gambling company International Game Technology PLC (NYSE:IGT) given its solid financials and expansion into Nevada. Conversely, we think it wise to avoid DraftKings Inc. (NASDAQ:DKNG) because its lofty valuations are not in sync with its near-term prospects.