For months, some of the biggest casino companies in Las Vegas have seen their share prices decline due to the coronavirus in China. All casinos have been forced to close down, costing many companies millions of dollars. Things seem to be improving now, and many are wondering if this is the right time to buy LV casino stock.
It’s an interesting time for the global casino market. Things are going well in Las Vegas, yet Macau continues to lose revenue. Today, we’re going to talk about why many feel this is the perfect time to purchase stock in several Las Vegas casino companies.
Let’s get into it!
Macau Proves to be a Troublesome Casino Market
Most of the world’s top casino operators currently have operations in Macau. For many years, this small Chinese territory was the most profitable gambling market in the world. It drew in millions of gamblers from around the world every single year and was home to a number of multi-billion dollar gambling venues.
Last year, things began to slow down here. The US-Chinese trade war had a serious impact on this territory. As China’s economy slowed down, fewer tourists from mainland China began traveling and gambling in Macau. This resulted in fewer junkets operating here and as time went on, revenue in Macau began to plummet.
This didn’t deter Las Vegas casino companies, though. Many of them continued to invest in properties here. As revenue continued to drop, however, LV casino stock prices dropped.
In December, the Wuhan coronavirus began to spread throughout China. By February, this virus infected tens of thousands of people around the country. Not long ago, officials in Macau chose to close down all casinos as a way to deter tourism. This is costing several Las Vegas casino operators millions of dollars every day.
Fortunately, there seems to be a light at the end of the tunnel. The virus infection rate seems to be slowing down. This could be huge for casino operations in Macau.
Bank of America Recommends Buying LV Casino Stock
Macau has always been a hot casino market. Some of the world’s biggest high-rollers gamble here and many casino companies earn the majority of revenue in this small territory. As the coronavirus begins to be eradicated, this market will start to improve.
This week, Bank of America began recommending to buy LV casino stock. The major US banking company believes that as the virus begins to level out, revenue in Macau will start to surge. As a result, Las Vegas casino companies with property here will see their share prices increase.
Shaun Kelley, a research analyst at Bank of America, commented on the potential share price increase to CNBC this week.
“2nd derivative [is] leveling out,”, he said. “The sequential and daily growth rates have been stable/declining for approximately a week. “Stock and investor reaction has been surprisingly muted relative to prior Macau corrections which we think owes to the passing nature of the threat and increasing China/global market liquidity.”
This certainly makes sense. Due to Macau’s new regulations, several major Las Vegas casino companies have seen their share prices drop dramatically.
There might be a real opportunity to make some money. If China’s economy begins to improve again and Macau stops its hardcore casino regulations, revenue will start to surge.
Las Vegas Casino Market Continues to Improve
Las Vegas’ gambling revenue is always fluctuating. For more than a year, however, things have been steadily improving in this city. Casinos are continuing to rack in money and are showing no signs of slowing down.
Even sports betting revenue is increasing here. This is a surprise for some. More states around the country are beginning to legalize this form of gambling.
In fact, more than 20 states have officially legalized sports betting. It seemed that this would decrease the sports gambling revenue in Las Vegas. This is not the case.
Everything is running smoothly here. Casinos here took in an average of $1 billion per month last year. Sports betting revenue increased by 9.5% overall.
Amazingly, LV casino stock has been dropping lately due to the trouble in Macau. Hopefully, this will begin to improve.
Stay tuned for more Las Vegas casino news over the next few months!