BETZ extended its year-to-date lead over the S&P 500 Index, which lost momentum and closed slightly lower last week amid fears of escalating trade tensions.

This Week’s Biggest Gains:

Esports Entertainment Surges Despite Financial Struggles

Esports Entertainment Group was the top gainer among the gaming stocks in our coverage universe, gaining 21.6% over the past week. 

The stock has been highly volatile over the past few weeks. Two weeks ago, it was down 16.2%, but following last week’s gains, the stock is up over 56% for the year. Still, it trades approximately 30% below its 52-week high.

The company, which voluntarily delisted from Nasdaq last year and now trades OTC, has stopped publicly reporting earnings. The stock’s low trading volumes and high volatility make it prone to manipulation and speculation. 

Despite last week’s rally, the company remains in severe financial distress, with ongoing losses, mounting debt, and negative shareholder equity.

DraftKings Rebounds on Valuation Optimism

DraftKings was among the other major gainers with the stock rising 5.4% last week. 

It was among the biggest losers in the preceding week on fears that the provisions of the One Big Beautiful Big Act (OBBBA) would dampen gambling activity.

For context, the Act mandates a 90% deduction for losses (versus the previous regime of 100% deduction), which could result in gamblers paying taxes even if they don’t make a profit.

Investor sentiment improved after analysts argued the sell-off was overdone. 

Morgan Stanley raised its target price to $52 while maintaining the “overweight” rating, while Citi maintained its “buy” rating and $58 target price on DraftKings. 

The brokerage sees DraftKings shares as undervalued in light of Flutter’s acquisition of Boyd Gaming’s 5% equity stake in FanDuel, which values FanDuel at $31 billion. 

According to Citi, DraftKings trades at a 7% discount to the implied valuation of 17.4x 2026 EV-EBITDA for FanDuel.

Mizuho also echoed similar views and said that while FanDuel and DraftKings have similar market share, the former’s implied market capitalization of $40 billion in the transaction is roughly twice DraftKings’ market capitalization.

Wynn Resorts Extends Gains

While it didn’t repeat the 14% growth from last week, Wynn Resorts’ stock rose over 5.2% last week, which extended its year-to-date gains to 29%. 

On Monday, Wynn Resorts stock rose nearly 3% after Goldman Sachs reinitiated coverage with a Buy rating and $122 price target.

Goldman Sachs joined JPMorgan, which also initiated coverage of gaming stocks last month. Apart from Wynn, Goldman Sachs put a “buy” rating for Caesars Entertainment and a “neutral” rating for Las Vegas Sands. The brokerage, however, rated MGM Resorts as a “sell.”

Golden Entertainment Turns Positive for the Year

Golden Entertainment stock gained nearly 5% last week, even as there wasn’t any company-specific news. The company did pay a 25-cent dividend the previous week, but its record date was June 25. Nonetheless, after last week’s rise, the stock has turned positive for the year.

Golden Entertainment is focused on deleveraging its balance sheet through the sale of non-core assets, allowing the company to focus on its operations in Nevada primarily.

The Week’s Biggest Losers

Skillz Sinks on Broader Market Weakness

Skillz was the worst-performing stock in our coverage universe and lost over 7% last week. While there was no company-specific news last week, the stock traded on a weak note amid broader market weakness. 

Moreover, as a loss-making enterprise, Skillz was particularly under pressure last week. It has a 5-year beta of 2.7x, which means that it is 2.7x as volatile as broader markets.

The company’s paying monthly active users have fallen by over 41% over the last two years. It has been cutting marketing and operating expenses to reduce cash burn, but it has yet to show evidence of a turnaround.

Gambling.com Declines Amid Tariff Fears

Gambling.com Group Ltd was another major loser, falling nearly 5% last week. The stock was roughly flat for the week but fell over 4% on Friday amid US-EU tariff escalation rumours, which led to a market sell-off.

Playtika Slides Further

Playtika Holdings is back on the list of the biggest losers as the stock lost 4.8% last week, despite no major company-specific news. 

The stock is now down 32% for the year amid concerns that the company’s user base is shrinking due to its reliance on older mobile game titles and questions about long-term growth prospects. 

Penn Entertainment Falls on Regional Revenue Drop

Penn Entertainment rounded up the top losers, shedding 3.5% for the week. The stock was in the green until Thursday but fell 7.6% on Friday after Indiana and Iowa reported a year-over-year decline in gaming revenue for June.

Additional tariff-related worries further pressured the stock, which underperformed compared to rivals such as Sands Las Vegas, DraftKings, and MGM Resorts. 

Other Major Industry Developments Last Week

On Wednesday, Blackstone-backed gaming company Cirsa went public in Barcelona. 

While the IPO was oversubscribed multiple times, it closed at the IPO price of €15 on its first trading day and has remained flat since then, closing at the same level last week. 

While the IPO saw strong interest from investors, concerns over the company’s high debt pile, heavy reliance on Latin American markets and online gaming, and rich valuations dampened sentiments.

In another development, Senate Republicans blocked attempts to roll back the gambling tax provisions in the OBBBA. The new rules, which will take effect next year, are expected to generate $1.1 billion in tax revenue over the next eight years.

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Melco Resorts Leads the Pack

With gains of over 21%, Melco Resorts was the best-performing gaming stock in our coverage universe. 

The stock was also among the biggest gainers in the preceding week and has now extended its year-to-date gains to nearly 48%. Last week’s rise could be attributed to optimism over strong growth in the Macau market.

On Tuesday, Macau reported a 19% YoY increase in June gaming revenue, which was over twice what analysts were expecting. 

As a result, on July 1, JP Morgan Chase & Co. upgraded Melco from a “neutral” rating to an “overweight.” On July 7, Wall Street Zen upgraded the stock from a “hold” rating to a “buy” rating.

Outside Macau, another factor contributing to the surge in share price was Melco’s announcement on Monday that it will open its City of Dreams Sri Lanka resort in early August. 

Douyu Stock Rises, Still Down Year-To-Date

Douyu International Holdings was the second-largest gainer, with the stock adding 18% last week, thanks to an over 10% spike on Friday..

Despite recent gains, the stock is down over 32% for the year and approximately 62% lower than its 52-week high due to concerns over the company’s financial health.

Wynn, MGM, and Las Vegas Sands Ride Macau Wave

Wynn Resorts gained 14% last week, with the gains primarily attributable to the positive June revenue update from Macau. The stock is now up 22.6% for the year, which, although below BETZ, is well ahead of the broader market.

MGM Resorts also outperformed last week after the update from Macau, gaining more than 11%, which helped it bridge its year-to-date losses and turn positive for the year.

Also, with an 11% growth, Las Vegas Sands rounded out the top beneficiaries of the strong Macau Results.  

Bally’s Pops on Intralot Deal

Bally’s Corporation was among the major gainers last week, with the stock increasing by over 12%. 

On Tuesday, Bally’s Corporation shares rose almost 16% after Intralot S.A. announced that it would acquire the company’s International Interactive division for €2.7 billion, paid in a mix of cash and stock.

Despite the influx of cash to support mounting debt, Fitch Ratings placed Bally’s on rating watch negative, indicating Bally’s financial stability may deteriorate because it is selling a profitable unit and becoming more exposed to other risks.

Huya Continues to Sink, DraftKings Feel Big Beautiful Bill’s Effect

Huya lost a third of its market capitalization last week, continuing its dismal run from the previous two weeks. The stock was quite volatile last week, plummeting 36% on Monday, followed by a rise of over 13% on Tuesday.

Even a generous ex-dividend payout of $1.47 (part of a planned $400 million return to shareholders) could not save the stock from the Monday freefall.   

The NYSE applied “due bill” procedures for the dividend, which mandated that those who bought the stock on or before the record date of June 17 but before the payment date of July 1 were eligible for the dividend, even if the trades were settled after July 1. The procedure was implemented due to the high dividend yield compared to the stock price.

While the fat dividend is succor, considering the stock trades at under $2.50, Huya has been a long-term underperformer and trades at just about one-tenth of its all-time high. The tech crackdown in China, coupled with a structural slowdown in the world’s second-biggest economy, has taken a toll on the stock.

Moreover, Huya faces intense competition from Chinese rivals. It has also posted GAAP losses for three consecutive years, which has made the market apprehensive about the company’s future.

Sea Limited Struggles with E-Commerce Headwinds

Sea Limited was among the other prominent losers, losing 5.7% last week. 

The company is not a pure-play gaming company; while its subsidiary, Garena, is in the gaming business, it is a global tech conglomerate with a presence in e-commerce and the fintech space. 

The recent decline is attributed to concern over higher competition in the other two businesses, particularly e-commerce, where TikTok Shop is gaining ground.

Additionally, several institutions, including the Teacher Retirement System of Texas and Sumitomo Mitsui Trust, reduced their holdings, which triggered further pressure.

DraftKings Hit by New Gambling Tax Concerns 

DraftKings stock lost 3.5% last week, which is linked to the passage of President Trump’s signature tax and spending bill, dubbed the One Big Beautiful Big Act (OBBBA). 

The Act would raise taxes for the gambling industry, as it mandates a 90% deduction for losses, which could result in gamblers paying taxes even if they don’t make a profit. For context, under current regulations, all gambling losses can be deducted from income up to the total winnings.

“I’ve spoken to many clients, and they’re very concerned,” said Zachary Zimbile, an accountant with experience in gambling regulations. He added, “If you add a 10% penalty, it’s going to eat into a lot of their profit.”

Separately, last week, DraftKings announced the launch of its Responsible Gaming tool named “My Budget Builder,” which lets players set customized limits and receive easy reminders.

Genius Sports Sees Volatility Despite Index Inclusion

Genius Sports also closed in the red last week despite its inclusion in the Russell 3000 Index. Inclusion in any index means that passive funds tracking that index must necessarily buy the stock in the same percentage as the index.

While usually stocks rise on inclusion – and Genius Sports did gain on Monday (the day it was included in the index) – it subsequently pared gains amid concerns over the impact of Trump’s tax bill provisions on gambling revenues.

The 3% decline for the week showcases the recent volatility of the stock. In the past few weeks, it has posted growth followed by declines and vice versa. 

Still, Genius Sports’ stock is performing well for the year. It’s up almost 8% over the past month, primarily driven by a new NFL deal, and for the year, it has grown over 18%. 

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