E Will COVID-19 Be A Boon For Online Gaming Casinos?

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 Although China has since rescinded the shut-down, international travel is quickly grinding to a halt.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?

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Bindi Dhaduk 3 months ago Member's comment

Nice article. But what the heck is pari-mutuel betting?

Barry Glassman 3 months ago Member's comment

This is an interesting idea. In general, the author is correct, online companies should fare well during these chaotic times, while traditional companies with physical locations should suffer. But unfortunately, gambling is an addiction. I suspect many will turn to online equivalents to get their "fix." These online companies are a buying opportunity at the moment.

Barry Hochhauser 3 months ago Member's comment

Very true. What other gaming stocks are worth investing in David Marshall?