Do you invest in any gaming industry stocks or mutual funds?

The gaming industry (casinos and related, etc.) is one that I've, more or less, ignored over the years. I'm not entirely sure why, so I'm doing some research, if for no other reason than curiosity.

As such, I thought I'd toss it out there: have you invested in any gaming industry stocks or mutual funds? Why so? How has it worked out?

Thanks much.

 

I am not that rich as to invest in the gaming industry. We have here a local lottery called STL - small town lottery - that is offering franchise to the rural folks. I am from an urban place but have relatives in the provinces so I inquired. Whoa, the franchise is very expensive, it runs into millions of pesos (more than $100k). But the person in the office said the STL franchisee is sure to earn because rural folks bet on that numbers game. Maybe when I have enough cash then I can invest in that.

 

Gambling would be a better choice of words than gaming as quite frankly I thought you were talking about video games.

But no, haven't invested in anything gambling related. I think they are quite a risky investment because a lot of politicians try to make gambling disappear... then there is also the point that now when the economy isn't doing too well these companies really suffer from a lack of customers.

 

For whatever reason, "gaming industry" is the euphemism used here in the States. It is likely used is that it covers more than just casinos, but also equipment manufacturers, resorts, sports betting, etc. The regulatory factor is somewhat of concern, but there are some gambling areas that are never going away (e.g., Las Vegas, Atlantic City, etc.), are unlikely to go away (e.g., Native American casinos), and others that are a little more likely to get hit (e.g., local areas that tolerate limited gambling like in NOLA). On the other hand, online poker was virtually destroyed by the SCOTUS ruling United States v. Scheinberg.

All that said, indeed, the volatility is what has kept me away. That and the industry got positively pulverized in in the 2008 meltdown. It has come back some since though. Anyway, I thought it would be interesting to kick around. Thanks for the replies thus far.

 

One of my investment checklist criteria is that I must understand how the business makes money and thus determine how confident I am that the business can keep repeating and improving upon it's historical performance. That is: is it a business I understand? I haven't taken the time to understand the gambling industry yet, so they are a no-go for me. Especially when I think there are other sectors (e.g. retirement, aged care and health related) that I feel are far more worth my time to evaluate and invest in.

 

Here in the UK, gaming regulation was liberalized to allow companies to advertise on TV. Because of this, bookmakers and casinos have seen a surge in profits in the last few years. I don't know if this has peaked, or is still on the rise, but if you're looking at this sector then it's well worth your time analyzing the UK markets to see if you spot any opportunities.

 

I have read that in the UK, and in Europe in general, that gambling is much more relaxed than here. It is illegal in most states, though there are exceptions (like Nevada) and since Native American tribes are exempt from those laws, they have been sprouting up since at least the 1990s. Some territories, like Puerto Rico, it is legal too.

 

Yes the laws are better in Europe. It's still somewhat regulated but it's legal and the companies that do it online are allowed to offer their services inside the EU area (with a couple of exceptions)

 

I have a couple of domestic gaming companies in my portfolio and I have to say they have performed well in comparison to my expectations. I rarely or almost never invest in mutual funds.