Investors looking for the best place to park some money need to pay attention to the latest from Morgan Stanley. Analysts with the financial firm have put together their preferences for the industries with the strongest growth potential in the U.S. as the coronavirus recovery begins and have given significant support to both online gaming and sportsbooks. This isn’t too surprising, given the fact that, when you’re at the bottom, the only way to go is up.
According to the financial brokerage giant, “The impacts of Covid-19 on macro trends and individual consumer behaviors will affect investing fundamentals for years to come.” As a result, Morgan Stanley has identified 50 “mega-trends” that are now receiving more attention as a result of the coronavirus pandemic and the initial phases of the recovery. Leading the way are gambling services, due to several factors.
There had already been a feeling at Morgan Stanley that sports gambling was going to be big business in the U.S. Last November, before COVID-19 came in, it predicted that the industry would grow to be worth around $8 billion by 2025. As a result of the global pandemic and the massive loss in revenue incurred by many states across the U.S., there will now almost certainly be a greater push for legalized sports gambling across the country, possibly even at the federal level. That could push the $8-billion figure much higher. The fact that DraftKings increased its value right in the middle of the pandemic speaks volumes.
As casinos in the U.S. were forced to halt operations due to public lockdowns, stocks began to plummet. However, this has been nothing more than a temporary glitch that won’t last forever. Casino executives know this, which is why many decided to take shares in lieu of cash as gambling operators tightened their belts. Despite current coronavirus hotspots appearing in the U.S., those investors who can part with their money would be wise to invest in casino stocks and then walk away, knowing that, within a decade, the return will be astronomical.
As with sports gambling and the warmer reception expected from states, online gaming could see more support from legislators. The small handful of states that now offer online gambling, like Pennsylvania and New Jersey, have been able to continue to receive revenue while the others are blowing through their savings, and many lawmakers may want to try to avoid a similar situation in the future. In fact, over half of the states are now looking at coming up short on their budgets by at least 10%. When you’re talking tens or hundreds of millions of dollars, that’s a significant amount.
In addition to sports and online gambling, verticals that touch the industries are going to become hot targets, as well. For example, payment system providers are going to see more interest, especially as the push for a cashless society continues. More eyes are opening to the power of digital currency and non-paper money as a means of handling financial transactions, and this is only going to grow stronger.
Now is the perfect time to make investments of almost any kind, provided investors can be smart about it. As always, avoid any investment opportunity that promises outrageous returns and only deal with reputable brokers and businesses. In addition, never rely solely on the advice someone provides – always do your own homework.
