It's an open question whether gambling stocks or gambling in a casino is riskier, but the market does tend to end up in the black. If you like betting but want something that's probably a bit safer than roulette, the stock market may be for you. Here are half a dozen of the top Canadian gambling stocks to consider backing.
Montreal-based payment processor firm Nuvei received the green light from Michigan to provide its services for online sports betting and igaming within the state, increasing to 10 the number of states (including Colorado and Indiana) that Nuvei services in this way. The firm operates in over 200 markets around the world, handling hundreds of currencies and dozens of cryptocurrencies. Online betting, both sports and casino, has trended upwards since the inception of wagering through the internet, and even if the healthcare situation takes a turn for the worst this sort of business is largely unaffected by the direct effects of a pandemic. Players will always have Canadian no deposit bonuses and other promos to turn to.
Indeed, this gambling stock saw activity rise due to more online activity during the height of COVID-19. Due to this, and a good habit of swiftly understanding of technological developments, Nuvei looks to have a bright future. Not only can it handle multiple different types of cryptocurrency, but even NFT (non-fungible tokens) transfers.
Bragg Gaming Group has its headquarters in Ontario's capital city of Toronto and operations across the globe, including North America, Europe, Asia, and Central America. Bragg Gaming is a business-to-business (B2B) gaming technology firm that has business relationships with numerous big names in the igaming sector, such as Mr Green Casino, Entain (formerly GCV Holdings), and many more. Over the last couple of years the price has increased, but year to date there has actually been a decline which may present a buying opportunity for those hunting for a gambling stock in which to invest.
The online focus of Bragg Gaming means that, far from being harmed by the pandemic, this gambling stock's price has increased roughly tenfold due to the robust nature of online betting (and rising interest during the time of the lockdowns in early 2020). Nevertheless, it still has potential for growth for the future.
GameHost is one of the smaller firms on our list of potential gambling stocks in which to invest, but sometimes good things come in little packages. This Canadian casino firm based in Alberta was naturally affected by the pandemic, which spelled trouble for many casinos and ruin for others. However, GameHost defied all expectations and, contrary to the vast majority of real world casino operators, managed to turn a profit In 2020, which is certainly impressive. Earnings did fall, but reduced profits were nevertheless a triumph in the face of the unfolding global healthcare crisis. Is the timing right to invest?
Well, there are arguments for and against, with the argument against that much of the firm's strength has already been priced in (and there's no dividend to make up for this). In addition, debt rose last year. On the positive side of the balance sheet, GameHost was able to retain profitability in 2020 and should only be stronger now things are starting to reopen and vaccination programmes unroll. The price has declined slightly since its July 2021 high which may present an opportunity. As with other brick and mortar gambling stocks, value may be down to how the COVID-19 pandemic goes. If current vaccinations are the beginning of the end, it may be worth a look. If a new variant emerges that resets everything to zero, then the reverse is likely to be true.
Another Canadian gambling stock worth considering is FansUnite Entertainment Inc. FansUnite is a tech company that focuses on sports betting and esports betting, in addition to casino and fantasy sectors. Both sports and esports betting have promising futures, for differing reasons, which may make this a long term value investment, although it must be said the stock price has been a little volatile recently. Why are both sports and esports solid foundations for long term growth?
Sports betting has been widely accepted in Europe for a long time, and a Briton visiting Canada would, until very recently, have been astounded by the parlay limitation on sports betting. However, this restriction has been voted to be removed, and the permitting of single events sports betting instantly and clearly makes sports betting far more attractive for large numbers of people. Just how large the Canadian sports betting market will end up being remains to be seen, but from a near standing start there is substantial scope for growth as the major leagues and domestic sporting contests catch up with the soccer league betting of Europe (which is very significant indeed).
Turning to esports, this mixture of video games and competitive team sports proved incredibly resilient during the initial pandemic lockdowns that saw sporting schedules disrupted almost across the board. Interest in esports soared on both a spectator and betting basis as sports fans and sportsbooks scrabbled to find something to fill the time. Esports were already growing significantly, and this only increased the attention the sporting category was receiving. While the return of regular sports has seen some drop off in attention, esports nevertheless received a shot in the arm from the surge in viewing and betting, and still has a lot of long term growth to go. On both levels a firm like FansUnite can expect a bright future.
Another top gambling stock to consider is Great Canadian Gaming Corp. This Canadian firm has its finger in many a pie, including slot machines and horse racing tracks, plus hotels. The brick and mortar gambling sector was hit hard by the pandemic, and Great Canadian Gaming Corp was just as affected as everyone else. Revenue slumped to $442m from over $1.3bn. Real world casinos are just about the most imperfect business for a pandemic as they combine a completely recreational activity with packing people in close proximity to one another, and frequently exchanging items (chips, cards etc).
The worst year of the pandemic, 2020, saw the firm slip from the black into the red, but thanks to very prudent financial management, Great Canadian Gaming Corp had wisely saved enough funds to see it through rainy days (or rainy years) and stayed liquid. And even if the economy takes longer to open up than many expect and hope, the firm still has enough in the bank to keep going.
While other concerns have folded or made cutbacks, this firm is well-placed to bounce back when things gradually return to normal. The Ontario casinos are already returning to business, with all necessary precautions. It's also the potential target for an acquisition by Apollo Global Management, so keep a close eye on that deal as opportunities for value may occur if it fails and the price tanks.
And so we come to our number one slot on top gambling stocks in Canada to back: Score Media and Gaming. Past performance is no guarantee of future success, but, generally speaking, one would much rather have a stock that has a pattern of success than a streak of failure. And on that measure, Score Media and Gaming has done very well indeed. In 2020 this Canadian gambling stock more than doubled in value, and prospects for the future are very promising too. The firm has a foothold in both the USA and Canada, and both countries are gradually opening up sports betting online. With large, prosperous, and internet-connected populations there is a clear and huge potential for this market to balloon both sides of the border, and Score Media and Gaming is in a great place to contend for a significant slice of the market in Canada (and the USA).
One key advantage that Score has over some of its rivals is a pre-existing customer base due to its sports fantasy business. The substantial overlap between players of fantasy leagues and sports bettors means that this stock does not have to make a standing start but instead has plenty of momentum, recognition, and regular users. With Canada recently voting to enable single event sports betting (ending the parlay restriction that made things far less attractive for would-be bettors) there's going to be a lot more interest in betting on sports. Similarly, sports betting is being legalized state by state, and, although there are a few holdouts, the vast majority of US states should soon be able to partake in sports betting.
The only potential downside to buying Score Media and Gaming is that it may be currently overvalued, but the long term growth prospects do appear to be very strong. In August 2021 it was acquired by Penn National Gaming for US$2bn which sent its stock price soaring.
And that covers our list of top Canadian gambling stocks to back, from brick and mortar casinos to the online world. As we saw with our article on the iGaming stocks on the rise after legalized sports betting, there are a lot of positive trends at the moment. However, just as with betting, only ever invest what you can afford to lose.