The world’s casino industry is slowly beginning to get back on track. As you might expect, investors are starting to take notice. This week, casino stock prices began to surge and many are wondering why.
There’s one key reason for this jump. Fortunately, there’s still time for investors to profit. Let’s take a look at what’s going on here.
How is the US Casino Industry Faring Right Now?
The months between March and June were likely the worst in the history of the US casino industry. It was the first time that all of the country’s casinos were forced to completely shut down. Obviously, casino companies around the country earned almost no revenue during this time.
As time went on, state officials realized something needed to change. Many parts of the country rely on their gambling industries to bring in tourists. That’s especially true in Nevada, the largest gambling destination in the world.
Governor Steve Sisolak gave Nevada’s casinos the green light to begin operating again on June 4th. Today, nearly all of the casinos on the Las Vegas Strip are now operating again. Tourism rates are still down here, though. This probably won’t change until the casinos are able to operate without major restrictions set in place.
New Jersey took a little longer to get back on track. Governor Murphy announced that casinos in Atlantic City would open back up over the Fourth of July weekend. Opening day was a success, yet it will be a long time before gaming revenue gets back to the level it was last year.
Casino companies have begun operating again, but things are far from ideal. Many of these companies are now looking at their overseas properties as primary money-makers. To the surprise of many, casino stock prices began to surge this week.
Here’s Why Casino Stock Prices Jumped This Week
Many investors were excited to see the US casino industry get back on track. Unfortunately, rates of Covid-19 have continued to climb in the United States and many casinos may be forced to close down again soon. Perhaps that’s why so many were surprised to see the share prices for many casino companies go up recently.
There’s a key reason why this is.
The Chinese government has just announced that it plans to loosen travel restrictions on visitors from Macau. Previously, China has made it very difficult for mainlanders to make the trip to Macau and come back. This is huge news for the territory of Macau which, like Las Vegas, relies almost entirely on tourism and gambling revenue.
As many already know, many of the top US casino companies have casinos in Macau. Restrictions are significantly looser in this city. Now that travel restrictions are loosening up, revenue here is likely to increase significantly.
Casino companies are profiting off this news. This week, Wynn Resorts, Las Vegas Sands, and MGM Resorts International all saw their share prices increase. It’s great news for all three of these companies, each of which has property in Macau.
If tourism rates begin to truly surge, we may see casino stock prices rise even more. Investors are certainly taking a good look at this situation. Stay tuned for updates over the next few months!
Eldorado-Caesars Merger is Nearly Complete!
As we’ve already mentioned, this has been an extremely tough past few months for casino companies in the US. While everything has been going on, Eldorado Resorts and Caesars Entertainment have been working to complete their merger. In case you’re unaware, Eldorado paid an astounding $17.3 to acquire Caesars in June of last year.
This is the largest merger ever made between two casino companies. Before it can be complete, though, both companies need approval from various groups. That includes state gambling commissions around the country. They also needed the green light from the FTC.
It appears this deal is finally about to wrap up. Eldorado and Caesars have received approval from many different gambling commissions already. Recently, the FTC approved the merger. These companies are now meeting with members of the last state gambling commissions to receive final approval.
The Indiana Gaming Commission is requiring that Ceasars sell three of its properties before the deal can be complete. Under normal circumstances, that wouldn’t be too difficult for the company. Some feel it could take time to find a buyer for these venues right now, though.
Casino stock prices are always going up and down. We’re likely to see this trend continue over the next few months. Hopefully, the US casino market improves and casino companies here are able to earn enough revenue to function normally.
Do you plan on investing in any US casino companies? Tell us which ones in the comments section below!