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DraftKings, NeoGames, and Better Collective emerged as the top-performing gambling stocks of 2023 on Next.io’s watchlist.

These three companies experienced triple-digit gains and are undoubtedly ones to keep an eye on in 2024.

1. DraftKings

Investors in DraftKings had a bumper year as the company closed 2023 with a 209.5% surge in its stock value.

This significant growth was fuelled by DraftKings’ low valuation of $11.39 per share at the start of the year, offering investors a compelling opportunity.

By the closing bell of 2023, DraftKings reached $35.25 per share, showcasing consistent growth throughout the year with only occasional declines.

Key to the US operator’s success was its adeptness in acquiring customers.

In Q3 2023, DraftKings reported revenue growth of 57%, and the company noted that betting participation in multiple states was larger and growing faster than previously anticipated.

Looking forward, DraftKings’ own projections indicate a substantial expansion in the online sports betting and iGaming market. 

The operator anticipates the total addressable market (TAM) in the US to increase from $20bn last year to approximately $30bn in 2028.

Moreover, the company’s forecast for 2024 predicts revenue ranging between $4.5bn and $4.8bn, with further anticipated growth in subsequent years. 

DraftKings’ long-term forecast paints an even more promising trajectory, foreseeing revenue reaching the mid-$5bn range by 2025 and surging to $7.1bn by 2028.

Despite a persistent lack of profitability, DraftKings’ strategic advancements within the rapidly expanding industry set an optimistic tone for 2024.

2. NeoGames 

Supplier NeoGames soared to the second position among the best-performing stocks on our watchlist, boasting gains of 134.9% in 2023. 

Starting the year at $12.19, the stock surged to close at $28.63 on 30 December.

NeoGames’ stock rose last year primarily due to the proposed acquisition by Aristocrat Leisure

On 12 May, the stock value leaped from $12.84 to $27.17 when the acquisition was revealed.

Ever since that announcement, NeoGames’ stock has consistently traded at that level.

The deal was priced at $29.50 per share, valuing the company at approximately $1.2bn.

However, the end-of-year value indicates that NeoGames stock still trades below the proposed acquisition price.

Aristocrat and NeoGames expect the acquisition to be finalised during H1 2024.

3. Better Collective

Affiliate group Better Collective has emerged as the third-best performing stock on our watchlist, boasting an annual gain of 101.7%. 

Starting the year at SEK127.20 per share and closing at SEK256.50, the stock has shown steady progress over the past 12 months.

Better Collective’s success can be attributed to several factors.

Its strong presence in the US, fortified by successful acquisitions, has cemented its market position. 

Additionally, consistent achievement of financial targets has bolstered confidence in its future growth. 

The recent news of Better Collective’s planned acquisition of Playmaker Capital for €176m further underscored the firm’s ambitious expansion strategy.

It marked the group’s second largest acquisition to date after the acquisition of Action Network for $240m in 2021. 

The transaction is expected to close before the end of Q1 2024. 

Once completed, Better Collective anticipates it will become the Latam market leader, while also strengthening its position in the US.

Despite a remarkable run, the company faced a setback toward the end of the year, witnessing a share drop from SEK267.50 on 15 November to SEK220.5 on 16 November.

While reporting 26% year-on-year revenue growth to €75m in Q3 2023, CEO and co-founder Jesper Søgaard cautioned about a “short-term dampening impact.” 

Nonetheless, he added that Better Collective was in the process of transitioning from a cost-per-acquisition model to revenue sharing in the US market, which in the longer term is expected to yield positive results.

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