Is this the Right Time to Buy Casino Stock?

The coronavirus continues to take a major toll on the gambling industry. Casinos across the United States are being forced to close down. Interestingly, some now believe that this is the perfect time to buy casino stock.

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Not everyone is interested in investing their money right now. For many, the coronavirus is already taking a major financial toll. Today, we’re going to look at how this virus is affecting casino workers, and discussing why some feel it’s the right time to put money back into this industry.

Let’s get into it!

Casinos Around the US Have Closed

As you probably know, the new coronavirus called Covid-19 has now spread around the entire country. In just a few weeks, it’s known to have infected more than 11,000 individuals. Due to the lack of mass testing available, it’s possible that many more actually have the virus.

Every state is taking its own approach to this virus. Some, like Florida, are taking a relaxed approach, allowing beaches to remain open. Many have condemned lawmakers in the state for not doing enough to stop the spread.

Other states are taking some extreme measures. In the San Francisco Bay Area, thousands of individuals are now legally required to self-quarantine at home. Nevada has officially called for all casinos and restaurants to close to the public.

In fact, many states are now forcing their casinos to shut down. This is proving to be devastating for a huge number of employees. The casino companies themselves are also losing millions of dollars every day due to these new regulations.

Unfortunately, it’s unclear when exactly things may begin to improve. Estimates vary, yet most agree that things will get considerably worse before they get better.

Some Believe Now is the Time to Buy Casino Stock

The US stock market has dropped faster than ever before. Many government officials believe we are now heading into a global recession. Some financial institutions actually claim this is a good time to begin investing money back into the stock market.

As we just mentioned, many casino companies are experiencing incredible drops in their stock prices. For this reason, certain individuals are encouraging people to buy casino stock. Shaun Kelley, a financial analyst, says he’s making this decision based on updated 2021 recession-level earnings outlooks.

“That said, our stocks are already pricing in significant liquidity concerns and we have long been aware of the financial/operational leverage in these companies,” Kelley said. 

Many casino companies with ties to Macau present good investment opportunities, he says. Not everyone agrees, though. Some feel that based on the way things are going, it’s best to avoid making any major investments.

Casino Companies Are Now Asking for Help From Congress

Despite some analyst’s calls to buy casino stock, things are still looking very grim for many of these companies. MGM Resorts International, Wynn Resorts, and Las Vegas Sands have all been forced to close down the majority of their gambling venues. Some are now asking for financial relief from Congress.

Earlier this week, several casino companies officially began requesting emergency aid. The American Gaming Association claims this situation is pushing many companies to the brink of collapse.

The AGA also points out how many individuals are at risk of losing their jobs. As more regulations are made across the country, more jobs inside casinos are likely to be lost.

It’s unclear what steps Congress will take to help these companies. Unless the situation improves quickly, however, it’s almost inevitable that some of these companies will fail.

Some feel this is the right time to buy casino stock. Make sure to stay tuned for updates on this situation over the next few months!

Las Vegas Casinos Warn Investors of Possible Impact from Coronavirus

Stock Market Shares Figures ListThe newly identified coronavirus SARS-CoV-2 was first identified and widely spread within China but has since made a global reach. According to the Johns Hopkins virus dashboard, 87,442 cases of the virus worldwide have been recognized.

With the virus spreading rapidly, Las Vegas casino operators have been feeling the sting in the stock market.

Amid the global outbreak concerns, stock prices have been on a steep decline. Shares at Las Vegas mega-properties have been affected.

MGM Resorts International shares have dropped a whopping 21.5 percent. Red Rock Resorts shares have dropped 17.5 percent. Wynn Resorts Ltd. shares have fallen 14.7 percent. Boyd Gaming Corp.’s shares have fallen 13.5 percent. Las Vegas Sands Corp. shares fell 11.9 percent. And lastly, Caesars Entertainment Corp. dropped 7.8 percent.

Within the same time frame, the Dow Jones Industrial Average also fell 12 percent.

On Jan. 30, the World Health Organization officially classified the coronavirus as a public health emergency on the international level. Health and Human Services Secretary, Alex M. Azar II, declared the outbreak a public health emergency for the United States, which would enable support for the healthcare community’s response.

“While this virus poses a serious public health threat, the risk to the American public remains low at this time, and we are working to keep this risk low,” Azar said. “We are committed to protecting the health and safety of all Americans, and this public health emergency declaration is the latest in the series of steps the Trump Administration has taken to protect our country.”

 

How Deep Will the Coronavirus Crisis Impact Gaming Circles?

According to Macquarie analyst, Chad Beynon, it’s difficult to gauge the depth of the potential impact because the depth of the crisis is still developing.

“The market, in our view, has moved from underappreciating the risk to potentially over-penalizing the stocks,” Beynon said.

As the situation continues to develop, casino operators are saying they will continue to monitor it closely, and have warned investors of the potentially adverse effect it could have on gaming operations.

In an annual report Wynn Resorts filed on Friday, they gave this statement regarding the outbreak that other casino operators are echoing:

The coronavirus outbreak “has had and will have an adverse effect on our results of operations.”

Wynn Resorts Shutdown in Macau

Of the Las Vegas casino operators, Wynn Resorts, who has three properties in Macau, China, has been hit the worst so far. The outbreak forced Chinese Officials to shut down Wynn Macau, Encore at Wynn Macau, and Wynn Palace for 15 days to reduce the risk of infection.

The shutdown caused the company to lose nearly $2.6 million in revenue a day, with the majority of the revenue loss generated from payroll costs.

The casinos were given the green light to reopen last week.

It’s unclear how far-reaching the outbreak will be and whether there’s an end date in near sight. Until then, Las Vegas casino operators will have to keep a close eye on developments alongside the rest of the world.

Is This the Right Time to Buy LV Casino Stock?

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.Stock Prices Picture

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!