4 Online Small Cap Gambling Stocks to Watch in May 2021

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The online gambling sector has gone from strength to strength while the rest of the economy has been battening down the hatches over the past year or so. That’s no real surprise, with people having more time on their hands and being forced to look to cyberspace for their entertainment with other options severely restricted. Yet now, as we optimistically look to things returning to some semblance of normality, gambling stocks are as buoyant as ever.

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We’ve all seen how companies like DraftKings and Flutter have been flexing their corporate muscles, not to mention flashing their wallets, with ambitious growth and acquisition strategies that have sent their share prices skywards. But there are also rewards to be found with the more modest players in the sector. Here are four of our favorite small cap gambling stocks that we’ll be watching with interest over the coming month or two. In addition to the ones mentioned here. More great small cap online gambling operators can be found using NoDepositExplorer.

 

Scientific Games Corporation

This tech company is based in Las Vegas and is focused on gambling through and through. With a history dating back more than 100 years, it has been established way longer than some of the stocks we will be discussing.

SGC’s products and services cover the whole gamut of gambling technology and include slot machines, both virtual and physical, lottery games, social gaming applications, table game copyrights, fixed-odds terminals and a whole lot more. It also has a sports betting arm. Back in the 1970s, SGC was at the forefront of bringing lotteries to the masses, and provided the technology for the Powerball and Mega Millions ticket sales that we take for granted today.

Of course, a glorious history does not automatically imply a sound future from an investment perspective, but experts feel SGC is well worth a gamble. Don’t be fooled by the recent contraction, SGC has been on the acquisition trail itself over the opening months of 2021, and this has led to increased debt. However, the analysts think it is now ideally positioned for steady growth over the rest of the year.

 

Score Media and Gaming

Score Media and Gaming is a name that will probably be unfamiliar to investors based outside the US, but it is one they would do well to spend some time researching. The Toronto-based company was founded almost 10 years ago by John Levy, who remains as Chief Executive Officer and Chairman to this day. Score Media owns and operates a whole portfolio of digital sports betting and media products by which it delivers the latest news, scores and sportsbook offerings.

The business divested itself of the TV network for which it used to be famous – this is now branded Sportsnet 360 and is owned by Rogers Communication. Instead, it has chosen to focus primarily on its sports media app, which differentiates itself by delivering highly personalized scores, stats, news and betting services to fans based on their sporting preferences, team affiliations, viewing habits and so on. As well as the media services, the company is a sports book in its own right, and it is the expansion of this activity in North America that is really getting investors to sit up and take notice.

 

International Game Technology PLC

IGT is a small company with a big reputation. The London-based firm was founded in 2014. It designs and creates games that are played both online and in physical casinos all over the world, as well as providing a range of support services, and has a strong US presence.

The current valuation metrics suggest that IGT is likely undervalued as we head into May, and it could be a tempting choice for value investors. Strong financial health and solid growth prospects, particularly in view of the evolving US landscape, all suggest that this is a stock that has the potential to outperform what is already a strong market.

 

Churchill Downs

Finally, a stock that is strictly speaking more medium than small cap, but that just cannot be overlooked given its performance over recent months. The Louisville company is, of course, best known for hosting the Kentucky Derby, and given that horse racing is its primary focus, it is fair to say that it has had to withstand its fair share of slings and arrows over the past year.

However, it has shown impressive performance over the opening months of 2021, and not just due to live sport returning to normal. It also operates seven different online sportsbooks, and the famous name has helped it to gain immediate brand loyalty in this super-competitive marketplace. In short, it is trading at 25 times earnings, a more impressive multiple than even the highest-profile companies in the sector.

 

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