Shares of The Stars Group, William Hill Crushed in 2018

Published on January 2nd, 2019 5:50 pm EST

These should be great times for the online gaming industry.

The United States gaming market, which is undoubtedly the most lucrative in the world, is finally starting to open its doors.

The online gaming market in general is predicted to post strong growth over the coming years.

Online casino offerings continue to grow in popularity and become more mainstream.

With that being said - why did online gaming stocks post such a weak year in 2018, and what can be done to revive the industry going forward?

Three things conspired to slow online gaming stocks in 2018 - a lack of consolidation, growing competition in new markets (United States) and a general decline in markets.

When markets start to decline, investors tend to dump stocks that have a great deal of debt, and you can certainly include companies like Pokerstars in that category.

So - what could re-energize the online gaming sector in 2019? Here are three possibilities:

1) A big acquisition. Many big companies have been pairing off in recent years - Paddy Power/Betfair, Pokerstars/Sky Betting and Gaming, GVC Holdings/partypoker, just to name a few. If there is another big acquisition in the space (such as William Hill finally being acquired), the industry might enjoy an uptick.

2) The passing of a federal sports betting bill in the United States. Can a federal bill that offers a regulatory framework for the online sports betting industry in the United States be passed? There seems to be a bi-partisan effort to pass such a bill, though these things can always get tied up or forgotten about.

3) A strong equities market. If the stock market performs well, investors will likely take another look at the online gaming stocks that were savaged in 2018.

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It seems hard to imagine that the online gaming sector won't rebound at least somewhat after such a bloodbath in 2018.