Nearly Empty Casino Lounge in Las Vegas

As the coronavirus continues to wreak havoc in the markets, many wonder if there are some bright spots for investors to be found, particularly for those companies whose main sources of revenue are online? The travel and tourism industry has taken an immediate and direct hit and one of the industry’s strongest sectors, casino gambling has been hit hard in particular. For instance, Macau suffered an 88% plunge in revenues in February as a result of the coronavirus and a two-week government imposed lock-down. Although China has since rescinded the shut-down, international travel is quickly grinding to a halt.

In Las Vegas casino operators are closely monitoring the spread of the virus.This week, as a precautionary measure, some large casino operators such as MGM (MGM) and Wynn Resorts (WYNN) have closed their meal buffets which are a longstanding attraction for visitors to Las Vegas. The city’s workforce is on edge as many fear job losses and closures as a result of the impact of Covid-19 to the city’s convention and entertainment business. Casinos in new growth regions for casino gambling, such as Massachusetts, are already feeling hits to their revenues due to the novel coronavirus.

So just what does this mean for gambling related stocks and can online gaming revenues provide some proverbial light at the end of the tunnel? 

Yesterday, Wynn Resorts (WYNN) closed at $80.87 per share well under its 52 week high of $153.41, MGM (MGM) closed at $18.08 down from its high of $34.64 and Sheldon Adelson’s, Las Vegas Sands Corp. (LVS) closed at $48.63, well under its 52 week high of $74.29. That’s a lot of bloodletting for sure. One of the first tests for MGM will be its new BetMGM location at its Detroit MGM Grand property which is expected to provide online, mobile wagering and iGaming at a later date, subject to receipt of all necessary regulatory approvals. BetMGM Detroit launched operations yesterday, in what can only be described as uncanny timing.

How have online companies fared in comparison?

Playtech Plc (PYTCY) which develops unified software platforms and content for the online, mobile and land-based gaming industry closed at $9.48 down from its high of $12.48. 

NetEnt (NTNTY)a Sweden based company which provides digital distributed games and gaming systems to online casino operators worldwide closed at $4.5 down from its high of $7.5 (it should be noted that this stock is lightly traded). 

888 Holdings Plc (EIHDF) is a Gibraltar based company and one of the largest players in the online gaming space. It provides a range of virtual online gaming services over the Internet, including casino and games, poker, bingo, sport, and Mytopia social games to end users and business partners. Yesterday its stock closed at $1.25 down well under its 12 month high of $2.23.

GVC Holdings PLC (GMVHF) a provider of online betting, casino, poker, and bingo services in the UK, Europe and internationally under several different brand names and which utilizes both mobile and web platforms closed at $8.62 on Wednesday vs its 52 week high of $12.27, though a fair bit above its 12 month low of $6.52.

Flutter Entertainment PLC (PDYPY) offers sportsbooks and exchange sports betting products, daily fantasy sports products, and pari-mutuel betting products; fixed odds games betting products; online games and casinos; peer-to-peer games, including online bingo and poker; and business-to-business services in a number of markets worldwide under a variety of brand names. It closed at $52.50 down from a 52 week high of $63.61 but significantly higher than its 52 week low of $35.16.

The snapshot view above seems to show that for the immediate present, online gaming and casino companies are proving no less immune than other stocks to the current beating the markets are taking. As the Covid-19 pandemic continues to spread, it's impact on the markets will only continue to grow. However, this is one sector to watch as people all over the world seek out alternate forms of entertainment as more and more chose to stay at home, either out of fear or by quarantine/lockdown order.