There are a wealth of companies to choose from when you’re looking for the best sports betting stocks.

Sports betting stocks have been one of the more compelling investment options for investors since 2018. The U.S. Supreme Court green-lit sports betting; since then, multiple states have legalized the sector.

Around 30 states have legalized sports betting, including top markets such as New York and New Jersey. Moreover, Data Bridge Market Research concluded that the worldwide sports betting market could grow at an incredible 10.26% through 2029.

As part of the broad market sell-off, many of the best sports betting stocks are trading at multi-year lows. Hence, it’s probably the best time to take the initiative and pounce on sports betting stocks.

Moreover, sports betting stocks recently ended the four-month streak in the red in July and seem to be back on investor radars again. Here are three that have the most upside potential.

DraftKings (DKNG)

DraftKings (NASDAQ:DKNG) operates as a leading online sportsbook in the U.S., accounting for close to 36% of the population.

Moreover, on average, it’s been a hyper-growth business, posting revenues exceeding the 50% mark over the next five years. With the recessionary effects in play and the growing competition, growth rates have normalized, but its long-term case remains firmly in place.

It recently reported strong second-quarter results, where sales increased by 57% to $466 million. Customer engagement remained excellent, and there seems to be little impact on its top line from broader economic pressures. Moreover, its management raised its full-year guidance for revenues amidst a strong second quarter showing.

CEO Jason Robins feels that the current downturn hasn’t impacted consumer spending on the platform. Moreover, he states that the firm remains well capitalized and can enter new markets and win over customers.

Additionally, DKNG’s payback period of just three years when entering a new market is a telling stat, which makes it a mighty attractive play at current prices.

Penn National Gaming (PENN)

Penn National Gaming (NASDAQ:PENN) is one of the most profitable online sports betting companies operating in 20 different states.

Moreover, it has over 15% market share among retail sportsbooks. According to its management, the firm has one of the most attractive portfolios of regional gaming assets generating healthy free cash flows. Its impressive online and offline presence makes it one of the least risky investment options in the market.

Penn has been one of the most profitable enterprises in the sector. Its impeccable margin profile shows that its profit-first approach has been incredibly successful in moving the needle for its business. Its EBITDA and gross margins have grown by 23.5% and 45.8%, respectively, over the past five years.

Furthermore, Penn has been consistently working on expanding its digital presence. It acquired sports media companies such as Score Media and Gaming Inc. and Barstool Sports to leverage their massive user bases.

The firm has set a future roadmap for expansion for its online business, which should help drive margin growth and reduce costs over the long term. Additionally, its 44 properties in 10 states will give it the balance it needs for further expansion.

FuboTV (FUBO)

FuboTV (NYSE:FUBO) is a sports-first streaming platform that has consistently performed over the past several years.

It has the first-mover’s advantage in sports-first streaming, a niche poised for massive expansion.

Though its streaming business is doing remarkably well, it remains a low-margin endeavor which is why it’s branching out to other profitable verticals. Perhaps the most promising of these verticals is its sportsbook.

Fubo sportsbook is the only app in the U.S. that syncs live sports with wagering on a single platform. It recently shared data that showed that subscribers who are also sportsbook players are likely to place more bets than sportsbook-only players.

FuboTV has proved its ability to acquire customers at considerably lower costs than its competition. Moreover, its subscriber base gives it the edge in controlling costs and could accelerate the path towards profitability.

The second quarter results show that the business is still performing exceedingly well. Its revenues were up 70% from the prior-year period to $222 million.

After the quarter, it had close to 1.3 million subscribers across the globe, up 57% from the prior-year period. Hence, with FUBO stock trading at such a beaten-down valuation, it’s an ideal time to scoop it up.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.