Casino businesses were among the hardest to be hit when COVID-19 struck the US, and recovery has been slower compared to some of the other market sectors. However, the figures are about to drastically change very soon.
Resort and casino chains in Nevada, New Jersey, Pennsylvania, and some of the other gambling hubs in the country have been booming with activity in the past few months. And despite the cap on occupancy, the numbers game has been strong so far. In fact, as the economic recovery gains pace, casino stock prices will soar beyond the pre-COVID levels.
Just like any other industry, there are highs and lows here too! And that’s the risk you need to take when dealing with the stock market. On that note, here’s how the major gambling markets around the world are coping with the virus.
In Vegas, it’s Business as Usual
Brick and mortar casinos in Vegas shut down in March following the onset of COVID-19. But business resumed in June and the customers have returned in limited numbers. Gambling revenue in July was down almost 32.9% compared to the same period in 2019. And the figures have been on the rise since.
Last reported, hotel reservations were hovering close to the 35% mark, although the room rates were significantly down from the usual levels. The casinos, however, are making up for lost revenue while operating at a limited capacity. And with travel restrictions slowly easing, the casino industry will return with a bang.
Macau Isn’t that Lucky
It’s a whole different story in Macau. Despite the fact that the city was among the first to be hit by the coronavirus, the region hasn’t recovered as swiftly as the investors had hoped for. Last checked, gambling revenue was down almost by 94.5% in the last two months and China’s travel ban will hold things down for the next few months.
Considering how dependent companies like Wynn Resorts and Las Vegas Sands are on Macau’s gambling scenery, it isn’t surprising to see their stock prices hovering near an all-time low. The scenario will only improve as travel restrictions in and around Macau are slowly lifted.
The Light at the End of the Tunnel
Through the pandemic online gambling emerged as the industry’s saving grace, recovering a part of the lost revenue, and most of the large casino chains took note. MGM Resorts, for instance, launched its own mobile casino app called BetMGM. Similarly, Caesars and Wynn have their own versions.
The future of online gambling is clear and the niche is here to stay. Therefore, investing in casino stocks today makes sense. In the long run, however, the earning potential of casino stocks hasn’t changed much and the US market is waiting for a full recovery. Not only is this the perfect opportunity for investing in casino stocks, but shareholders are in for a treat too as the prices soar beyond pre-COVID levels.
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