In April, Flutter Entertainment and The Stars Group agreed to merge to create the world’s biggest online gambling company. In Australia Flutter owns Sportsbet and The Stars Group owns Bet Easy, which was formed from the acquisition of William Hill’s Australian operation and Crown Resorts’ Crown Bet. Webjet (WEB:ASX) is a great stock, but some profit taking is in order after soaring gains this year. Sydney Airport looks like a hold and beware casino stocks and other tourism companies that will rely on ever-increasing numbers of Chinese tourists in the next few years. Webjet – five-year performance chart. Source: nabtrade.

A recent study has revealed that Australia’s online gambling spend increased by 67% in the first week of April. The figures were based on a weekly sample of transactions of 250,000 Australian consumers.

Could these S&P/ASX 200 Index (ASX: XJO) shares be positioned to benefit from this alarming change in consumer spending behaviour?

Tabcorp Holdings Limited (ASX: TAH)

Despite climbing higher in recent weeks, the Tabcorp share price has slumped more than 30% in 2020, driven by its underwhelming 1H20 financial performance. The company has experienced challenging conditions for its wagering, media and gaming services that contribute approximately 46% of revenues, while its lotteries and Keno services did the heavy lifting to push the group’s first-half earnings growth into positive territory.

The lotteries and Keno business performance was driven by a strategic Powerball game change and the acceleration of digital and marketing investments. This segment delivered a 12.4% increase in revenue and 16% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) in 1H20. Its digital platform is growing strongly and now represents 26.7% of turnover.

While its digital segment may benefit from the coronavirus, its contribution to the group’s overall revenue is still small. On the other hand, revenue from its Australian licensed venues, TAB agencies and on-course outlets accounted for more than a quarter of Tabcorp’s 1H20 revenues. These revenue streams will be adversely impacted given the shutdown of non-essential businesses and social distancing rules, as well as the suspension of most major sports.

Tabcorp is now seeking to mitigate the impact of COVID-19 by ramping down its operating and capital expenditure. Ultimately, the business model still has a significant retail dependency and I believe current challenges will likely offset any benefits.

Jumbo Interactive Ltd (ASX: JIN)

While digital lotteries may represent a small segment of Tabcorp’s business, it is the complete opposite for Jumbo – digital lotteries is almost its entire business. Jumbo’s flagship product is the Oz Lotteries website and mobile app.

Jumbo provided a COVID-19 market update on 1 April 2020, stating: “Prior to the onset of the COVID-19 crisis, almost 75% of all Australian lottery tickets were sold via retail channels. With the expected impact that social restrictions will have on retail channels, the company is well placed for an increase in online lottery demand”.

Jumbo currently estimates that FY20 revenue will increase between 5% to 7% on FY19, while net profit after tax (NPAT) is forecasted to decline between 4% to 7.5%.

The Jumbo share price has fallen more than 50% since hitting an all-time high in October last year. Given its current valuation and potential earnings tailwinds moving forward, now may be an opportune time to invest in a recovering growth story.

For more ASX shares that are poised for a rebound, take a look at the report below.

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Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why these ASX gambling shares could benefit from a shift in consumer behaviour appeared first on Motley Fool Australia.

LISTED online gaming company Centrebet International says it will offer gambling on the S&P/ASX 200 index.

Centrebet hopes it will be the 'next big thing in financial betting', by allowing punters to bet on the monthly finish line of the the local market index.

Centrebet's media chief, Neil Evans, said the new punt followed the introduction of betting on the Reserve Bank's official monthly Interest Rate moves almost two years ago.

'In that time, nearly $1 million has been bet with us on the RBA's rate decision. Now, market punters can bet on the ASX 200 indicator, with three end-of-month prices regularly updated,' Mr Evans said in a statement.

'This is something we have been working on for months, and believe it will ignite a new wave of financial punters.'

Favourite in the March 31 market close was 4900.0 points at $2.00, ahead of below 4800.0 at $2.70.

Online Gambling Stocks Asx Price

The middle band of 4800.0 points to 4900 points was $3.50 outsider.

'Punters will now be watching the betting moves as much as the ASX indicator itself as they try and swoop on the winning option,' Mr Evans said.

In February, Centrebet booked an 18.6 per cent rise in first half net profit to $6.26 million.

Online Gambling Stocks Asx Gainers

At 12:38 AEDT, the S&P/ASX 200 was up 43.9 points at 4811.1, while Centrebet shares jumped 12 cents, or 8.11 per cent, to $1.60.

Online Gambling Stocks Asx Etf

Originally published asCentrebet to launch ASX gambling