"When the Supreme Court struck down the federal sports betting ban in 2018, it unleashed a gold rush. Today, 38+ states have legalized sports betting, and Americans wagered over $150 billion in 2025. But the market is crowded, customer acquisition costs are brutal, and profitability remains elusive for many operators. The question isn't whether gambling is growing. It's who survives the shakeout."
"Penn Entertainment (NASDAQ:PENN) posted a -$0.59 annual loss in 2025, improved from 2024's -$1.62 but still deeply unprofitable. Q3 2025 missed estimates by 340%, and Q2 missed by 500%. The ESPN Bet transition was supposed to be a game-changer after ditching Barstool Sports. Instead, it's been a cash incinerator. Penn trades at 0.3x sales and below book value at $14.13, suggesting the market has written off the ESPN partnership. Analysts peg a $19 target, implying 33% upside."
"MGM Resorts International (NYSE:MGM) is the only stock on this list with positive one-year performance, up 3.7%. The company generated $17.3 billion in revenue across Las Vegas properties, Macau resorts, and BetMGM digital betting. MGM's profit margin sits at 0.4%, and earnings fell 70% year-over-year in Q3 2025. The company reported $0.20 in diluted EPS, giving it a trailing P/E of 170x. The forward P/E of 15x suggests analysts expect recovery, but thin margins reveal operational stress. MGM's diversified model hasn't insulated it from competitive pres"
Legalized sports betting expanded rapidly after the 2018 Supreme Court decision, reaching 38+ states and over $150 billion wagered in 2025. Market growth coexists with intense competition, high customer acquisition costs, and persistent unprofitability for many operators. Rankings prioritize path to profitability, competitive positioning, and ability to scale without burning cash. Penn Entertainment showed improving but still deep losses, missed quarters, and an ESPN Bet transition that burned cash while trading below book value. MGM Resorts produced $17.3 billion in revenue but suffered thin margins, a steep earnings decline, and stretched valuations despite diversification.
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