After months of being shut down, the US casino industry is slowly coming back to life. Several of the biggest casino-resorts in the country are scheduled to reopen this week. Some now feel that this is the perfect time to invest in casino companies.
Stock prices have been fluctuating greatly over the past couple of months. There now seems to be a real investment opportunity in the gambling industry. Today, we’re going to look at what analysts predict to happen over the next few weeks.
Las Vegas Casino Industry is About to Reopen
The US has the biggest and most successful casino industry in the world. Many states around the country allow casino gambling. Some have legalized commercial casino gambling while others only permit Native American-run gaming venues to operate.
In March, however, this industry completely shut down. Every state ordered their casinos to close to the public. Health experts warned that these casinos were easy places for the new coronavirus to quickly spread.
These regulations hurt some parts of the country more than others. Perhaps no city took quite as big of an economic hit as Las Vegas. Closing the casinos here resulted in hundreds of thousands of job losses and an unprecedented amount of lost revenue.
Some of the biggest casino companies in the world are based in Las Vegas. All of them have seen their share prices plummet over the past three months. Fortunately, many of the casinos in this city are being allowed to reopen to the public on June 4th.
As a result, some of these company’s stocks are beginning to surge. Some analysts believe Las Vegas will see a massive influx in gamblers looking for an escape from the restrictions in their own states. Some now believe this is the perfect time to invest in casino companies here.
Here’s Why Some Analysts Are Recommending You Invest in Casino Companies
It might seem crazy to think about investing in the land-based gaming industry right now. Even in states that have reopened casinos, the revenue being earned is a fraction of what was coming in a few months ago. There’s no denying the fact that casino stock prices are surging right now, though.
Caesars Entertainment, MGM Resorts International, and Wynn Resorts have seen their share prices surge by more than 140% since March 18th. Penn National Gaming has risen by an astounding 780% from its lowest point in March. Ari Wald, the head of technical analysis at Oppenheimer, spoke with CNBC about the future of these stocks earlier this week.
“Typically at market turning points you’re going to see investors embrace the most beaten-up laggards. For the S&P casinos industry, we are seeing that stability over the last eight weeks. I think you test the underside of that 200-day,” he said. “It’s really just a beta trade. Yes, they overshot to the downside, getting some relief to the upside, but there’s some longer-term concerns. We think instead the premium is going to be on high-growth companies in this low-yielding recovery.”
Many feel that Macau will help to significantly raise these company’s stock prices. China has been quick to recover economically when compared to other countries. Chinese nationals are likely to begin gambling in Macau, where a number of major US-owned casino-resorts are located.
The opening of Las Vegas casinos will help things, as well. The real question is now about how many tourists will begin flocking to this city. We’ll get a much better idea over the next seven days when the casinos here open back up.
Sports Betting Continues to Grow More Popular
Since May of 2018, every state in the country has been given permission to set their own laws on sports gambling. As of today, more than 20 states have now legalized this form of gambling. It’s proven to be incredibly popular.
Prior to the global pandemic, sports betting was growing every single month. The shutdown of major sports leagues brought a stop to this. As more leagues begin to resume their operations, much of this revenue has begun to flow back in.
Interestingly, more states are becoming interested in legalizing sports betting. That includes California, which feels legalizing this industry will help the state recover economically. Lawmakers are now discussing the matter with Native American tribes in the state that want to ensure they receive revenue from the legal sports betting options in the state.
Sports betting has never been more popular than it is right now. This is another reason why so many are advising to invest in casino companies right now. Expect more of these casino companies to focus on their sports gambling options.
This is a pivotal time for the US gambling industry. We may be in for some major changes over the next few weeks.
Stay tuned for more casino news!