Sports Betting Stocks Could See A Major Catalyst Soon

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Who's more excited about the vaccine than those who have been locked down for months and unable to travel?

The answer is casino operators and casino stockholders.

While some casinos have reopened, they are not seeing a big boom in business. Many people are still wary of traveling. It also doesn't help that the daily news is full of warnings from various agencies about inside activities and the heightened risk of coronavirus infections.

Some diehards have made their way to the casinos, but business is nowhere near peak levels. The vaccine will help change that. But it will be at least six months before gamblers start heading back in more significant numbers.

It is probably too soon to start betting on a full recovery in casino stocks.

But there are a couple gambling stocks on the rise that don't need casinos at all. One in particular is steeply undervalued right now.

Sports Betting Stocks Are Taking Over

Online sports betting is legal in 12 states, and six more have passed legislation that have not yet implemented the infrastructure to support betting. Over the next few years, we will see the majority of states legalize online sports gambling.

They need the money.

If neighboring states legalize online sports betting and your home state does not, you can just cross the state line and make your bets.

Your state gets zero tax revenue when that happens.

Online sports betting and gambling is going to be an enormous business. That's why MGM Resorts (NYSE: MGM) made an $11 billion attempt to buy out British online gambling giant Entain Plc. (OTCMKTS: GMVHY).

It's also why Entain turned it down as too low to reflect its online gambling company's real value.

Entain and MGM are already partners in BetMGM, an online sports betting operation that currently operates in nine states. The deal could still happen, but MGM will have to dig a lot deeper to get it done.

We have already seen a U.S. Casino operator, Caesars Entertainment Inc. (Nasdaq: CZR), buy a British online firm, William Hill, in the last year. In that deal, Caesars paid $3.6 billion to expand its sports betting operations.

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Disclosure: TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence. 

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