LIVE MARKETS-European gaming stocks: an area of opportunity

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EUROPEAN GAMING STOCKS: AN AREA OF OPPORTUNITY

Jefferies equity analysts believe there are several areas of opportunity for Europe's gaming sector in 2026, not least the growing popularity of peer-to-peer prediction markets.

Websites such as Kalshi and Polymarket allow users to bet on a multitude of events, from sports events, to who Trump is likely to nominate as the next Fed chair.

And even though there is a risk that these prediction markets take market share away from the traditional players, Jefferies says there is no "meaningful cannibalisation impact" on volumes.

"Relative to OSB (online sports betting), we see prediction markets as offering weaker product, pricing and generosity, while also appealing to a different customer mix," Jefferies says.

"As a result, prediction markets have made little dent in OSB regulated states and activity remains skewed to unregulated states."

Instead, Jefferies sees an opportunity for gaming stocks in unregulated states. Flutter Entertainment has already launched its FanDuel Predicts app in five states where online sports betting is unregulated.

"Prediction markets in the U.S. exploit a legal loophole to add an incremental profit opportunity and potential online sports betting legislation accelerator," Jefferies says.

Flutter FLTRF.L remains Jefferies' top pick in the gaming sector, given its online global market leadership. Lottomatica LTMC.MI and newly-listed Cirsa CIRSA.MC are also top picks.

(Samuel Indyk)

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