Gaming Stocks Continue Their Rebound, but Geopolitical Tensions Could Spoil the Party

Gaming stocks rebounded last week, and the Roundhill Sports Betting & iGaming ETF (NYSE: BETZ) rose 2.4% while the S&P 500 Index closed in the red. It was the second consecutive week when BETZ outperformed the broader market, but the rising tensions in the Middle East could spoil the party.

Penn Entertainment and Caesars Entertainment were among the top gainers, while Playtika Holdings and Wynn Resorts were among the losers.

Biggest Gainers

Penn Entertainment (NYSE: PENN) +20.12%

Penn Entertainment stock rose over 20% last week and turned positive for the year. The price action could be attributed to the Q4 2025 earnings release, in which the company beat both the top and bottom lines.

Penn’s Q3 revenue rose 8.2% year-over-year to $1.81 billion, which was slightly ahead of the $1.76 billion that analysts had expected. Importantly, it generated an adjusted EPS of 7 cents while even the most bullish estimate called for a loss in the quarter.

Following the shift away from the expensive ESPN Bet licensing deal to the internally controlled theScore Bet platform, the segment achieved positive adjusted EBITDA in December. The company attributed the turnaround to “iCasino momentum, disciplined cost management, and strong online sports betting hold rates.”

Management reaffirmed that the Interactive division is on track to reach breakeven in 2026, a major milestone for a segment that had previously been a significant cash drain.

Analysts were impressed with Penn’s Q4 earnings, and Wells Fargo upgraded the stock from an “underweight” to “equal weight” while assigning a target price of $16, while Deutsche raised its target price by $1 to $17.

Caesars Entertainment (NYSE: CZR) +17.99%

Caesars Entertainment was among the major gainers last week, adding nearly 18% to its market capitalization. The gains, the bulk of which came on Thursday, were attributable to reports of multiple acquisition bids for the company, whose stock price has sagged in recent years and was trading near its 52-week lows before the report.

The Financial Times reported that Texas billionaire Tilman Fertitta, who owns the Golden Nugget casino chain and the NBA’s Houston Rockets, has submitted a bid for the company. Fertitta has a history of aggressive expansion in the gaming and hospitality sectors.

If the deal were to go through, it would be among the most significant takeovers ever in the gaming industry. Notably, the gaming sector has been in turmoil amid concerns that prediction markets are taking business away from legacy companies. Reports of Caesars Entertainment’s takeover led to upward price action in peers like MGM Resorts, driven by expectations of industry consolidation.

Supergroup (NYSE: SGHC) +8.08%

Supergroup made it to the list of major gainers for the second consecutive week, which helped it narrow its YTD losses to just over 10%. Last week’s gains followed an impressive Q4 2025 earnings report in which the company beat both the top line and the bottom line, with annual revenues rising 22% to $2.2 billion and EBITDA surging 57% to $560 million.

The company’s monthly active customers reached a record high of 6.1 million, up 16% year over year.

Along with a stellar Q4 report, Supergroup provided upbeat guidance and revenue of at least $2.55 billion and adjusted EBITDA of over $680 million. The company held cash and cash equivalents of $513.2 million at the end of 2025 and raised its quarterly dividend target for this year to a minimum of 5 cents, up from 4 cents last year.

Biggest Losers

Playtika Holdings (NYSE: PLTK) -10.95%

Playtika’s stock fell nearly 11% last week, making it the biggest loser in our coverage of gaming stocks. The stock is now down 21.8% for the year and trades nearly 46% below its 52-week high.

Last week’s price action was driven by the company’s Q4 earnings release. Playtika reported revenues of $678.8 million, which was up 4.4% YoY. However, its net loss ballooned to $309.3 million due to a non-cash impact from the remeasurement of contingent consideration related to the earnout payment tied to the SuperPlay acquisition. Its adjusted net income came in at a positive $89 million, but the figure failed to enthuse investors.

Playtika expects 2026 revenue to be between $2.70 – $2.80 billion and adjusted EBITDA to be between $730 million – $770 million. The company suspended its quarterly dividend to “preserve flexibility” even as it said that it would keep its buyback program open. Dividend suspensions are invariably negative for any stock and signal uncertainty over profits and free cash flows; it’s quite usual for stocks to fall on such announcements.

Wynn Resorts (NYSE: WYNN) -5.82%

Wynn Resorts fell nearly 6% and continued its dismal run for the second consecutive week. The stock fell the previous week after its Q4 earnings missed Street estimates.

Last week’s decline appears to be a continuation of the downtrend from the previous week. Moreover, last week’s hotter-than-expected wholesale inflation report led to a sell-off in high-capital-intensity businesses like Wynn, which carries a total debt load of approximately $10.55 billion.

Wynn also reported a cybersecurity incident last week and said that “an unauthorized third party acquired certain employee data.” The incident also dampened sentiment for Wynn, and the stock extended its YTD loss to over 10%.

Sea Limited (NYSE: SE) -5.7%

Sea Limited also fell by more than 5% last week and is now down almost 15% for the year. 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 fintech.

The stock has looked weak after peaking near $200 last year amid concerns that artificial intelligence (AI) could hurt its business. We have seen a sell-off across software and fintech stocks amid fears that AI could take a toll on their businesses.

Meanwhile, Bernstein analyst Venugopal Garre believes the fears are overblown and, in a note last week, noted that Sea is “unlikely to be displaced purely by AI,” citing its partnerships with AI developers and its entrenched infrastructure.

Brokerages are overall bullish on SE stock, and its mean target price of $189.14 is over 75% higher than last week’s closing price.

Major Gaming Industry Developments

Amid the evolving regulatory landscape for prediction markets, last week the Commodity Futures Trading Commission (CFTC) issued a high-level advisory asserting its “exclusive jurisdiction” over event contracts. This is a direct shot at state regulators who have been moving to classify platforms like Kalshi and Polymarket as illegal gambling.

The move came days after CFTC Chairman Michael Selig backed the growing segment while lashing out at states looking to regulate the sector.

Among other regulatory news, the Indiana Legislature sent a bill to the Governor on February 28 that would officially ban sweepstakes casinos, adding to a growing list of states targeting the “gray market” sweepstakes model.

Looking at M&A activity, last week Boyd Gaming said that it would sell Sam’s Town Shreveport to Bally’s Corporation.

Elsewhere, data released by the Swedish Gambling Authority showed that gross gaming revenue in the country rose 1.3% last year.

There were several notable earnings last week. Flutter Entertainment released its Q4 earnings and missed on both the top and bottom lines. The company expects its 2026 revenues to be between $17.75 billion and $19.05 billion, which was short of the $19.34 billion analysts had expected.

Light and Wonder stock also fell after its quarterly report last week, as while the company’s revenues rose 12% in the quarter, it posted a net loss due to the costly settlement with Aristocrat Leisure.

Brightstar Lottery Plc, however, reported better-than-expected earnings with revenues rising 3% YoY to $668 million in Q4. However, its EPS fell 21% to 32 cents in the quarter.

This week, Accel Entertainment, Genius Sports, and Sea Limited are scheduled to release their earnings.