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The sports betting industry is continuing to grow. In the UK alone, there are more than 6,000 betting shops as well as some huge companies providing people with the option to gamble online. The gambling industry in total was valued at £14.7bn in 2022.
Any industry of this size should be taken very seriously when it comes to stocks and shares. For those who make the correct decisions, it can be an opportunity to make money out of stocks. Of course, a bit like the gambling these companies offer, there is risk involved, but many people who trade stocks and shares hold gambling stocks and shares.
In this guide, we’re going to explore the basics of stocks and shares and how to invest in sports betting stocks in 2023. Fortunately, it has become easier than ever to make trades, but the key is still making the correct choices.
Choosing companies to back
Before we actually explore the logistics of buying and holding stock, we’re going to look at how you should choose gambling companies to invest in. This is not a decision to take lightly and is crucial to your potential success.
Evaluating companies can be done in a few different ways. One method is to consider what they are offering customers, and the sort of features the platform offers including user interface and ease-of-use as well as extra features such as free bets and bonuses for customers.
You wouldn’t invest in a company with a poor product, and this is true for gambling companies as well as those who make physical products. It is easier than ever for customers to jump ship and start to spend their money elsewhere if they aren’t happy, as the gambling industry is so competitive. This means that personal experience and understanding of the company are key factors for making your choice. Would you be happy with the service they provide?
Checking the charts and any industry buzz is the next step when it comes to choosing companies to back. A quick look at news stories and press releases may teach you more about the recent history of the company and tell you about any specific plans they have. For example, they may be linked with a merger, or they may have announced that they are expanding into new territories. This kind of thing can influence decisions on whether to buy shares in the company.
On the other hand, you may find that the company is rumoured to be struggling financially, or laying off staff, for instance. This could be a sign that all is not well and that the stocks and shares may dip in the coming months and years. Stocks and shares chat forums are another option for discussing potential investments and the state of certain companies.
As you will already be aware, there is an inherent risk with all stocks and shares, but plenty of people make a success out of trading, and many gambling shares in the UK have consistently risen for many years, though peaks and troughs are inevitable.
Understand holding companies
If you’re new to investing in gambling companies, this might be one of the more confusing aspects to get to grips with. The brands that we know and use don’t tend to be the names of the companies.
Thanks to a world full of mergers and acquisitions, companies often own and operate a few different brands under one specific holding company name.
For instance, if you were to look to invest in the companies Paddy Power, Betfair, Fanduel or Pokerstars, you would need to invest in the holding company that owns and operates these brands, which is called Flutter Entertainment and can be found under the symbol FLTR. This means you also need to invest in the whole holding company and its portfolio of other companies.
If you are just looking to invest in Paddy Power, for example, it isn’t possible to do so without investing in the whole of Flutter and its brand.
How to invest
Ready to invest? The first step is to choose your trading account type and open a trading account with a brokerage in the UK.
A standard trading account allows people to buy and sell their shares freely, but some people choose to use a Stocks and Shares ISA, which means that capital gains and dividends are tax-free. People can add up to £20,000 to one of these accounts each year.
It is also possible to use a Self-Invested Personal Pension where up to £40,000 can be added each year, but there is no option to withdraw until you are 55 years old.
The steps are as follows:
- Identify the company you wish to use to invest in stocks and shares and find a reliable brokerage.
- Choose your account type and sign up using your personal details.
- Work out which companies or company you would like to invest in and the maximum offer that you will put in for the shares, the prices can vary slightly.
- Buy your stocks and shares. It is usually pretty straightforward to put in an offer and obtain the stocks and shares you are looking for.
Of course, this is a simplified version of the process to becoming a stockholder, each brokerage has slightly different processes and some of them require you to show identification documents, for instance. Most of them make it easy to invest, as it is in their interests to be easy to use.
Conclusion
If you’ve always fancied yourself as an investor, or you just think the gambling industry is going to continue to boom and wish to invest in this success, it is easier than ever to do so. Make sure you understand the risks and the processes before signing up for an account and starting to invest in gambling companies and their holding companies.
