Introduction

The start of the NFL season is anticipated to lead to a surge in sign-ups and activity on sports gambling apps, presenting significant upside for stocks related to the industry, according to Wall Street analysts.

The NFL Season and Gambling

The NFL season commenced with the Detroit Lions defeating the Kansas City Chiefs on Thursday. With 15 more games scheduled for Sunday and Monday, gambling is expected to be a popular topic on pregame shows and frequently promoted during commercial breaks.

Gaming Stocks with Potential Upside

Several gaming stocks have buy ratings from over 60% of analysts and are projected to have upside to the average price target of more than 20%, as per FactSet data. One such stock is Caesar’s Entertainment, which has the highest potential upside on the list, with an average price target 37% above its most recent closing price.

Ceasar’s Entertainment: Beyond Online Sportsbook

Barclays analyst Brandt Montour highlighted that Caesar’s Entertainment could experience a surge in non-sports online gambling. The recent launch of its new stand-alone iGaming app is expected to drive significant gains over the next 12 months. Montour believes that Caesar’s current market share in iGaming is unusually low compared to its retail casino footprint, loyalty, and expertise, and with continuous momentum in product development, it is likely to rise in the coming months.

MGM Resorts International: Diversified Gaming Portfolio

Another company with a diversified gaming portfolio is MGM Resorts International, which also shows potential with a 33% upside, according to FactSet data. Montour mentioned that BetMGM, the market leader in active states, excels in content breadth, particularly in slots, aligning well with its casino-first customer database, brand, and land-based presence.

Churchill Downs: Minor Revenue from Online Betting

Despite its online betting platform TwinSpires representing a small portion of its revenue compared to the Kentucky Derby, Churchill Downs receives a buy rating from all analysts covering it, according to FactSet data.

Historical Performance of Gambling Stocks during NFL Season

Past trends show that gambling stocks tend to struggle once the NFL season starts. However, it is important to note that the sample size is limited due to the recent legalization of online betting in the U.S. DraftKings, a market leader, achieved strong results during the opening weeks of the season last year, indicating the potential for positive outcomes.

Conclusion

The NFL season is expected to drive increased activity in sports gambling apps, offering potential opportunities for gaming stocks. Caesar’s Entertainment, MGM Resorts International, and Churchill Downs are among the stocks with favorable ratings from analysts. While historical data suggests challenges for gambling stocks during the NFL season, there have been instances of success. DraftKings remains a top pick in gaming according to Needham analysts.

— ‘s Michael Bloom contributed reporting.