3 Sports Betting Stocks with Jackpot Potential the top sports betting stocks have been underperformers thus far in 2021,, which means investors can grab shares while they are well off of their high...

By Sean Sechler

entrepreneur daily

This story originally appeared on MarketBeat

Depositphotos.com contributor/Depositphotos.com - MarketBeat

With the way that the sports betting market continues to grow in the United States, there are going to be plenty of opportunities for companies to establish themselves as leaders in this burgeoning industry in the coming years. Bettors are quickly becoming more accustomed to handling their business online, new states are voting to legalize sports betting seemingly every month, and live sports are set to come back in full force this year following the pandemic. All of this adds up to a strong bull case for sports betting stocks at this time.

It's worth noting that many of the top sports betting stocks have been underperformers thus far in 2021, which means investors can grab shares while they are well off of their highs. There's also the fact that football season is set to kick off again in September and could be the perfect catalyst to get these stocks going again. That's why we've put together a brief overview of 3 sports betting stocks with jackpot potential to help you identify some of the top investment opportunities in the industry. Let's take a deeper look below.

Draftkings (NASDAQ: DKNG)

One of the first names that come to mind when thinking of sports betting stocks is Draftkings, a digital sports entertainment and gaming company that operates daily fantasy sports, sports betting, and online casino platforms. The stock is trying to reclaim the 200-day moving average at this time and could be a nice buying opportunity ahead of the upcoming football season given that so many sports bettors love using the company's platform to spice up their viewing.

Draftkings has been making some interesting acquisitions lately including the recent deal to acquire Golden Nugget Online Gaming in an all-stock deal valued at approximately $1.56 billion, which will eventually allow the company to move into the lucrative Nevada sports wagering market. The company is also experiencing strong top-line growth at this time, as Draftkings recently reported Q2 revenue of $298 million, up 320% year-over-year, which is another strong reason to consider adding shares.

Penn National Gaming (NASDAQ: PENN)

Next up is Penn National Gaming, another business that is nicely positioned to capitalize on the growing sports betting industry. Penn is intriguing because it owns and manages gaming and racing properties along with retail and online sports betting operations, which means it has a fairly diversified business model. The company should benefit from widespread vaccination efforts as foot traffic picks up again at its physical locations, but investors should be even more interested in what the company is doing to expand its presence in online sports betting.

Penn National Gaming launched its online sports betting application called Barstool Sportsbook back in 2020 and is aiming to have the application offered in 10 different states by the end of the year. The company also just announced that it has agreed to acquire Score Media & Gaming for roughly $2 billion in cash and stock options, which adds a fully integrated betting and media platform to the company's product set. theScore is the number one sports application in Canada, which means that Penn will immediately expand its sports betting ecosystem in North America after the deal goes through. Finally, Penn National Gaming has an existing loyalty application that has been downloaded hundreds of thousands of times and could lead to future cross-selling opportunities, which definitely makes this a sports betting stock to watch going forward.

VanEck Vectors Gaming ETF (NASDAQ: BJK)

One of the things that investors should understand about the sports betting industry is that it is highly competitive. While the stocks mentioned above certainly stand out as potential leaders, it might be better to consider adding shares of the VanEck Vectors Gaming ETF which offers exposure to companies that generate at least 50% of their revenues from gaming. That means you will own a diversified basket of casino, sports betting, and gaming services stocks without subjecting your portfolio to single stock risk.

Some of the top holdings in this ETF include Flutter Entertainment, Draftkings, Las Vegas Sands, MGM Resorts, Wynn Resorts, and Penn National Gaming. Keep in mind that many of the major casino operators such as MGM Resorts and Penn National Gaming are making moves to offer sports betting services, which means that this ETF could end up being a big winner as widespread legalization occurs. It's worth noting that the price performance of this ETF will be impacted by the progress of the economic reopening, but it still might be one of the best ways to take advantage of the growing sports betting market going forward.

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