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.
We ranked the top five gambling and sports betting stocks based on path to profitability, competitive positioning, and ability to scale without burning cash. The winners aren’t the loudest brands. They’re the operators who can turn handle into earnings.
5. Penn Entertainment: ESPN Bet’s Uncertain Future
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. But with -36% return on equity and operating margins under 3%, Penn needs to prove it can convert ESPN’s reach into profitable customer acquisition. Until then, it’s a turnaround bet, not a growth play.
4. MGM Resorts: Diversification Without Margin Power
MGM Resorts International (NYSE:MGM | MGM Price Prediction) 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 pressure in sports betting or cyclical weakness in hospitality. At $34.10, the stock trades near its 200-day moving average with modest upside to the $42 analyst target.
3. Caesars Entertainment: Omnichannel Operator with Debt Baggage
Caesars Entertainment (NASDAQ:CZR) operates 50+ casino properties and runs Caesars Sportsbook, giving it an omnichannel edge. The company posted -$0.95 annual EPS in 2025, improved from -$1.26 in 2024. But Q3 2025 missed estimates by 800%, and the stock has collapsed 35% over the past year to $22.37.
Caesars trades at 0.4x sales but carries an elevated EV/EBITDA of 8x, reflecting a debt-heavy balance sheet. The forward P/E of 34x suggests profitability is near, but consistent earnings misses raise execution concerns. Analysts maintain a $32 target, implying 43% upside if the company can stabilize digital losses while leveraging its physical footprint. The omnichannel strategy makes sense in theory. In practice, it’s been expensive.
2. Flutter Entertainment: Scale and Profitability at a Discount
Flutter Entertainment (NYSE:FLUT), parent of FanDuel, Paddy Power, and Betfair, is the largest gambling operator in this group with $30.6 billion in market cap and $15.4 billion in revenue. The company posted $3.82 in annual EPS in 2025, down 37% from 2024’s $6.08 but still profitable. Q3 2025 beat estimates by 108%.
Flutter trades at 2x sales and 15x forward earnings, reasonable for a company generating $1.94 billion in EBITDA. The stock has fallen 35% over the past year to $174.70, largely due to the earnings decline and a brutal Q2 2025 miss. But Flutter’s global diversification and established profitability give it an edge over pure-play U.S. operators still burning cash. Analysts see $285 as fair value, implying 63% upside. If FanDuel maintains its U.S. market share and margins stabilize, Flutter is undervalued.
1. DraftKings: The Profitability Inflection Play
DraftKings Inc. (NASDAQ:DKNG) takes the top spot because it’s the closest to proving the digital sports betting model works at scale. The company posted $0.16 in annual EPS in 2025, its first full year of profitability after five consecutive years of losses. Revenue hit $5.46 billion, and quarterly earnings growth surged 185% year-over-year.
The stock has fallen 26% over the past year to $30.58, driven by a catastrophic Q3 2025 miss that saw the company report -$0.26 versus an expected -$0.01. But that miss obscures the bigger picture: DraftKings has crossed the profitability threshold. The forward P/E of 17x is reasonable if the company can sustain positive earnings, and analysts see $45 as fair value, implying 47% upside.
DraftKings operates in 25+ states and dominates online sports betting alongside FanDuel. Gross margins sit at 44%, and the company is now focused on extracting value from its customer base rather than acquiring users at any cost. The profitability inflection is real. If DraftKings can prove it wasn’t a one-year fluke, this becomes the default bet on U.S. sports betting growth.
The Profitability Question
Legalization created a land grab. The next phase is margin expansion. DraftKings and Flutter have crossed into profitability. Caesars and MGM are treading water. Penn is still searching for a model that works. Only the operators who can turn bets into earnings will survive the shakeout.
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