Right now, the U.S. is nearing the end of the seasonal sweet spot of big-event sports gambling — the Super Bowl and Final Four have passed, and the Masters is upon us. And apparently Tiger Woods’ resurgence has made the Masters a bigger sports book trophy than usual, fueling what’s widely expected to be .
While investor have a number of reasons to get excited about gaming and casino stocks — really, they do — this ain’t one of ’em.
While sports gambling also helps bring people into the casinos (hotel revenue), and those same people probably hit up the slots or take in a show, sports gambling itself brings in a tiny amount of revenue. Here’s a quick look at 2010 revenues across all of Nevada’s sports books, based on information from the , vs. 2010 total revenues across the “big three” publicly traded gaming stocks, Wynn (NASDAQ:), MGM Resorts International (NYSE:) and Las Vegas Sands (NYSE:
):
As the AGA points out, while $2.76 billion was wagered across Nevada’s sports books, 94% of that money was returned in the form of winnings.
Past that, also of note was an estimate by the National Gambling Impact Study Commission that $380 billion in illegal wagers are made every year. Put up against those revenues, that’s a stark comparison.
If those estimated illegal wagers were on the books, even with 94% winnings returned, you’d be looking at $22.8 billion the coffers. No “right” or “wrong” on the gambling advocacy front, just a startling number to consider.
The short point: Casino stocks have plenty of potential and are worth looking into — just don’t get suckered into thinking a weekend of golf betting is going to push the needle too far.
Kyle Woodley is the assistant editor of InvestorPlace.com. As of this writing, he did not hold a position in any of the aforementioned securities. Follow him on Twitter at .
