Analysts Remain Optimistic About the Gambling Sector Amid Industry Consolidation
Confidence in the Gambling Industry’s Long-Term Profitability
Market analysts remain optimistic about the gambling industry’s future, believing that despite recent volatility and regulatory hurdles, the sector is set for sustained profitability. Instead of interpreting recent fluctuations as setbacks, experts anticipate these challenges will foster more stable financial health, disciplined growth strategies, and improved profit margins across gambling operators.
Flutter Entertainment Highlighted as a Leading Investment Choice
Citizens analyst Jordan Bender has expressed strong support for the gambling industry, suggesting that current stock valuations are overly pessimistic. Bender points out that gambling stocks are trading significantly below their historical enterprise-value-to-EBITDA averages, largely due to investor concerns over regulatory and competitive risks that may never come to pass.
Bender emphasizes that companies poised to convert market share into cash are positioned to benefit from ongoing industry trends. Flutter Entertainment is a prime example of this potential. Citizens has singled out Flutter as a top pick looking toward 2026, praising its diverse market presence, leadership position, and improving profitability.
While the online sports betting and iGaming segments face obstacles such as rising costs to acquire customers and increased taxation, Flutter’s large scale gives it a buffer against shocks that smaller competitors might not withstand. As market growth slows, this resilience and operational efficiency are becoming increasingly important advantages.
Overcoming Immediate Challenges and Emerging Opportunities
Other companies in the sector are also gaining renewed positive attention. Genius Sports stands out because of its strong revenue growth and expanding role as a critical provider of data and technology services to sports leagues and sportsbooks. DraftKings, despite previous concerns about cash burn, is receiving credit for establishing clearer paths to sustained profitability. Super Group remains favored among investors seeking international market exposure combined with enhancing profit margins.
Diversifying product offerings is another key driver of future success. Innovations such as stand-alone casino applications, peer-to-peer fantasy gaming, iLottery, and prediction markets offer fresh avenues for growth. However, analysts warn that these new segments may not replicate the rapid expansion seen in prior years and may introduce new challenges for established operators.
Prediction markets, in particular, are expected to be a significant focus in 2026 due to ongoing regulatory uncertainty. While legal clarity in the future could stabilize this segment, prediction markets currently compete directly with traditional gambling operators. Nonetheless, the overall outlook remains positive, with forecasts from Citizens projecting that North America’s online betting and iGaming market could reach nearly $54 billion in gross gaming revenue by the decade’s end. Operators who maintain patience and discipline are likely to be rewarded in this evolving environment.
