The common consensus is that the stock market is a risky proposition and akin to gambling because you never know what you are going to get! This might be true to a new investor, but it certainly isn’t true for investors who are willing to take the time to do their homework, study the market, and make a calculated investment.
Positive outcomes seem to be guaranteed
Why are iGaming Stocks Attractive?
One of the markets that are very attractive is the global iGaming market. iGaming or online gaming is a multi-billion-dollar market that is witnessing explosive growth throughout the world. Statista showed that global online gambling generated $45 billion in 2016 and spiked to $56 billion in 2018. The market is expected to nearly double in the next couple of years as multiple governments across the world are in the process of lifting the ban on online gambling.
Gambling operators are eager to enter the iGaming market and expand their presence because it does not require massive investment to do so – especially when compared to setting up a land-based casino that requires millions and sometimes billions of dollars to do so! The biggest challenge for iGaming operators is getting a license!
The setup and infrastructure costs are negligible especially to the top iGaming operators. Given the fact that the biggest companies are making up over 80% of the market share, they tend to not only dominate the market they enter but also provide a solid base for investors.
Future of iGaming Stocks
Most serious investors are looking for stocks that will pay them big dividends over a long period of time. This is why iGaming stocks are perfect because the global market is only now opening up and will take at least a decade before it even gets into its full potential.
The reason for this is because the majority of countries around the world have been reluctant for many years to open their doors to iGaming operators. They have archaic laws in place which ban all forms of online gambling as they consider it to be a social evil.
All that is now changing as governments across the world are beginning to realize just how lucrative the online gambling market is and how much revenue they can derive by legalizing iGaming in their respective jurisdictions.
The best example of this is when the Supreme Court made a decision in favour of New Jersey and decided to repeal Professional and Amateur Sports Protection Act of 1992 (PASPA). This was the law that banned sports betting in America for a number of years. Once PASPA was overturned, it was left to each state to decide whether they wanted to legalize sports betting!
New Jersey wasted no time in legalizing sports betting and today online sports betting accounts for the majority of sports betting wagers in the Garden State. iGaming operators have their attention on the U.S. market as well as numerous markets around the world including India, Japan, and China as it is just a matter of time before they will be in a position to launch online gambling services.
Which Companies Should You Consider?
With so much market potential waiting to be tapped into, iGaming operators are waiting to jump in and claim as much market share as possible as soon as they get a license to operate. Smart investors will be able to read the markets and know which iGaming operators they need to invest in in order to be ready to ride the wave!
We think it is always wiser to stick with some of the big players in the iGaming market because of their reputation, past history, and the fact that the big boys always dominate any new market they enter into. The companies that you should have on your investment radar include the likes of GVC Holdings Plc which has a net value of over $4.4 billion, the Stars Group which owns the biggest online poker website in the world PokerStars and has an estimated value of over $2 billion.
International Game Technology ($4.8 billion), Paddy Power Betfair ($2.6 Billion), bet365 ($4 billion), and Scientific Games ($3.3 billion) are some of the other big names in the industry.
Investors who have backed these companies in the past have witnessed a good return as some of these companies have completed major mergers and acquisitions that have provided their shareholders a strong return on investment.
What Are the Dangers of Investing in iGaming?
So far, we have painted a positive picture of investing in iGaming stocks, but we are going to finish by giving you a few areas that you need to research and consider while investing in iGaming stocks. This is to keep you well informed into what exactly you are getting into and what are the red flags you need to be watching out for at all times.
Licensing Issues: The biggest hindrance to the growth of all iGaming companies is without doubt licensing regulations. If you are investing in a company that is pushing to get a license in a certain country and is confident of doing so but suddenly gets rejected, expect share prices to take a dive. The same could be true when an iGaming company suddenly gets its existing license restricted or revoked for breaching iGaming regulations.
Fines And Penalties: Online gambling regulators like the UK Gambling Commission (UKGC) are now taking a very stringent stand against iGaming operators who fail to comply with regulations. The UKGC is rolling out heavy fines totally millions of dollars and slapping strict penalties on operators which can cause a shakeup in the market and impact share prices.
Advertising Bans: iGaming operators rely heavily on marketing and advertising to stay ahead of the competition and keep their revenues high. Multiple countries like Italy are invoking gambling ad bans to protect their citizens and minors from gambling harm. Cramping online gambling advertisements can dent gambling profits and share values.
Do keep these tips in mind while investing in online gambling stocks!