Analysts Stay Bullish on Gambling Sector as Operators Consolidate Positions

Gambling sector analysts are confident that, despite sharp swings and regulatory challenges, the broader industry remains poised for sustained profitability. Rather than viewing recent turbulence as a warning sign, experts believe it will lead to stronger financial positions, more disciplined growth, and healthier margins across the industry.

Citizens Named Flutter a Top Pick

Citizens has emerged as one of the more vocal supporters of the gambling sector, with analyst Jordan Bender arguing that gaming stocks are suffering from overly pessimistic valuations. He noted that gambling stocks are trading well below their historical averages on an enterprise-value-to-EBITDA basis, likely due to investor fears over worst-case regulatory and competitive outcomes that may never fully materialize. 

Bender claims that companies in a position to turn their market share into cash can leverage current trends to secure significant profits. Flutter Entertainment is a perfect example of this sentiment. Citizens has named the operator atop pick heading into 2026, citing its diversified footprint, market leadership, and improving profitability profile.

While online sports betting and iGaming have faced challenges such as rising customer acquisition costs and higher taxes, Flutter’s size allows it to absorb shocks that might destabilize smaller operators. Analysts argue that this advantage becomes more pronounced as growth slows down and companies start to prioritize efficiency.

The Sector Is Positioned to Overcome Short-Term Challenges

Other names are also drawing renewed optimism. Genius Sports remains an outlier due to its robust revenue momentum and expanding role as a data and technology backbone for leagues and sportsbooks. DraftKings, which has faced scrutiny for its cash burn, is gaining credit for clearer paths toward sustained profitability. Super Group retains its popularity among investors looking for international exposure with improving margins.

Product diversification represents another pathway to success. Standalone casino apps, peer-to-peer fantasy products, iLottery, and prediction markets can create new growth opportunities. However, analysts caution that such innovations may not match the explosive growth rates seen in previous years. Some of these innovations may also bring new challenges for established operators.

Prediction markets are becoming a defining issue for 2026 as regulation remains uncertain. While legal clarity could eventually stabilize the segment, it currently directly competes with gambling operators. Even so, the broader outlook remains positive. Citizens estimates that the North American online betting and iGaming market could approach $54 billion in gross gaming revenue by the end of the decade, rewarding operators that practice patience and discipline.