Gambling stocks like Penn are tanking. Deutsche Bank says these are the names to buy in the sell-off

Pedestrians pass in front of Caesars Palace hotel and casino in Las Vegas, Nevada, U.S., on Sunday, May 02, 2021.
Roger Kisby | Bloomberg | Getty Images

Sports betting and casino stocks fell sharply on Thursday, continuing a recent stretch of weakness in the space, but there are two names that stand out as attractive plays for investors, according to Deutsche Bank.

Thursday's losses were led by Penn National Gaming and DraftKings, with drops of roughly 10% and 8%, respectively. Penn reported its first-quarter results before the bell and beat expectations for a key profit metric and revenue.

However, Deutsche Bank analyst Carlo Santarelli said in a note that the results still can't justify the company's valuation and reiterated the firm's sell rating.