Flutter, IGT ‘Best in Class’ Gaming Stocks Amid Tariff Unrest

Posted on: April 8, 2025, 01:31h. 

Last updated on: April 8, 2025, 01:41h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Flutter, IGT could be resilient if a recession materializes, says Stifel.
  • Duo could outperform other gaming stocks as tariff uncertainty lingers.

Gaming stocks have been walloped by the US applying tariffs to various trading partners — a move that’s heightened the risks the world’s largest economy will enter a recession. Economic contraction would be a drag on gaming equities, but some could prove resilient on a relative basis.

Flutter FOX Bet
The Flutter logo as seen in an investor deck. It’s one of the gaming stocks that could prove resilient in a recession. (Image: Flutter Entertainment)

In a new report, Stifel analyst Steven Wieczynski highlighted Flutter Entertainment (NYSE: FLUT) and International Game Technology (NYSE: IGT) as two of the wagering-related stocks that could outperform peers if a recession sets in. He acknowledges that the research firm’s gaming and leisure coverage universe is likely to remain out of favor with investors for the remainder of this year as tariff effects take hold, but adds FanDuel parent Flutter and IGT could hold up well “even if the current environment stays the same or even worsens.”

We believe FLUT’s market-leading recreational product, global technology strategy, and first-mover advantage creates a powerful moat with market share expansion resulting from structural margin advantage (higher parlay mix) & global secular shift towards more recreational players,” wrote Wieczynski.

The analyst added that while the iGaming and online sports betting industries aren’t immune from consumer spending retrenchment, those groups could show some sturdiness in a recession as consumers look for cost-effective alternatives to travel.

Other Possible Tariff Benefits for Flutter

In the current environment, Flutter’s asset-lite model could prove alluring for investors. The gaming company doesn’t operate any brick-and-mortar casinos, which could prove to be a positive at a time when tariffs are damping visits to the Las Vegas Strip by Canadian and Mexican tourists, among others.

There’s also the currency conversion dynamic, which could be a tailwind for Flutter’s bottom line. Tariffs could weaken the US dollar, providing a “translation tailwind for FLUT,” adds Wieczynski. The gaming stock could also be supported by operators’ user bases becoming increasingly recreational, implying average bet sizes are small, meaning those bettors won’t need to materially cut back in a recession.

The analyst also noted Flutter shares could be lifted by catalysts including consensus upgrades, potential inclusion in the S&P 500, and total addressable market (TAM) expansion.

“Consensus appears reasonable approaching initial FY25E guidance, though we see upside to FY26/27E supported by TAM momentum, regulation-driven consolidation, bottoming headwinds, and top-line synergies,” he observed.

Wieczynski also pointed out that investors could be comfortable owning either DraftKings (NASDAQ: DKNG) or Flutter at the moment, but Stifel’s preference is for higher-quality gaming stocks, which prompted the firm’s highlighting of the FanDuel parent.

IGT Could Be Sturdy Gaming Stock, Too

For different reasons, IGT could be a solid gaming stock on a relative basis. Its tariff exposure is declining because it’s in the process of selling its slot machine business to Apollo Global Management (NYSE: APO). Divesting that unit could also provide IGT with a buffer should casino operators reduce slot purchases during a recession.

When that transaction wraps up, IGT will become a pure-play lottery provider. Wieczynski points out that some of the recent weakness in the stock is attributable to uncertainty surrounding the Italian lottery contract, but he said IGT is likely to retain that business.

Another plus to the “lottery only” label for IGT is that on a peak-to-trough basis, US lottery sales declined by just 0.4% during the global financial crisis, indicating consumers will still buy lottery tickets amid harsh macroeconomic conditions.