Why These Casino Stocks May See a Bull Market, Even If the Rest of the Market Is Selling Off

"Whether you're a gambling aficionado or not, most investors are well aware of how profitable casinos are. The house edge that they carry tends to produce very consistent profits over the long-term, given the law of large numbers. It's hard to lose money running a gambling outfit, and that's something that investors (and many municipal governments that rely on gambling-related levies) rely on."

"Of course, there are different degrees of operating excellence within the world of gaming, and that's always going to be true. Some casino operators are able to really push the limits of their edge, and how much they're able to bring home as a percentage of the overall amount gambled during a given quarter. Here are three of the best such casino stocks in the market, in my view, and why they're poised for continued outperformance over the long haul."

"In MGM's most recent quarter, the company posted mediocre results, with overall consolidated net revenues rising only 2% year-over-year. That said, the company's Chinese revenues surged 20% over the same time frame, and there are plenty of investors pointing to the company's international and regional operations as reasons to buy this stock. I'm intrigued by these numbers, and do think that the company's overall revenue growth should pick up if we see broader economic improvements in the coming years."

Casinos generate consistent long-term profits because the house edge produces reliable returns under the law of large numbers. Municipal governments and investors often depend on gambling-related levies and steady cash flows. Operating excellence varies across operators, allowing some companies to increase their effective edge and capture higher percentages of wagers. MGM Resorts International remains a leading operator with a Vegas base, international exposure, and plans to shift toward an asset-light model. MGM reported only 2% consolidated net revenue growth recently, while Chinese revenues rose 20%. International and regional operations are growth levers, and broader economic improvement could accelerate revenue gains.

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