Coronavirus shakes gambling markets as stocks plummet
Fear of the Coronavirus has sent the US stock market into a weeks-long plummet with some gaming and hospitality companies suffering substantial blows to their valuations.
Some gaming corporations saw double digit stock drops on Monday.
Wynn Resorts was trading at around $82.00 by late afternoon, its lowest mark since February 2016.
Boyd Gaming fell over 8% on Monday and was on pace to finish under $21.00 for the first time since late 2018.
Caesars Entertainment bottomed out at $10.00, while MGM Resorts took a 12% hit that dropped trading to $18.00, a low not seen since summer of 2015.
As more companies cancel events in Las Vegas and American travelers cancel trips out of fear of catching the virus, casinos must brace for a tough March.
In Macau, February gaming revenues fell 88% year-on-year, forcing companies to re-evaluate their expected earnings.
Las Vegas won’t see nearly as big a drop-off — only a handful of Coronavirus cases in southern Nevada have so far been confirmed — but corporations are already canceling conventions in Sin City.
Google and Adobe canceled Las Vegas conferences, while the White House scrapped the Association of Southeast Asian Nations set to be held in Las Vegas this coming weekend.
Jason Ader, CEO of SpringOwl Asset Management, tells Gaming America: “It’s not catastrophic but at the margin it’s not good. I do see in Europe and the UK that as the land-based business and the travel business decline, a very steady hand in online gaming.”
Ader believes that more people staying home will lead to more online sports betting.
States with active legalized online sports betting would be able to reap those benefits.
The possibility of major American sports events being canceled poses a substantial risk to sports betting markets, both for retail and online.
The first weekend NCAA Tournament historically provides some of the busiest days of the year for Las Vegas sportsbooks.
Ader said: “It’s a very important sports betting weekend but it’s also a very important weekend for group congregation.”
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