The land-based casino industry is in a very unusual place. The new coronavirus has shut down all casinos in the United States and it’s unclear when these gambling venues will begin opening up again. Interestingly, we’re beginning to see casino stock prices jump.
There are several reasons why this is. Today, we’re going to look at the state of the US casino industry. We’ll also talk about why stock prices are beginning to increase.
Let’s get into it!
Casinos Around the United States Remain Closed
The US is known for having one of the largest and most successful casino industries in the world. A huge number of states around the country operate major casinos. Many of these gambling venues help to bring the state valuable revenue every single month.
Unfortunately, all casinos across the country are now shut down. As the coronavirus began to spread, most states started to close their casinos down. With cases now confirmed in every single state, the entire US land-based casino industry is now shut down.
This includes all the casinos in Las Vegas. This city, known as the gambling hub of the world, has seen all of its gambling venues close down. This is costing many major casino companies here millions of dollars every day.
No one knows when the country’s casinos will be able to open again. Health experts warn that this situation may play out for months. We’re seeing thousands of new cases of Covid-19 emerge every single day.
The recently-passed stimulus package is expected to help many US casino companies. Some are still worried about the future. This week, many of these companies saw their stock prices rise considerably.
Why Did Casino Stock Prices Recently Increase?
As you may already know, the stock market has been extremely volatile lately. We’ve seen almost all stock prices plummet over the past few weeks and this trend may continue for the foreseeable future. This week, however, we saw casino stock prices jump.
Perhaps most notably was Eldorado Resorts, whose stock rose by an incredible 26.4% at one point before closing at 19.5%. Caesars Entertainment also saw a quick jump of 17% before settling at 5.3%. Part of the reason for this jump is the impending merger between these two companies.
Back in June of 2019, these two companies officially agreed to merge. Eldorado paid billions to acquire Caesars and the companies have been working to gain approval from various state gambling commissions ever since. As of now, the deal is set to finalize in June of this year.
The aforementioned stimulus package may have also helped these stock prices increase, as well. Several companies have expressed relief that the federal government is offering emergency aid.
Penn National Gaming also saw a major stock price increase of 15.8% before it settled at 8.5%. This company recently sold a major property in Las Vegas which is expected to help the company over the next few months.
More and more US casino companies are now looking at Macau as the saving grace right now.
Macau May Prove to Be Extremely Valuable for US Casino Companies
Macau is another one of the world’s biggest gambling hubs. It’s a small Chinese territory that’s home to a huge number of multi-billion dollar casino resorts. Several of the biggest US casino companies operate casinos here including MGM Resorts, Wynn Resorts, and Las Vegas Sands.
For a time, all the gambling venues in Macau were closed to the public. That is no longer the case and this city is now extremely valuable for US casino companies. The casinos here may be the only ones able to bring these companies revenue.
This isn’t happening right away. Tourism into Macau is still extremely low. As a result, the casinos in this city are struggling hard to bring in money.
Hope is that this changes soon. If more visitors from mainland China begin flocking to Macau, this city can help to protect many of the biggest US casino companies. An increase in gambling revenue here may also lead to casino stock prices increasing massively once again.
Things continue to get stranger every single day. We’ll need to wait and see how US casino companies manage to deal with the new regulations over the next few months.
Stay tuned for updates on this situation!