• Sports betting has taken the US by storm after its legalization in 2018.
• Across Wall Street, investors are seeing massive growth potential for the industry.
• These 6 gambling stocks could be set to take off as sports betting increases in popularity.

America might have a new favorite pastime: gambling.

Sports betting has exploded in popularity in recent years. This Super Bowl Sunday, Americans are expected to wager a collective $1.39 billion in legal betting markets, according to the American Gaming Association.

As consumers open their wallets to place wagers, Wall Street is pouring money into the companies behind the sports betting craze.

That’s largely thanks to a friendlier legal environment, according to Dan Ahrens, the chief operating officer and portfolio manager at AdvisorShares who oversees the “sin stock” AdvisorShares Vice ETF (VICE). The Supreme Court gave states the right to regulate sports betting in 2018. Since then, 38 states and the District of Columbia have legalized the activity.

According to PGIM, the sports betting market is on track to double in size from $80 billion in 2022 to $160 billion in 2030 — and much of that expansion will be led by the early-phase US market. Morgan Stanley sees the sports betting industry in its early stages, with growth driven by a user base expanding beyond its core of young, high-income males to include older and female bettors.

Bettors aren’t just wagering on the final results of the game, either. Microbetting — or placing small bets on specific moments of the game — has become popular and is a promising driver of future growth, according to Rene Reyna, Invesco’s head of thematic & specialty ETF strategy. People can bet on anything from the success of a field goal to whether Taylor Swift will make an appearance.

Additionally, sports betting companies are poised to become beneficiaries of AI, Reyna told BI. Many of these companies are using AI to enhance predictive accuracy, personalize user experiences, and create operational efficiencies — leading to growing earnings.

Listed below are 6 stocks that some analysts, strategists, and money managers expect will win big as sports betting continues to spread across America. Stocks on the list either have overweight ratings at Wall Street banks or were mentioned in interviews with BI.