Skillz, Sea Limited Continue Winning Streak While Gambling.com & Rank Group Tank

The S&P 500 hit yet another record high last week, even as markets came off their highs on Friday amid concerns over tariffs fueling inflation after July wholesale inflation rose at the highest pace in three years. Moreover, the University of Michigan’s consumer sentiment index fell to 58.6 in August compared to 61.7 in July.

Meanwhile, the Roundhill Sports Betting & iGaming ETF (NYSE: BETZ) outperformed the S&P 500 Index last week. Sea Group and Skillz were among the major gainers last week. Meanwhile, Gambling.com and Rank Group underperformed.

Top Gaming Stock Gainers

Sea Limited (NYSE: SE): +20.1%

Tech conglomerate Sea Limited, parent of gaming studio Garena, rose over 20% last week and was the best performer in our coverage of gaming stocks. Last week’s gains were directly attributable to the company’s Q2 financial report that sent its stock 20% higher on Tuesday.

The company’s overall revenues rose 38% year-over-year, with Garena bookings rising by 23%. The segment’s strong first-half performance prompted Sea Limited to raise Garena’s annual booking guidance to 30%.

Commenting on Garena, Sea Limited’s CEO Forrest Li said: “We believe Free Fire has established itself as an evergreen franchise, both sustaining its user engagement and growing its appeal in more markets globally. We are also committed to trying out new genres and new markets, and testing the boundaries of future game experiences by embracing AI.”

Star Entertainment (ASX: SGR): +19.5%

Star Entertainment Group was the second-best performer, gaining 19.5% last week. The rise was directly linked to the revival of its plan to sell its 50% stake in its Queen’s Wharf Brisbane casino to Hong Kong-based partners Chow Tai Fook Enterprises and Far East Consortium. Notably, the stock had crashed earlier this month after the talks collapsed.

The deal, if it were to go through, would be nothing short of a lifeline for Star Entertainment and help the debt-laden company improve its financial position.

Skillz (NYSE: SKLZ): +17.0%

Skillz rose almost 17% last week and built on the 13.6% gains from the preceding week. The stock, which is a lot more volatile than its peers and often finds its way into the week’s biggest gainers or losers, is now up almost 77% for the year.

Skillz was part of the 2021 meme stock mania and has participated in the recent meme stock frenzy.

While Skillz faces significant headwinds, its Q2 earnings that were released on August 7 show some improvement in financial performance. The company’s paying active users grew 20% to 146,000. That marks a welcome break as the user numbers have been falling over the previous few quarters. It, however, still posted a net loss of $8.9 million in the quarter.

Light & Wonder (NYSE: LNW): +11.9%

Light & Wonder, which fell 16.7% in the preceding week after reporting mixed Q2 earnings, gained 11.9% last week to turn positive for the year. After the earnings report, JPMorgan downgraded LNW stock by one notch to neutral while slashing the target price from $108 to $95 as the brokerage is wary of Light & Wonder’s ability to grow its earnings organically.

Last week’s rise appears to be partially due to the overreaction to the company’s earnings from the previous week.

Top Gaming Stock Losers

Gambling.com Group (NYSE: GAMB): -13.5%

Gambling.com was the biggest loser among our coverage of gaming stocks last week. The company released its Q2 earnings last week, reporting revenues of $39.6 million, 30% higher year-over-year and slightly ahead of the $38.9 million that analysts had modeled.

GAMB posted an adjusted EPS of $0.37 – over twice the $0.17 that analysts were expecting. It, however, posted a GAAP loss of $13.4 million on $21.2 million change in the fair value of contingent consideration for the company’s acquisition of OpticOdds and OddsJam.

Inorganic growth through acquisitions has been a key pillar of Gambling.com’s business strategy, and in its Q2 release, it announced a definitive agreement to acquire Spotlight.Vegas – a transaction it expects to be earnings accretive in the full year 2026.

GAMB meanwhile slashed its 2025 adjusted EBITDA guidance to between $62 million to $64 million, versus the previous guidance of $67 million to $69 million. The company also talked about “weaker search engine rankings following Google’s core algorithm update” in its release, which further dampened sentiments.

After the earnings, Jefferies, Stifel, and BTIG lowered GAMB’s target price, while Truist downgraded it from a buy to hold, slashing its price target from $17 to $11.

Rank Group Plc (LSE: RNK): -6.4%

Rank Group Plc was among the other major losers last week, falling 6.4%. The company released its preliminary results for the full year ended June 30, reporting a like-for-like net gaming revenue (NGR) of £795.3 million, 11% higher than the corresponding period last year and ahead of consensus estimates.

The company’s underlying EPS rose 54% to 9.1p, which was also ahead of estimates. The management sounded upbeat on the current fiscal year and said that its NGR rose by 9% in the first six weeks.

Despite last week’s drawdown, RNK is up an impressive 60.7% for the year. Last week’s fall looks partially on account of lofty investor expectations after the stellar YTD rally, which usually turns even an otherwise positive earnings report into a “sell the news” event.

Moreover, gambling stocks with a significant presence in the UK were under pressure last week on reports of a gambling tax hike in the upcoming Autumn Budget.

Entain Plc (LSE: ENT): -5.5%

Pretty much the same factors were at play with Entain, which fell 5.5% last week despite posting better-than-expected numbers. Markets are concerned about the outlook for gambling stocks that count the UK as a major market in light of the expected tax hike. While some groups have supported the tax hike, calling it necessary to garner resources to address rising child poverty in the country, others see the move as counterproductive, which will only push more people into the unregulated markets.

Evolution AB (STO: EVO): -6.4%

Evolution AB fell 6.4% last week in response to a Bloomberg report that said the company’s current and former executives were in the know about its casino games being operated in US-sanctioned markets.

The report, based on documents submitted to a New Jersey court, revealed that a private intelligence firm, Black Cube, had secretly recorded current and former Evolution executives discussing how the company’s games reached banned markets, including Iran, Sudan, and China.

Other Major Gaming Industry Developments

Electronic Arts (NYSE: EA) stock rose by over 5% on Monday and hit an all-time high after the successful beta launch of its upcoming game, Battlefield 6.

Separately, ESPN Bet raised its minimum bet in Illinois from 10 cents to $1 in response to the additional tax levied on all bets placed in the state. The company joined ranks with peers who have either increased the minimum stake or added a betting surcharge for users in the state.