As This Trend Grows, Look To Bet With The House…

I’ve never really been much of a gambler. Maybe a few bucks here and there for fun. Horse racing is my preferred game of chance. The Pari-mutuel system is similar to the stock market in that all participants place wagers among themselves (as opposed to playing against the house’s built-in advantage).

Whether you are betting on the ponies or next year’s World Series winner (my Cubs are a 35-1 longshot), you probably won’t win by blind luck. Just like investing, it takes some serious analytical skill to gain an edge over the masses.

Some sharp cookies are playing this game. You may have heard of James Holzhauer, the famous Jeopardy champ who notched 32 consecutive wins and took home $2.6 million in prize money.

His day job? Professional sports gambler.

Of course, I’m not advocating a career change. There’s big money to be had on the other side of all those bets – and that’s the focus of my most recent pick over at Takeover Trader.

How I’m Investing In This Trend

Just a few days ago, I laid out the case for why online sports betting is set to sweep the nation – and that investors have a rare opportunity to cash in on this massive trend while it’s still in the early stages.

If you haven’t read that piece yet, then I encourage you to go back and read it here.

Long story short, there’s big money to be made here. But the key to truly massive gains for investors is going to be identifying the critical players before they catch on with the larger public.

That’s where my latest pick comes in…

You see, land-based casinos know how to manage slot machines, table games, and sportsbooks. But rolling the dice via phone or tablet is (pun intended) a whole different ballgame. With their focus and resources elsewhere, many operators have found the best solution is to simply outsource this new service to the experts.

My latest Takeover Trader pick is a leading provider of real-money internet gaming products that handle all the unseen back-end functions — everything from account registration to game content to payment services to compliance and regulatory reporting. Casinos only need to tell their patrons where to point and click.

In exchange, this company gets a piece of the action.

This structure means that the more cash its partners haul in, the more fees they receive. Even better, the model is highly scalable. Just last quarter, the company posted 73% margins.

Now, I won’t reveal the name of this pick just yet. But to give you an idea of how hot this sector is right now, we’ve already made 28% on this pick in less than two weeks. And I think there’s plenty more to come…

A Takeover Target?

When I first broke into this business two decades ago, one of my first assignments was to cover the mega-mergers between MGM Grand/Mirage and Harrah’s/Caesars. At the time, we could scarcely imagine a day when a player could log in to an online account and play a few digital hands of blackjack or place a $100 bet on the Pittsburgh Steelers.

Heck, we didn’t even have smartphones then.

It’s a different world now. But the appetite for M&A activity hasn’t changed. Just a few days ago, MGM offered $11 billion for its online betting partner Entain. It’s worth noting that the bid (a 22% premium) was rejected as being too little.

So while my latest pick has a bright future over the next few years as a standalone company, it might be acquired for a juicy premium long before that.

Action To Take

Either way, you can understand why valuations are skyrocketing in this field. Voters in three more states (Louisiana, Maryland, and South Dakota) just gave the thumbs-up to online gaming. Hundreds of millions more legalized revenues will soon be up for grabs.

In the end, internet gaming and sports wagering will expand to all but a few states – to say nothing of international markets. And with many players leery about crowded poker rooms and sportsbooks during the pandemic, online penetration rates will continue to rise.

My advice: Even though I can’t reveal the name of my preferred pick in today’s piece, do yourself a favor and look into this sector closely. You may even find the “behind the scenes” players like this pick are the better bet for investors. Either way, if you’re looking for big-time growth, then this is one opportunity you won’t want to miss.

In the meantime, if you want to know what the absolute biggest themes of 2021 (and beyond) are going to be, then you need to check out our latest report…

You’ll discover the shocking reason we believe violence in Peru could push one $2 stock north of $40… how a revolutionary breakthrough in air travel could make early investors rich… and the “odd” reason one small group of mining stocks could soar in the coming months (they’ve done it before – more than once).

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