The gaming sector delivered another eventful week, with the Roundhill Sports Betting & iGaming ETF (NYSE: BETZ) closing in the green.
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.
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 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.
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 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.
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 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 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 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.
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.
Welcome to Gambling Consulting Authority (GCA) - Your Strategic Partner in Gambling Industry Advancement
