BETZ extended its year-to-date lead over the S&P 500 Index, which lost momentum and closed slightly lower last week amid fears of escalating trade tensions.

This Week’s Biggest Gains:

Esports Entertainment Surges Despite Financial Struggles

Esports Entertainment Group was the top gainer among the gaming stocks in our coverage universe, gaining 21.6% over the past week. 

The stock has been highly volatile over the past few weeks. Two weeks ago, it was down 16.2%, but following last week’s gains, the stock is up over 56% for the year. Still, it trades approximately 30% below its 52-week high.

The company, which voluntarily delisted from Nasdaq last year and now trades OTC, has stopped publicly reporting earnings. The stock’s low trading volumes and high volatility make it prone to manipulation and speculation. 

Despite last week’s rally, the company remains in severe financial distress, with ongoing losses, mounting debt, and negative shareholder equity.

DraftKings Rebounds on Valuation Optimism

DraftKings was among the other major gainers with the stock rising 5.4% last week. 

It was among the biggest losers in the preceding week on fears that the provisions of the One Big Beautiful Big Act (OBBBA) would dampen gambling activity.

For context, the Act mandates a 90% deduction for losses (versus the previous regime of 100% deduction), which could result in gamblers paying taxes even if they don’t make a profit.

Investor sentiment improved after analysts argued the sell-off was overdone. 

Morgan Stanley raised its target price to $52 while maintaining the “overweight” rating, while Citi maintained its “buy” rating and $58 target price on DraftKings. 

The brokerage sees DraftKings shares as undervalued in light of Flutter’s acquisition of Boyd Gaming’s 5% equity stake in FanDuel, which values FanDuel at $31 billion. 

According to Citi, DraftKings trades at a 7% discount to the implied valuation of 17.4x 2026 EV-EBITDA for FanDuel.

Mizuho also echoed similar views and said that while FanDuel and DraftKings have similar market share, the former’s implied market capitalization of $40 billion in the transaction is roughly twice DraftKings’ market capitalization.

Wynn Resorts Extends Gains

While it didn’t repeat the 14% growth from last week, Wynn Resorts’ stock rose over 5.2% last week, which extended its year-to-date gains to 29%. 

On Monday, Wynn Resorts stock rose nearly 3% after Goldman Sachs reinitiated coverage with a Buy rating and $122 price target.

Goldman Sachs joined JPMorgan, which also initiated coverage of gaming stocks last month. Apart from Wynn, Goldman Sachs put a “buy” rating for Caesars Entertainment and a “neutral” rating for Las Vegas Sands. The brokerage, however, rated MGM Resorts as a “sell.”

Golden Entertainment Turns Positive for the Year

Golden Entertainment stock gained nearly 5% last week, even as there wasn’t any company-specific news. The company did pay a 25-cent dividend the previous week, but its record date was June 25. Nonetheless, after last week’s rise, the stock has turned positive for the year.

Golden Entertainment is focused on deleveraging its balance sheet through the sale of non-core assets, allowing the company to focus on its operations in Nevada primarily.

The Week’s Biggest Losers

Skillz Sinks on Broader Market Weakness

Skillz was the worst-performing stock in our coverage universe and lost over 7% last week. While there was no company-specific news last week, the stock traded on a weak note amid broader market weakness. 

Moreover, as a loss-making enterprise, Skillz was particularly under pressure last week. It has a 5-year beta of 2.7x, which means that it is 2.7x as volatile as broader markets.

The company’s paying monthly active users have fallen by over 41% over the last two years. It has been cutting marketing and operating expenses to reduce cash burn, but it has yet to show evidence of a turnaround.

Gambling.com Declines Amid Tariff Fears

Gambling.com Group Ltd was another major loser, falling nearly 5% last week. The stock was roughly flat for the week but fell over 4% on Friday amid US-EU tariff escalation rumours, which led to a market sell-off.

Playtika Slides Further

Playtika Holdings is back on the list of the biggest losers as the stock lost 4.8% last week, despite no major company-specific news. 

The stock is now down 32% for the year amid concerns that the company’s user base is shrinking due to its reliance on older mobile game titles and questions about long-term growth prospects. 

Penn Entertainment Falls on Regional Revenue Drop

Penn Entertainment rounded up the top losers, shedding 3.5% for the week. The stock was in the green until Thursday but fell 7.6% on Friday after Indiana and Iowa reported a year-over-year decline in gaming revenue for June.

Additional tariff-related worries further pressured the stock, which underperformed compared to rivals such as Sands Las Vegas, DraftKings, and MGM Resorts. 

Other Major Industry Developments Last Week

On Wednesday, Blackstone-backed gaming company Cirsa went public in Barcelona. 

While the IPO was oversubscribed multiple times, it closed at the IPO price of €15 on its first trading day and has remained flat since then, closing at the same level last week. 

While the IPO saw strong interest from investors, concerns over the company’s high debt pile, heavy reliance on Latin American markets and online gaming, and rich valuations dampened sentiments.

In another development, Senate Republicans blocked attempts to roll back the gambling tax provisions in the OBBBA. The new rules, which will take effect next year, are expected to generate $1.1 billion in tax revenue over the next eight years.

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While the IPO was oversubscribed multiple times, it closed at the IPO price of €15 on its first trading day and has remained flat since then. 

Here’s everything we know about the IPO and Cirsa, which is the second-largest listing in Spain this year, in a market that has been lackluster for new listings in Europe.

Cirsa Stock Falls Below IPO Price

Cirsa shares briefly rose to €16 on their debut day, or 6.7% higher than their issue price, but quickly lost momentum. The stock also briefly fell below its IPO price today.  

Typically, massively oversubscribed IPOs, such as Cirsa, deliver substantial listing gains. 

However, companies often tend to price the IPO at higher prices as the demand for shares outweighs the supply. That leaves less room for post-listing upsides.

While investors haven’t seen immediate gains in the Cirsa IPO, Blackstone, which acquired the company for an enterprise value of around €2 billion in 2018, has made decent returns.

According to reports, at the IPO price, the equity value in Cirsa IPO was 2.5 times Blackstone’s original investment.

Nonetheless, Cirsa’s listing is a boost not only to the gaming sector but also to European stock markets, where IPOs have plummeted to 46 in the first half of the year, compared to 61 in the same period last year, according to Dealogic.

What Cirsa Plans to Do with the Funds

Cirsa raised €400 million in capital through the IPO, which could increase to €521 million if the overallotment option is fully exercised. At a minimum, 18% of Cirsa’s shares will be freely tradable on the market. 

The company plans to use the proceeds to reduce its debt, which currently stands at €2.37 billion, and aims to achieve a net leverage ratio of between 2.0x and 2.5x.

Additionally, Cirsa plans to consider acquisitions worth between €400 million and € 500 million between 2025 and 2027. 

The company has identified 100 potential targets, primarily in Latin America and Spain.

Acquisitions have been a key growth pillar for Cirsa, and the company has acquired 130 companies since 2015, spending a cumulative €1.2 billion. 

Notable recent deals include sports betting operator Apuesta Total in Peru, as well as Casino Portugal.

A Diversified and Growing Business

Cirsa has globally diversified operations. Spain is the company’s biggest market, where it’s a casino market leader. 

The company also operates in Italy, Morocco, Latin America, Portugal, and Puerto Rico. 

The company’s online segment is its fastest-growing business segment, accounting for 22.5% of its total operating net revenues in the first quarter of this year.

Looking at EBITDA contributions: 

• Casino business: 58% of EBITDA with a 42% margin.
• Slots Spain (slot machines): 27% of EBITDA, 46% margin.
• Online gaming: 12% of EBITDA, 20% margin.

The online gaming business is still evolving and navigating regulatory uncertainty; while its margins are arguably lower, it is also the fastest-growing segment for Cirsa. 

First-quarter revenues rose by 54.8% year-over-year, supported by expansions into new markets, including Peru and Portugal.

Cirsa has a strong track record of growing its EBITDA, with the metric increasing for 67 consecutive quarters (excluding quarters affected by the COVID-19 lockdown).

Last year, the company posted €2,150 million in operating revenue (8% year-over-year increase) with an operating profit of €699 million(up 11% year-over-year). 

Cautious Investor Reaction Despite Strong Fundamentals

While Cirsa’s IPO was heavily oversubscribed, investors remained cautious after the debut. The stock reached €16 but closed unchanged, reflecting hesitation. 

Some investors raised concerns over Cirsa’s relatively high debt and heavy reliance on Latin American markets and online gaming. 

Others noted that Cirsa’s estimated post-IPO value of roughly €2.5 billion places the enterprise value-to-EBITDA in the approximately 7.5x range, providing limited room for short-term upside. 

Notably, several prominent Spanish fund managers opted out of the IPO. They cited ethical or regulatory discomfort. 

Dividend Plans in 2026

Cirsa does not currently pay dividends, but the company intends to do so in 2026, targeting a dividend payout of 35% of its adjusted net profits. 

The company has a cash conversion of 74% which is quite robust. In its IPO prospectus, the company said: 

“This strong cash generation provides a platform for a ‘virtuous circle’ of profitable growth, while enabling CIRSA to deleverage and still maintain a disciplined and attractive dividend policy.” 

The post Cirsa Has a Lacklustre Debut Despite Oversubscribed IPO appeared first on CasinoBeats.

Melco Resorts Leads the Pack

With gains of over 21%, Melco Resorts was the best-performing gaming stock in our coverage universe. 

The stock was also among the biggest gainers in the preceding week and has now extended its year-to-date gains to nearly 48%. Last week’s rise could be attributed to optimism over strong growth in the Macau market.

On Tuesday, Macau reported a 19% YoY increase in June gaming revenue, which was over twice what analysts were expecting. 

As a result, on July 1, JP Morgan Chase & Co. upgraded Melco from a “neutral” rating to an “overweight.” On July 7, Wall Street Zen upgraded the stock from a “hold” rating to a “buy” rating.

Outside Macau, another factor contributing to the surge in share price was Melco’s announcement on Monday that it will open its City of Dreams Sri Lanka resort in early August. 

Douyu Stock Rises, Still Down Year-To-Date

Douyu International Holdings was the second-largest gainer, with the stock adding 18% last week, thanks to an over 10% spike on Friday..

Despite recent gains, the stock is down over 32% for the year and approximately 62% lower than its 52-week high due to concerns over the company’s financial health.

Wynn, MGM, and Las Vegas Sands Ride Macau Wave

Wynn Resorts gained 14% last week, with the gains primarily attributable to the positive June revenue update from Macau. The stock is now up 22.6% for the year, which, although below BETZ, is well ahead of the broader market.

MGM Resorts also outperformed last week after the update from Macau, gaining more than 11%, which helped it bridge its year-to-date losses and turn positive for the year.

Also, with an 11% growth, Las Vegas Sands rounded out the top beneficiaries of the strong Macau Results.  

Bally’s Pops on Intralot Deal

Bally’s Corporation was among the major gainers last week, with the stock increasing by over 12%. 

On Tuesday, Bally’s Corporation shares rose almost 16% after Intralot S.A. announced that it would acquire the company’s International Interactive division for €2.7 billion, paid in a mix of cash and stock.

Despite the influx of cash to support mounting debt, Fitch Ratings placed Bally’s on rating watch negative, indicating Bally’s financial stability may deteriorate because it is selling a profitable unit and becoming more exposed to other risks.

Huya Continues to Sink, DraftKings Feel Big Beautiful Bill’s Effect

Huya lost a third of its market capitalization last week, continuing its dismal run from the previous two weeks. The stock was quite volatile last week, plummeting 36% on Monday, followed by a rise of over 13% on Tuesday.

Even a generous ex-dividend payout of $1.47 (part of a planned $400 million return to shareholders) could not save the stock from the Monday freefall.   

The NYSE applied “due bill” procedures for the dividend, which mandated that those who bought the stock on or before the record date of June 17 but before the payment date of July 1 were eligible for the dividend, even if the trades were settled after July 1. The procedure was implemented due to the high dividend yield compared to the stock price.

While the fat dividend is succor, considering the stock trades at under $2.50, Huya has been a long-term underperformer and trades at just about one-tenth of its all-time high. The tech crackdown in China, coupled with a structural slowdown in the world’s second-biggest economy, has taken a toll on the stock.

Moreover, Huya faces intense competition from Chinese rivals. It has also posted GAAP losses for three consecutive years, which has made the market apprehensive about the company’s future.

Sea Limited Struggles with E-Commerce Headwinds

Sea Limited was among the other prominent losers, losing 5.7% last week. 

The company is not a pure-play gaming company; while its subsidiary, Garena, is in the gaming business, it is a global tech conglomerate with a presence in e-commerce and the fintech space. 

The recent decline is attributed to concern over higher competition in the other two businesses, particularly e-commerce, where TikTok Shop is gaining ground.

Additionally, several institutions, including the Teacher Retirement System of Texas and Sumitomo Mitsui Trust, reduced their holdings, which triggered further pressure.

DraftKings Hit by New Gambling Tax Concerns 

DraftKings stock lost 3.5% last week, which is linked to the passage of President Trump’s signature tax and spending bill, dubbed the One Big Beautiful Big Act (OBBBA). 

The Act would raise taxes for the gambling industry, as it mandates a 90% deduction for losses, which could result in gamblers paying taxes even if they don’t make a profit. For context, under current regulations, all gambling losses can be deducted from income up to the total winnings.

“I’ve spoken to many clients, and they’re very concerned,” said Zachary Zimbile, an accountant with experience in gambling regulations. He added, “If you add a 10% penalty, it’s going to eat into a lot of their profit.”

Separately, last week, DraftKings announced the launch of its Responsible Gaming tool named “My Budget Builder,” which lets players set customized limits and receive easy reminders.

Genius Sports Sees Volatility Despite Index Inclusion

Genius Sports also closed in the red last week despite its inclusion in the Russell 3000 Index. Inclusion in any index means that passive funds tracking that index must necessarily buy the stock in the same percentage as the index.

While usually stocks rise on inclusion – and Genius Sports did gain on Monday (the day it was included in the index) – it subsequently pared gains amid concerns over the impact of Trump’s tax bill provisions on gambling revenues.

The 3% decline for the week showcases the recent volatility of the stock. In the past few weeks, it has posted growth followed by declines and vice versa. 

Still, Genius Sports’ stock is performing well for the year. It’s up almost 8% over the past month, primarily driven by a new NFL deal, and for the year, it has grown over 18%. 

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The Roundhill Sports Betting & iGaming ETF (NYSE: BETZ) gained 6.1% last week and outperformed the S&P 500 Index, which rose 3.4%.

While the world’s most popular index hit record highs last week amid easing trade and geopolitical tensions, BETZ is outperforming it by a wide margin in 2025.

The Top Five Earners This Week

Super Group: Soaring in Europe Despite US Exit

Super Group, the parent company of Betway sportsbook, which exited the US last year, has thrived in Europe and continued its strong performance since the beginning of the year.

It rose 14.6% last week. The previous week, Super Group was the top gainer among gaming stocks in our coverage universe and has now extended its year-to-date gains to 78%.

The company did not make a significant announcement last week. However, earlier this month, BTIG analyst Clark Lampen raised the stock’s target price to $11 from $9 while maintaining his “buy” rating.

While analysts have gradually raised the stock’s target price over the last two months, among others in anticipation of strong EBITDA margins in key European markets, the stock now trades just 6.6% below its mean target price of $11.83. That signals limited upside.

Melco Resorts: Macau Momentum Lifts Shares

With gains of 12.5% last week, Melco Resorts & Entertainment was among the other major gaming gainers. The company has enjoyed solid recent months, highlighted by Macau’s strong May results. The stock has increased by 15% over the past month. 

However, the stock was trading lower in the US premarket after Wall Street Zen downgraded it from a “buy” to a “hold” over the weekend. The brokerage set a $7.1 target price on Melco Resorts, which is below the mean target price of $6.73.

Melco’s earnings could continue to grow this week as well, as the company has announced that its City of Dreams Sri Lanka casino resort will open in August.

Light & Wonder: Court Win Sparks Double-Digit Jump

Light & Wonder stock gained 12.3% last week, which helped it bridge its year-to-date losses and turn positive for the year. The stock jumped 10% on Wednesday following a favorable court ruling in its legal dispute with Aristocrat Leisure Limited.

The Nevada district court hearing the case ruled that Light & Wonder wasn’t obligated to disclose the math models for all the games that Aristocrat was seeking. 

While LNW stock rallied after the ruling, analysts don’t see the court’s decree improving the company’s financial situation.

Still, Jeffries analysts have a target price of $116, which is approximately 20% above the current price. Meanwhile, Macquarie has the stock as “outperform” with a $120 target, 25% higher than the current price.  

Codere & Genius: Regulatory Relief and NFL Optimism

Codere Online, the digital arm of the Spanish-based Codere Group, climbed 10% last week. The company was facing delisting by NASDAQ, its second such warning. However, it managed to file its annual report just in time to avoid the delisting.

The stock was having a lackluster week but rose 9.5% on Friday. In the past month, it has grown 15%. The company’s footprint in Latin America and Mexico could help it continue to grow.

Still, currencies across the region have weakened by almost 10% this year, showcasing potential volatility in the share’s price. 

Genius Sports gained 8% last week and was among the major gainers. The stock has been quite volatile over the past few weeks. While it lost 8% in the preceding week, it was among the major gainers in the week before amid optimism over the company’s expanded partnership with the NFL.

Top Weekly Losers

Esports Entertainment: Financial Woes Continue to Drag Shares Down

Esports Entertainment Group was the top loser among gaming stocks, falling 16.2% over the past week. Following last week’s drawdown, the stock now trades approximately 62% below its 52-week high.

The stock has been quite volatile this year. The company is in severe financial distress, experiencing perennial losses and mounting debt (over $100 million annualized). That is making markets wary about the company’s ability to stay afloat.

However, there have been intermittent rallies in between. The stock was among the top gainers in the previous week as a section of the market saw value in this beaten-down name.

Last year, the company voluntarily delisted from the Nasdaq and now trades on the OTC market. It also ceased publicly reporting its earnings, so we don’t get its updated financials, making the stock a risky proposition.

Century Casinos: Debt Concerns End Hot Streak

Century Casinos ended its growth streak over the previous few weeks, losing nearly 3% last week. The stock has shed over a quarter of its market cap this year, and it’s down 32%. Compared to its 52-week high, it has declined by 58%. 

Some analysts viewed the stock as undervalued, driving the growth over the previous few weeks. Still, the company is facing declining revenues, widening losses, and increased cash burn.

In the first quarter of 2025, it missed both top-line and bottom-line estimates. It is also saddled with a burgeoning debt pile that far exceeds its market capitalization.

Huya: China Crackdown Keeps Pressure On

Huya also closed in the red last week, continuing its dismal run from the previous week.

The stock has been a long-term underperformer and trades at just about one-tenth of its all-time high. The tech crackdown in China, coupled with a structural slowdown in the world’s second-biggest economy, has taken a toll on the stock.

Moreover, Huya faces intense competition from Chinese rivals. It has also posted GAAP losses for three consecutive years, which has made the market apprehensive about the company’s future.

Other Key Industry Developments: Analysts See More Gains Ahead for Penn Entertainment

Penn Entertainment also rose 7% last week amid positive commentary from analysts. That helped the share to climb over 20% in the past month. Still, year-to-date, Penn’s stock is down over 7%.

Earlier Monday, JPMorgan initiated coverage on the gaming sector. “The Gaming sector is rife with risks, but potential rewards are high,” noted analysts led by Daniel Politzer in their note.

The leading brokerage named three top picks in the report. It assigned Penn Entertainment an “outperform” rating, with a target price of $24, approximately 35% higher than the current price of $17.89. 

It expects ESPN Bet’s losses, which have been a point of contention with activist investor HG Vora, to narrow now that the investor has two directors on the company’s board.

The brokerage is also bullish on Red Rock Resorts and highlighted improved EBITDA visibility over the next two years. 

Furthermore, it assigned Caesars Entertainment an overweight rating with a target price of $47.65, which is 65% higher than the current price and close to its 52-week high.

Citizens JMP also upgraded Penn Entertainment to a “buy” rating on Thursday and assigned a target price of $24. The company sees a turnaround on the horizon, particularly for its loss-making sports betting venture. 

However, the brokerage downgraded MGM stock from an “overweight” to “equal weight,” citing an expected stagnation in the Las Vegas market.

The post Gaming Stock Outlook: Super Group, Melco Lead Gainers, Esports Entertainment Crashes appeared first on CasinoBeats.

Meanwhile, Aristocrat’s shares dropped 2% yesterday and continued falling today, down by an additional 0.38%.

Background: Copyright Dispute Over Slot Game Designs

Light & Wonder, previously known as Scientific Games Corporation, creates and distributes gaming content, hardware, and systems. 

Australia-based Aristocrat Leisure Limited is also in a similar line of business, and in 2024, it filed a lawsuit against LNW, accusing it of copyright infringement.

Specifically, it accused some elements in the design of Light & Wonder’s Dragon Train game of being copied from its intellectual property. The Federal Court of Australia granted the company pre-suit discovery against LNW.

Aristocrat also filed a five-count complaint in the U.S. District Court of Nevada. In September 2024, Judge Gloria M. Navarro granted its motion for a preliminary injunction on its trade secret claims against Light & Wonder. 

The court enjoined LNW from “any continued or planned sale, leasing, or other commercialization of Dragon Train.” Expectedly, Light & Wonder appealed that preliminary injunction.

In February 2025, the Federal Court of Australia rejected Aristocrat’s request for an interlocutory injunction against Light & Wonder, allowing the latter to continue selling Dragon Train games in the country.

Light & Wonder Voluntarily Withdrew “Jewel of the Dragon”

In April 2025, Light & Wonder announced that it would voluntarily cease commercializing “Jewel of the Dragon” slot machines following a second amendment complaint by Aristocrat.

The company identified that some Aristocrat PAR sheets (which are like blueprints for a slot machine) dated 2015 were made available to specific team members working on the development of Jewel of the Dragon.

“Our internal review processes identified that an early version of this game’s math model potentially presented issues relating to Aristocrat,” said Light & Wonder in its release. 

It extended its review to all games released before mid-2021, adding that it has no reason to believe there is a similar issue with other games.

The company concluded its review last month and stated that it did not identify any other instances of misappropriation. 

Aristocrat wasn’t impressed with the results and said Light & Wonder did not provide the complete lists of projects that Emma Charles, whose work was the core of its lawsuit, worked on.

In March 2025, concerns about additional lawsuits related to other games led to a 20% decline in LNW’s share price over just five days. Still, analysts at Macquarie called the market reaction “overdone,” estimating limited financial exposure and reaffirming confidence in LNW’s target of $1.4 billion in 2025 EBITDA.

Court Victory: Narrowed Scope of Discovery

Light & Wonder received a major legal victory yesterday after the Nevada district court hearing the case found Aristocrat’s discovery request too broad. 

It ruled that Light & Wonder wasn’t obligated to disclose the math models for all the games that Aristocrat was seeking. It asked Aristocrat to be specific about the trade secrets it wanted to protect under the litigation.

Markets viewed the legal victory as a reprieve for LNW, sending the stock up over 10% yesterday. 

Thanks to yesterday’s rally, the stock is now up 9.4% for the year as of yesterday’s close and is outperforming the S&P 500 Index, despite its returns being under half those of the Roundhill Sports Betting & iGaming ETF.

Analyst Reactions: “Incremental Positive,” But Limited Financial Impact

While LNW rallied sharply yesterday, analysts don’t see the court’s decree moving the needle financially for either of the companies. 

While Jefferies Equity Research analyst David Katz said the court decree “is an incremental positive” for LNW, he added, “We view the case generally as background noise in the near term, financially limited.”

Katz believes that Light & Wonder might need to pay a significant sum to Aristocrat, but stressed that it might be meaty enough to change his views of either company.

According to Katz, “The competition between the two companies is intense, given their positioning as the only two large-scale game developers globally and the number of people at Light & Wonder that were formerly at Aristocrat.”

Despite considering the case to have limited financial implications, the analyst maintains a Buy rating for LNW, setting a price target of $116 per share, over 20% higher than the current price. This decision is expected to positively influence investor confidence in Light & Wonder.

Macquarie, which has an Outperform rating on LNW, recently raised its target from $120 to $122, citing strong fundamentals and manageable legal risks.

 The firm’s target price is considerably higher than LNW’s mean target price of $107, which is approximately 13% higher than the current prices.

Outlook: What’s Next for LNW and Aristocrat?

The legal case is far from over. Although none of the companies have publicly commented on the court decree so far, many believe that Aristocrat will appeal the decision.

Still, the court’s ruling gave investors renewed confidence in LWN’s position, particularly since it had no impact on its financial guidance. 

The post Light & Wonder vs. Aristocrat: Court Ruling Sends LNW Stock Up 10% appeared first on CasinoBeats.

The Federal Reserve also expectedly maintained its pause on rate cuts, but Chair Jerome Powell’s commentary following last week’s Federal Open Market Committee meeting was seen as somewhat hawkish. 

Nonetheless, the Roundhill Sports Betting & iGaming ETF, which is the world’s largest gambling ETF, closed marginally higher for the week.

Esports Entertainment Group Bounces Back After Difficult Week

After being the biggest loser in the preceding week with a 16.7% drop, Esports Entertainment Group was the top gainer among gaming stocks, gaining 8.5% over the past week. Some analysts attribute the gain to the fear of missing out among buyers, given the substantial drop that preceded it.

While the stock is up for the year, it trades approximately 68% below the 52-week high.  Last year, the company voluntarily delisted from the Nasdaq and now trades on the OTC market. It also ceased publicly reporting its earnings, so we don’t get its updated financials.

The company is in severe financial distress amid perennial losses and burgeoning debt, which is making markets wary about the company’s ability to stay afloat.

Century Casino Continues Fightback

With a gain of 15.5%, Century Casinos was another notable winner among leading gaming stocks last week, continuing its strong performance recently. The stock had risen by 10.5% in the preceding week and has now bridged its YTD losses to just under 25%. 

One factor contributing to the positive results last week was the company’s announcement that, starting July 19, Magique, an acclaimed attraction and show, will take center stage in the resort’s Celebrity Showroom.

While there weren’t any other market-moving announcements last week, recent bullish analyst commentary, including that from Bank of America, Deutsche Bank, and Stifel, suggests the stock is undervalued.

Earlier this month, Stifel stated that it expects the shares to rise to $4. Century Casinos’ mean target price is $5, which is about double its current trading price.

DraftKings Leads The Best of the Rest

With a 7% growth, DraftKings was the third-largest gainer last week amid continued optimism over the 50-cent surcharge the company would implement on all bets in Illinois, effective September 1.

Analysts see the announcement as a means to preserve margins and management’s willingness to defend profitability. Jeffreys maintains a “buy” outlook with a $60 price target, about 50% higher than the current price.

Meanwhile, JP Morgan updated its target to $50 per share, representing about a 25% increase. Still, JP Morgan maintains a “mixed” outlook, based on the uncertainty around tax increases in states like Illinois, Louisiana, and Maryland.

Robinhood stock gained 6.3% last week, and while there was no news related to its prediction business, a strong set of numbers for May and expectations of higher trading volumes amid market volatility helped propel the stock higher.

Golden Entertainment stock gained 5.4% last week. The company boasts an attractive dividend yield of 3.5%. It is focused on deleveraging its balance sheet through the sale of non-core assets, allowing the company to focus on its operations in Nevada primarily.

Bally’s Corporation gained 4.3% last week, bouncing back from the 5.2% loss the previous week. The positive result is directly attributed to BetMGM’s announcement of an improved 2025 financial forecast, which lifted much of the industry.

Still, Bally’s stock remains down over 46% for the year, placing it among the worst-performing names in the industry. The company has a substantial debt pile, with net long-term debt of $3.4 billion as of March 31. For context, Bally’s market cap is under $500 million.

Which Gambling Stocks Underperformed Last Week?

Unlike Esports Entertainment Group and Bally’s, which bounced back from a bad week, Genius Sports had the opposite fortune and became the top loser last week with a drawdown of 8.2%.

The stock was among the biggest gainers in the preceding week after it expanded its partnership with the NFL, which will ensure that it remains the league’s exclusive distributor of official data feeds and watch-and-bet services until the end of the 2029 season.

Last week’s price action was more likely a profit-booking exercise amid jitters in the broader markets on geopolitical tensions.

The number two spot went to Huya, whose stock lost 7.3% last week after a steep sell-off on Friday, amid selling in select Chinese shares.

These results were directly affected by Daiwa America downgrading Huya from a “strong buy” to a “hold” rating on Tuesday. On the same day, Daiwa Capital Markets downgraded Huya from an “outperform” rating to a “neutral” rating. 

Playtika stock fell nearly 6% on Friday, partly due to the ex-dividend date, prompting many holders to sell ahead of the expected decline in stock price that typically accompanies ex-dividend events.  The dividend of 10 cents per share will be paid out on July 7.

Corsair Gaming rounded the top losers last week, falling 4.3%. Despite last week’s losses, the stock is up over 36% for the year and is outperforming the broader markets. 

The recent losses appear to be more of a profit-booking exercise, as the stock had risen sharply in the previous few weeks after strong Q1 results.

Other Key Gaming Industry Developments

Last week was quite eventful for gaming stocks, with a broad-based rally on Monday following BetMGM’s announcement of raising its full-year guidance.

It stated that the positive momentum of Q1 has continued into Q2, and the company is witnessing strong growth across both the iGaming and Online Sports businesses. 

BetMGM has raised its full-year revenue guidance, now expecting net revenues to be at least $2.6 billion, up from the previous guidance of $2.4 billion to $2.5 billion. 

It now expects its EBITDA to be at least $100 million, compared to its earlier guidance of reaching positive EBITDA this year.

MGM stock rose 8% on Monday, which was its most significant single-day gain since April. However, the stock was unable to retain these gains and ended the week only 1.9% higher amid broader market turbulence.

The other key gaming industry development was Penn Entertainment’s annual shareholder meeting on Tuesday. As expected, Johnny Hartnett and Carlos Ruisanchez, who activist investor HG Vora backed, were nominated as the company’s directors. 

While the stock was trading slightly down in early trading on Wednesday, it eventually closed 4% higher that day on optimism that the new directors would push for steps to enhance shareholder value.

In addition to the bet surcharge announcement in Illinois, another significant move by DraftKings was the launch of a Political Action Committee (PAC), becoming the first sports betting operator to do so. 

Through its PAC, the company says it will enhance the customer experience. However, the PAC will also increase DraftKings’ political influence amid factors like tax increases, antitrust concerns, and legislative scrutiny. 

The post Gaming Stocks Outlook: DraftKings, Century Casinos, and Esports Entertainment Lead Gains appeared first on CasinoBeats.

The results were in line with expectations as both the company and HG Vora backed both Johnny Hartnett and Carlos Ruisanchez.

For context, HG Vora took a 4.8% stake in Penn, which makes it the third-largest investor behind BlackRock and Vanguard. 

The fund has been critical of Penn’s management, including for what it called “misguided transformation into a sports, media and technology conglomerate.”

HG Vora Laments Poor Executive Management

In its presentation, HG Vora said that Penn’s online sports betting pivot has “failed” despite spending $4 billion on the venture over five years. 

It particularly listed the Barstool Sports acquisition, where Penn eventually sold back the venture to Dave Portnoy for a mere $1 after having paid over $550 million initially. 

The fund also lashed out at Penn’s executive compensation, especially in light of its sagging stock price.

HG Vora was looking to add a third nominee, Penn’s former CFO William Clifford, to the board, but Penn reduced the number of directorial candidates from three to two. 

While Penn will officially file the results in the coming days, HG Vora claims Clifford’s candidature also received the support from the majority of shareholders.

Importantly, what appears to be a setback to Penn’s management, HG Vora’s release claims that 60% of shareholders rejected its “Say-on-Pay” proposal.

While two directors won’t exactly give HG Vora veto powers, the fund is expected to pursue changes related to Penn’s online betting business, its partnership with ESPN Bet, and push for deleveraging. 

Meanwhile, Penn shares are trading slightly lower in pre-market today as the results of the shareholder meeting were expected. 

The muted price action could also be because HG Vora does not have any previous track record as an activist investor, and it is the firm’s first foray into activism. 

Markets might wait and see how its nominees help change Penn’s business before reacting to the new directors.

Penn Entertainment’s Underperformance Made It Ripe for Activist Investors

Penn always looked fertile for intervention from an activist investor given its disappointing price action. 

The stock has lost around half of its market capitalization over the last five years and is down a whopping 89% from the record highs it reached in 2021. 

For context, Las Vegas Sands and Playtika Holdings have lost 12% and 84 % over the last five years. Wynn Resorts is flat, while MGM Resorts has gained almost 74% for the period.

While competitors’ performance has been mixed, Penn has underperformed compared to the majority of its peers over the last five years. HG Vora attributes this to the board’s failure to hold management to account for astute execution. 

Why Has Penn Stock Been Falling?

Penn’s dismal price action since the 2021 peak is not surprising, given that its financial performance has underwhelmed, frequently missing earnings estimates (including in Q1 2025).  

The company’s revenues rose 65% in 2021, the year it hit its record highs. However, growth fell to 8.4% in 2022, and in 2023, its revenues declined by 0.6%. Revenue growth did recover to 3.4% last year, and analysts expect topline growth in the ballpark of 5% in 2025 and 2026.

The bottom-line performance has deteriorated badly, and its adjusted net income fell from $428.3 million in 2021 to $401.8 million in 2022 and $60.8 million in 2023. Last year, the company reported an adjusted net loss of nearly $252 million, while its free cash flow was -$123.4 million. 

What’s the Forecast for Penn Entertainment Stock?

There has been no major analyst action following the AGM, as the results were in line with estimates. 

In its release welcoming the two new directors, Penn said, it is “intently focused on driving profitability in our Interactive segment and growth across the business.” It also talked about the need to deleverage its balance sheet and return capital to shareholders.

The company repurchased $35 million worth of its shares in Q1 and intends to scale up repurchases in the second half of the year, as it views its stock price as “severely dislocated” from its fundamentals.

Penn’s valuations have plummeted amid perennial underperformance, and it trades at just 0.34x its projected sales over the next 12 months, which is not only the lowest among its major listed peers but is also a discount to its long-term average multiples.

While HG Vora and the analyst community agree with Penn’s management on its valuations, given the over 41% discount to the median target price of $23.23, the company might need to change its strategy to drive shareholder returns.

That said, the record of activist investors in driving turnarounds is mixed at best. While there are success stories, such as Dan Loeb pushing Yahoo to divest its Alibaba stake, there have been many failures, including Bill Ackman’s ill-fated efforts to transform J.C. Penney.

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The Dow Jones lost over 700 points, yet major market indices managed to eke out a small gain during the week, extending the positive trend to three weeks. 

The Roundhill Sports Betting & iGaming ETF, which is the world’s largest gambling ETF, gained over 2% for the week. 

Gaming Stocks with Strong Weekly Momentum

With a gain of 10.5%, Century Casinos was the biggest gainer among leading gaming stocks last week. The stock rose by almost 3.8% on Friday, despite broader markets dipping due to increasing tensions in the Middle East.

However, the stock has lost 32.1% year-to-date, making it one of the worst-performing stocks among its peers this year.

Some reasons for the jump include bullish analyst commentary, particularly from Bank of America and Deutsche Bank, which label it as undervalued. Another factor was investor enthusiasm over renovation progress in Missouri and Nevada properties.

Furthermore, investors welcomed Century’s partnership with BetMGM for the launch of sports betting in Missouri.  

Technology provider Gan Ltd. registered a 5.9% gain as the company was officially acquired by Sega Sammy Holdings, marking its departure from NASDAQ. 

Codere Online, the digital arm of the Spanish-based Codere Group, climbed 4.2% after filing its 2024 annual report just in time to regain compliance with NASDAQ. That was the second time the company faced delisting by NASDAQ. 

The weekly growth for Genius Sports, the technology and sports data provider, was primarily driven by the announcement that the company expanded its partnership with the NFL. 

Through the deal, Genius Sports will remain the league’s exclusive distributor of official data feeds and watch-and-bet services until the end of the 2029 season.

Super Group, the parent company of Betway sportsbook, which exited the US last year, has continued its strong performance since the beginning of the year and rose 3.1% last week. 

A primary reason was the board’s declaration of a $0.04 per-share cash dividend, signaling the company’s confidence. Also, analysts at BTIG and Zacks remain bullish on the stock, forecasting EBITDA margins over 35% in key European markets. 

Underperforming Gambling Stocks: What’s Behind the Slide?

Esports Entertainment Group was the top loser among gaming stocks, falling 16.7% over the past week. Following last week’s drawdown, the stock now trades approximately 62% below its 52-week high.

Investor’s reaction comes amid the absence of news on funding or strategic alliances to keep the company afloat. The lack of news has also increased concerns over the company’s Q1 cash burn of $11 million. 

With losses of 6.8%, Sea Limited was the second-worst-performing gaming stock last week. Reasons include geopolitical tensions, such as tariffs on Southeast Asian countries, which affect its e-commerce and gaming businesses. 

The company’s gaming arm accounts for a small fraction of its revenue, but investors have sold in fear of escalating geopolitical headwinds. 

Light & Wonder Inc. was another loser with a 5.6% stock decline for the week, after Morgan Stanley trimmed its price target, citing a saturated US slot-machine market. Additionally, some insiders have been net sellers, raising concerns among investors.  

Bally’s Corporation dipped 5.2% for the week. Concerns are growing over the company’s debt-to-equity ratio, with analysts highlighting that the company is running on significant financial constraints. 

While the company faces financial concerns and downgrades in credit ratings, Bally’s is continuing with its $1.7 billion Chicago casino project and pursuing a casino license in New York City.

The Chinese game-streaming platform Douyu International Holdings rounded out the bottom five with a 4.5% decline for the week. This was a result of investors reacting to the company’s disappointing Q1 results, which included an 18% year-over-year decline in revenue and a 12% decline in active users.

Other Key Industry Developments

Last week, Flutter announced 250 job cuts in the UK, primarily at the company’s Leeds office, blaming “increasing cost and regulatory pressure.” The company also doubled down on share repurchases last week as part of its multi-year buyback plan.

In response to the per-wager tax that Illinois has proposed in its new state fiscal budget, Flutter-owned FanDuel announced a 50-cent surcharge on all wagers last Tuesday. 

DraftKings followed suit two days later and announced a 50-cent transaction fee effective September 1 on all mobile and online bets placed in the state through its Sportsbook.

Bernstein listed DraftKings as among the best picks in the entertainment sector, along with Spotify and Live Nation. DraftKings’ consensus target price is $54.41, which is almost 50% higher than its current price.

Tuesday evening, Rush Street Interactive announced that it would expand its BetRivers Poker platform into Delaware, Michigan, and West Virginia. Markets gave the announcement a thumbs up, and the stock rose sharply on Wednesday. However, it closed down just over 1% for the week after a 4% drawdown on Friday.

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