Seven years ago, the U.S. Supreme Court overturned the federal ban on sports betting, moving the gambling industry from the fringes to the mainstream financial stage. As of now, 38 states, Puerto Rico, and the District of Columbia have legalized sports betting, each new state opening up broader growth avenues for the entire industry.
According to data from the American Gaming Association, U.S. commercial gambling revenue hit a historic high of $71.9 billion in 2024, marking the fourth consecutive year of record-breaking figures. For investors, profiting from this wave does not necessarily require placing bets themselves. Instead, a more stable approach is to invest in companies that take a "cut" from every slot machine spin, bookmaking, or lottery sale.
In recent years, exchange-traded funds (ETFs) themed around gambling have quietly become popular. Gambling ETFs like Roundhill BETZ and VanEck BJK bundle dozens of gambling companies, online platforms, and backend technology providers together, diversifying risk while potentially capturing the industry's growth returns.
The growth of the U.S. gambling market is not a fleeting trend but a structural one. In the first quarter of 2025, iGaming and mobile sports betting together reached a new revenue high of $6.39 billion, a 15% increase year-over-year, accounting for about one-third of the entire industry. It is widely expected that records will continue to be broken this year.
Investors who wish to avoid the risks of betting can leverage ETFs for diversified and professional market exposure. For example, Roundhill BETZ covers about 30 companies including DraftKings and Evolution AB; VanEck BJK includes gambling operators from Las Vegas, Macau, and global gambling equipment manufacturers; and the emerging Pacer ODDS ETF focuses more on digital entertainment and backend technology providers.
Beyond ETFs, there are other ways to participate in this market:
Entertainment Composite ETFs (such as PEJ) combine gambling, cruise lines, and theme park stocks, suitable for those bullish on the entire consumer entertainment industry.
"Sin" Themed Funds (such as VICE) combine gambling, tobacco, firearms, and other industries, diversifying cyclical risks.
Core Stock Investments: such as DraftKings (revenue of $4.8 billion in 2024), Flutter (parent company of FanDuel, expected global revenue of $17.1 billion by 2025).
Investing in Casino Real Estate: REITs like VICI Properties and GLPI collect rent from gambling properties, earning steadily regardless of players' wins or losses.
"Shovel Seller" Model: Technology providers like Nuvei (payment processing) and GeoComply (geolocation verification) play key roles in the industry infrastructure and also have growth potential.
Conclusion: Gambling is a "zero-sum game" for most players, but for gambling companies, it is a stable and continuous "rake" business. By investing in ETFs or related industry chains, investors can become beneficiaries of this massive cash flow. Just remember to thoroughly assess fees, liquidity, and policy risks before entering. If you want to be a shareholder of a casino rather than a gambler at the table, this might just be the rational way to bet.
