A brand can bring huge profits when everyone knows about it. Therefore, investments in trademarks are very profitable, because it is practically money out of thin air. The whole system of investment is based on this. However, what if you have a limited budget or want to start a new brand on your own? How do established big brands work and is it possible to work with them?
The article will tell you how to make a profit by investing in the best online casinos in Russia and other countries, whether developer companies are worth the time and what other options exist for investing in gambling.
How the online casino industry is developing
Looking at the data for 2021, the official revenues in the gambling and sports betting industry alone brought in $61.5 billion in a year. This figure is impressive, but gamblers and investors are even more pleased with the data that in the next 5 years the industry can almost double its volume and reach $114 billion. So now is a very lucrative time to join the industry, work or invest in online gambling.
However, in addition to the legal betting market, illegal betting is still developing on the Internet. For some countries, only this mode is available. For example, in Russia and in some US states there is a strict ban on any gambling on the Internet. So the residents of these regions are forced to bet illegally.
This situation speaks of two things at once. First, the gambling market is actually much larger than the official data suggests. Secondly, if in regions with bans the government changes its mind and legalizes gambling, then hundreds of thousands of players will get online casinos at once.
Investing in software companies
One of the ways to earn income through gambling is investing in companies that develop platforms for online casinos. Such sites are able to work in many languages at once (large Internet establishments offer 60 or more languages), accept payments from different sources and connect customers with operators. However, their main function is to provide an opportunity to exhibit gambling from different manufacturers. Today, visitors expect from casino platforms that the portal will work equally well on stationary and mobile devices.
If we talk about the nuances of investing in such corporations, then you need to take into account that platforms are an expensive product, so companies known all over the world are engaged in their release. So they expect a decent level of investment.
Investments in gambling development companies
Today there are several hundred development companies in the world. And the growth does not end there, because new offices for the creation of video slots are constantly opening.
A profitable industry allows both the giants of the industry to develop and the developers who are starting their creative path. So if you want to get a good income, then this is exactly the niche in which you can choose a talented team. Such a team will be able to reach the world level, multiplying your income.
Your own Internet establishment
One of the possible options that will allow you to make a profit in the field of gambling is the creation of your own casino. Such a business idea will require investments in the amount of several tens of thousands of dollars and a lot of work. If you can recruit professional workers with experience and understanding of the gaming industry, you can make a profit that will quickly pay off all investments.
When developing a casino, it should be taken into account that today players are not ready to play on low-quality sites, so if you save a couple of hundred dollars, you risk being left without thousands of customers who value their comfort. More importantly, high rollers, who are used to spending large sums in casinos, also bypass them.
Today, the legislation of many countries allows its citizens to place bets. Therefore, more and more casinos and players are striving to interact legally. So those who want to get customers will have to purchase licenses from states. Fortunately, in most cases, the permission of one country is enough. Of course, licenses from advanced European states, such as Great Britain or Belgium, have a special status. More economical options are Malta, Curacao and other countries.
In addition to the above options, investors may consider earning income from gambling information. For example, you may be puzzled by the development of a site where visitors can read about the best casinos on the Internet. Or collect information on how to play certain games. An alternative option may be instructions for games or streams.
There is also a lot of competition in this niche, but the launch of the project will require much more modest investments than when creating a casino. In this case, income can be received through affiliate programs. However, we advise you to carefully check the reliability of the company, as sometimes there are unscrupulous partners who do not want to pay a legitimate share for attracting a client.
The raging coronavirus has greatly affected the value of casino shares. Since most of the gambling establishments did not work for a long time due to the global quarantine (and some are still closed), the value of their assets has dropped sharply. But this is not the most important thing. Given the current situation, it seems highly likely that even after the end of the temporary restrictive measures, once the casinos reopen, there will be no less problems. In this article, we will try to understand what awaits the casino industry in the near future, how it will affect the value of their securities and, most importantly, whether it is worth investing in casinos now. What you need to know about casinos before investing
First, never forget, that the larger the size of the company, the greater its debts. A large amount of debt leads to a low margin of error. Because of this, absolutely any, even the slightest decline in the company’s work can lead to serious material losses.
Secondly, no one can yet say for sure how long it will take to return to normal life. Who knows, maybe only months or even years later, casino income will return to its previous level.
How can all this affect the value of shares?
Since February last year, the share prices of all casinos have been falling rapidly. Of course, there is already a tendency to return to the previous level, but a new outbreak of the disease and another lockdown with the closure of the casino can bring prices back to a minimum.
The owners of large casinos, meanwhile, are in no hurry to file for bankruptcy. Now the gambling industry is making bold and innovative decisions in order to survive difficult times. For example, it adds all sorts of bonuses to attract new players. You can now get a no deposit bonus at almost any online casino.
Sure, investing in casino stocks is still pretty risky, but these American gambling stocks can give you incredible growth opportunities. For clarity, let’s try to consider several investment strategies using Caesars Entertainment casino shares as an example
Investment in Caesars Entertainment
The unexpected COVID-19 pandemic has hit Caesars Entertainment casinos at a rough time as the company has just begun the process of merging with another well-known casino brand, Eldorado Resorts. Now, the consequences of a sudden outbreak of the disease could lead to a reassessment of the pending deal.
In this situation, even such a global giant as Caesars Entertainment had to minimize costs. To do this, the company fired 90% of its employees, thus reducing costs during the idle period of the casino.
To date, analysts tend to assume that the merger with the Eldorado brand will happen anyway, but now on different terms.
All things considered, investing in casinos is now quite risky, but it can bring high returns.
The gambling industry is actively developing, so it can be called a promising direction. Games for money excite people, evoke new feelings, so they have become a common entertainment all over the world. Choose the option
that best suits your budget and preference, and invest.
In China, legal casinos are available in the only gambling zone in Macau, which is also called the “Asian Las Vegas”. In terms of annual total revenue, Macau casinos are 6 times ahead of their closest competitor, the world gambling center – Las Vegas.
Shares of Chinese casinos are listed on the stock exchange: Sands China, Wynn Macau, MGM China, Galaxy Entertainment Group. Some companies in the Asian market are represented by US casino operators such as Las Vegas Sands, Wynn and MGM.
Investing in Chinese companies carries a high level of risk due to harsh regulations. In mid-September 2021, it became known that the PRC authorities were planning to tighten the rules for casino operations and strengthen supervision over activities. On the day the news was released, the shares of Chinese casinos lost up to 30% in their value!
The prospects are not the brightest, because Macau’s current gambling licenses are expiring next year, and there’s a good chance they won’t renew, especially for American companies. Casinos in Macau operate on a special agreement between the state and a private investor, in which the investor invests in the construction of gambling establishments and has the right to own it for the payback period of the investment and the duration of the agreement, and then transfers it to the state.
The gaming industry is not the first industry in China to be hit by tightening regulations. Therefore, investments in the Chinese market should be postponed and treated very carefully.
In 2021, casinos in Las Vegas began to gradually return to normal. In the fall, the WSOP World Series of Poker even took place at the Rio casino, which brings together a lot of players. Despite numerous restrictions, such as cross-border travel difficulties and the need for a vaccination certificate, the $10,000 WSOP Main Event attracted 6,650 participants. This, of course, is lower than the almost record-breaking 2019 – 8,569 people, but still not bad and inspires hope for the recovery of the gaming industry in Las Vegas. Starting next year, the WSOP will be held at Bally’s and Paris casinos, which, like Rio, are owned by Caesars Entertainment (CZR).
Let’s move on to an overview of the largest casino operators in the US, which are worth paying attention to. All casino shares in question are available for purchase on Russian trading floors: the Moscow Exchange and the St. Petersburg Exchange.
Las Vegas Sands Corp (LVS)
Las Vegas Sands is the largest casino operator in the world with a high share of the Asian market. Owns one of the popular casinos in Las Vegas The Venetian, the famous Marina Bay in Singapore and numerous facilities in Macau. The company has recently been focusing more and more on developing the Asian market in Macau, which has been hit hard by the unfavorable regulatory environment in China.
The company’s shares are listed on the New York Stock Exchange (NYSE) under the ticker LVS. Capitalization $26.3 billion
MGM Resorts International (MGM)
MGM Resorts is an international entertainment company. MGM operates such popular casinos in Las Vegas as Bellagio, Excalibur, Aria and Vdara. There is a large representative office in Macau.
The company’s shares are listed on the New York Stock Exchange (NYSE) under the ticker MGM. Capitalization $19 billion
Caesars Entertainment (CZR)
Caesars Entertainment is an American company that manages more than 50 casino, entertainment and hotel properties. In 2020, the merger of two large companies Caesars Entertainment and Eldorado Resorts (ERI) took place. All properties are concentrated exclusively within the United States. The biggest casinos in Las Vegas are Rio and Bally’s, which host the WSOP World Series of Poker every year (excluding 2020).
The company’s shares are traded on the US stock exchange NASDAQ under the ticker CZR. Capitalization $18.45 billion.
Wynn Resorts (WYNN)
Wynn Resorts is an operator of luxury hotels and casinos. In total, the company has 6 objects at its disposal: 2 in Las Vegas (Wynn and Encore casinos) and 3 casinos in Macau. Accordingly, most of the revenue comes from the Asian segment of the market.
The company’s shares are traded on the US NASDAQ stock exchange under the ticker symbol WYNN. Capitalization of $9.34 billion
Gambling industry ETFs
In addition to buying individual shares of specific casinos, it is possible to buy a whole portfolio of gambling industry shares at once through exchange-traded investment funds – ETFs. These are “BJK” by VanEck and “BETZ” by Roundhill.
VanEck Gaming ETF (BJK) is based on the MVIS® Global Gaming Index (MVBJKTR), which tracks gambling-focused companies such as casinos, casino hotels, sports betting, lotteries, gaming services, technology and equipment. The ETF has been traded since 2008 on the US stock exchange NASDAQ. This ETF is well suited for those who are interested in investing in the gaming industry.