A Look at the UK and Ireland’s Gambling Stocks at the start of 2022

Every financial year carries its share of ups and downs but it’s fair to say that the stock market in 2021 has provided something of a rollercoaster. With certain global issues as the backdrop, uncertainty in the economy has led to a volatile 12 months.

The last quarter of 2021 has, however, offered hope of a more consistent recovery. There are reasons to be optimistic as we continue deeper into 2022 with certain sectors showing sustained growth despite the challenges.

Stable Growth

Revenue from the gambling industry, both online and offline, has generally shown steady growth across the last decade. At the end of 2020, statistics showed that gross gambling yield in the UK stood at £5.89 billion. While that’s a drop from 2019, global uncertainty makes this understandable but there have been positive signs in 2021.

New operators are coming onboard on a regular basis, and this remains a crowded sector. The best performing online casinos have plenty of competition and each company has to be innovative in order to stay ahead of the chasing pack.

The position is similar in Ireland and, while certain stocks may have dipped, that does mean that this can be a good time to buy.

Relaxed Approach

One of the main reasons why the gambling industry is thriving in the UK and Ireland relates to its relatively relaxed laws. In many parts of the world, the legislation either outlaws the practise or they place very heavy restrictions.

In Britain, physical betting shops have been in place since the early 1960s based on legal rulings introduced by the Betting and Gaming Act of 1960. A similarly relaxed approach has been operational since the first digital sportsbooks and casinos began to emerge in the mid-1990s.

It all makes for a marketplace where new operators can open up to take advantage of that popularity. Naturally there is legislation in place and all sportsbook and casino sites must be authorised and regulated by the UK Gambling Commission.

Once tests are passed, they can open up and provide services. That ease of use and welcoming attitude to gambling across the UK and Ireland means that companies that are based here can be more attractive when it comes to considering stocks and shares.

The Major Players

It’s not all about those who provide gambling services and investors can also consider the subsidiary sectors. These would include software developers who are specifically in place to design new casino games.

Playtech are a good example of this, and this is one company who enjoyed a productive 2021. They are responsible for producing some of the best-known card and table games around and have also released many hundreds of popular slot machine titles.

At a high point in 2021, Playtech stocks had risen by a considerable 85.65% as it continued to grab a significant share of the market.

Sports betting software platforms and agencies have also enjoyed a productive year. Gamesys offers evidence of this with a growth of 62.28%.

As for casino and sportsbook operators, 888 Holdings were among the winners in 2021. The question, of course, relates to 2022 and what will happen moving forward.

Growth Areas

As with any sector it can pay to look for developing trends. As far as the gambling industry is concerned, this could involve taking a look at the phenomenon that is eSports. From a pleasurable leisure activity, video gaming has now developed into a multi-billion dollar industry with seven figure prize funds often published at the major tournaments.

The sports betting sector has been involved with eSports but not every operator has embraced it fully. Those that are behind the new phenomenon tend to publish a separate eSports website while others have made financial commitments via sponsorship and other commercial partnerships.

Daily Fantasy Sports is another area where significant growth could be seen in the coming 12 months. DFS is a fast-growing sector in North America and, while the UK and Ireland have been slower in terms of coverage, this could all change within the next year.

Fantasy sports may be seen as being entirely separate from sports betting but it has been extremely successful in the US. There is a blueprint in place and the market could be one to watch in the coming months.

Making a Choice

As will all market trading, there are no guarantees that gambling stocks and shares will go up this year. There are, however, many who believe that the sector will be stable and continue to develop in the coming years.

While 2021 provided a blip for overall revenue, the global picture of uncertainty meant that this was inevitable. One area for positivity concerns the continuation of major sporting events. 2020 saw many big competitions postponed and, to an extent that’s also been the case in 2021.

The Rugby League World Cup was postponed in 2021 but is set to return. With a more stable sports schedule, there will be more opportunities to place a bet and a settled calendar should lead to more consistent play among the betting community.

General confidence should also return and affect the markets in a positive way. It’s not quite a perfect storm but there is a platform for sports betting revenue to pick up once again and to resume its general upward curve in 2021 and beyond.