With most online casino players more focused on when to double down in blackjack or learning how to play craps, many are surprised to learn that it's possible to invest in the very sites they play on.
How? Simply by buying stock in the companies that own and operate them.
Major online sites such as bwin, PartyPoker and PartyCasino are all owned by bwin.party digital entertainment, which is traded on the London Stock Exchange (LON: BPTY).
Many large online sportsbooks are also publicly-traded, including Betfair (LON:BET), Ladbrokes (LON:LAD), William Hill (LON:WMH) and SportingBet (LON:SBT).
As far as traditional brick-and-mortar operators, investors have plenty of options there as well headlined by the Las Vegas-based trio of gambling giants Las Vegas Sands Corp (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN) and MGM Resorts International (NYSE:MGM).
Whether or not investing in gambling is a smarter wager than betting it all on black at online roulette is a matter of opinion and investing savvy.
But a recent article at Data Explorers does uncover some trends as far as short-selling that point you in one direction as opposed to another if you do decide to invest in the gambling sector.
Tracking the short interest in a particular stock is often a good indicator of what sectors and stocks may struggle, as short sellers are banking on a company's stock declining when they take a position.
It's not a perfect barometer but there's generally a good reason that many investors short a stock, so rising short interest can be a signal of trouble to come and stocks to avoid.
The stocks of UK casino companies are among the most heavily shorted, with investors betting that they'll decline in coming months.
Betfair is a particular favorite with shorts, as recent management changes and uncertainty over its poker product with the potential sale of Ongame (which powers their poker platform) could be weighing on its prospects and negatively impacting investor sentiment.
As far as stocks holding up well, it's primarily the big US casinos that have been aggressive in expanding into growing gambling markets such as Macau and Singapore.
Economic turmoil in Europe and a stagnant US economy could likely drag down earnings for companies solely operating in those markets.
But gambling operators with a more diversified revenue stream around the world can still churn out profits, especially those operating in Macau where gambling revenues continue to soar.
