Gambling stocks slide as Brazil ban and UK tax fears bite
Shares in Better Collective, Rank Group, DraftKings and others fell sharply in September amid Brazil's betting ban, UK duty speculation and the collapse of People Inc's MGM takeover bid, according to EGR.
Several publicly listed gambling companies saw their share prices come under pressure through September, as a mix of regulatory shocks in Brazil, tax uncertainty in the UK and a collapsed takeover bid in Las Vegas weighed on investor sentiment, according to EGR.
Better Collective was among the hardest hit after disclosing the likely impact of Brazil's ban on online sports betting and igaming, due to take effect from 6 October under a provisional measure signed by President Luiz Inácio Lula da Silva. The affiliate group had expected Brazil to generate around 12% of its 2026 revenue, EGR reports.
In response, Better Collective halted its share buyback programme, revised its 2026 guidance and withdrew its outlook for 2027 and 2028. Its dual-listed stock fell roughly 25% on 28 September alone and was down 37% over the month as a whole, closing at SEK70.20 on 30 September against SEK116.6 at the start of the period.
Rank Group, owner of Mecca and Grosvenor, also lost ground on the London Stock Exchange ahead of the Autumn Budget, where Chancellor John Healey is expected to address machine games duty. The group runs 50 Grosvenor casinos and 41 Mecca bingo clubs in the UK, according to its 2025 annual report.
A proposal from the Social Market Foundation to double the duty to 40% has prompted warnings from Rank that a third of its casinos could close. CEO Richard Harris called such a move "nonsensical", citing the likely combination of venue closures, job losses and reduced investment. Rank shares slipped from 100.6p to 76.5p over the month.
Rush Street Interactive, operator of BetRivers and RushBet, lost more than a fifth of its value despite having largely steered clear of the prediction markets sector, though it has applied for a designated contract market licence as a precaution. Analysts at Citizens said they could find no clear company-specific trigger for the fall, pointing instead to a modest seasonal slowdown in igaming performance in August and the ongoing pace of state-by-state legalisation.
DraftKings fell to a 52-week low, dipping below $19 during trading on 30 September, continuing a year-long slide tied to the growing presence of sports prediction markets. CEO Jason Robins told a Wells Fargo panel the stock would likely rebound if the US Supreme Court were to ban such products, even as DraftKings continues investing in its own DraftKings Predictions platform and DKeX exchange, built in part through last year's acquisition of Railbird.
MGM Resorts International shares swung sharply after People Inc, chaired by 84-year-old Barry Diller, withdrew its $18bn, $48.30-per-share bid for the casino operator more than four months after first submitting it. The news initially sent MGM stock up 15%, with Diller saying "we didn't feel the mix was coming together in the way we had hoped".
People Inc, which still holds a 27% stake in MGM, has not ruled out a future approach. Reports have since suggested MGM could instead consider bidding for People Inc. Speaking at G2E in Las Vegas this week, MGM chief executive Bill Hornbuckle said management were "trying to unlock the value of a company that we think is grossly undervalued" and would pursue whichever option best served shareholders.