Many who have invested in casino stocks across the globe have had a disappointing year in 2018. Though initially the year started out promising, the outlook plummeted as the weeks rolled by. This has left many wondering if they should continue investing in the industry, with three questions coming to mind - what has caused the decline? Is there another market behind the failure? And how can you be sure where the best options are to invest?
What has caused the decline?
Most people believe the poor performance of casino stocks in 2018 is due to many factors. One of the main ones is the fact that Las Vegas casinos aren’t bringing in as many visitors as they once did. With the rise of online casinos, many people much prefer to stay at home and gamble instead of travelling to a physical casino. There are increases in costs for casino gambling in person as opposed to online casino gambling, and even small costs like parking charges can add up over the course of a 3 or 4 day stay in Vegas.
Compared to years where big players were in areas such as Vegas, causing a flurry of people to place their bets in the hope of big wins, there have not been as many big events in 2018 to boost numbers.
Many people will not want to travel as far as Vegas for the casino experience, and although casinos in regional areas across many states are available for players, the best option for gambling is Vegas, due to the state laws on gambling. But it can take a while to get the cost together to travel to Nevada, while with an online casino it could only take a small deposit to get you going.
Additionally, gaming revenue has stagnated in China, and people really started feeling the hit over the summer period. Those clued up on the gambling industry will know that Macau is the biggest casino gambling hub in the world, but despite targets of 18% revenue which investors expected to see in June, there was only 12.5% revenue instead.
As far as shares in the casino stock market in Vegas go, Las Vegas Sands and MGM Resorts International have dropped a whopping 6.67% and 3%. The main reason for this is that these markets receive over half of their revenue from Macau. The moment Macau doesn’t perform at the standard expected, shareholders will take a hit too.
But what is it about Macau that is making casino gambling less appealing there? One possible reason is the increase in construction work in this area, which has led to tourists being less inclined to visit. Although it’s nearly complete, the toll it has taken on 2018’s revenue means it seems unlikely to recover for 2019. However, there is a possibility that things will improve once the New Year is upon us.
Is there another market behind the failure?
When people consider physical versus online gambling these days, many will opt to stay in the comfort of their own home, preferring to allocate their hard earned money on online wallets instead of spending additional funds on travel, transportation and living costs such as food whilst visiting a physical casino.
It’s true that the growing world of online casino sites is proving very lucrative for those involved. What’s more, it’s certainly appealing for customers, as many online casino sites will offer considerably more benefits than their land-based predecessors. Examples include great welcome and no deposit bonuses, a huge variety of games and slots to choose from, VIP clubs, mobile gaming options and round-the-clock customer support.
How can you be sure where the best options are to invest?
Some experts have warned that investors looking into the gambling industry may want to hold off on investing in physical casinos until they can be sure the slump is over. Meanwhile, the world of online casinos is getting increasingly more promising, with players flocking to sites in their millions. But with so many new sites out there, how can you be sure which ones hold the most promise for you as an investor?
This is where casino review sites come in. Using sites such as Casinopedia can make the experience of finding the most lucrative investment options for online casinos much easier, as there will be an extensive list of the best online casinos out there, including information about how they compare to other sites, pros and cons of the site, any special or unique features the company offers, a rating from the review site owners, and further details on important factors such as site encryption, customer support and payment providers. All of this information can help an investor to decide which site is going to stand the test of time, be unique in a sea of other casino sites and clarify whether a site is reputable and trustworthy.
What’s more, review sites will also include a dictionary of jargon-busting terms, so that investors new to the world of casinos can get clued up on the industry in their own time before making a decision.
The rise of online casinos means that the physical ones have much more competition now. Only time will tell whether they can make up their losses in 2019 and be viable competitors for the digital market.
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