U.S. Markets closed

Gambling Stock Roundup: Macau's Gaming Revenues Decline, Roar Digital Launches BetMGM

Zacks Equity Research

The last week began on a disappointing note for gambling stocks as Macau witnessed a decline in Gross Gaming Revenues (GGR) in August for the second straight month. However, as the week progressed, stocks recovered and ended in positive territory. As a result, the industry gained 1.5% compared with the S&P 500’s 1.7% growth in the said period. This uptick can be primarily attributed to the expansion in sports betting footprint, which has given the industry a new lease of life.

Recap of Last Week’s Most Important Stories

Macau’s Gambling Revenues Decline in August

Gaming revenues from Macau, the world’s largest gambling hub, declined 8.6% in August. The metric decreased to 24.3 billion patacas ($3.01 billion) from 26.6 billion patacas recorded a year ago. It was also below analysts’ expectation. The same had decreased 3.5% in July.
 
Notably, a slowdown in China and the trade war between Beijing and Washington continues to impact casino operators in Macau. Further, protests in Hong Kong as well as regulatory uncertainty over high-roller junkets negatively impacted the gaming industry.

Roar Digital Launches BetMGM App in New Jersey

Roar Digital, LLC, a joint venture between MGM Resorts International MGM and GVC Holdings, launched BetMGM — an online betting app in New Jersey. BetMGM, which can be downloaded from App Store, is a rebranding of the online betting app, PlayMGM, introduced in 2017.

Adam Greenblatt, CEO of Roar Digital, stated that “We're thrilled to give our customers bigger and bolder opportunities to enjoy the games and unique experiences that BetMGM will provide as the professional and collegiate football seasons get underway. We believe our product takes in-game entertainment to the next level.” The company wants to capitalize on the growing demand for the mobile gaming market.

MGM Resorts carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Caesars Entertainment Expands Sports Betting Footprint

Ever since the legalization of sports betting outside Nevada, Caesars Entertainment Corporation CZR is making solid efforts to expand its sports betting footprint. According to the company, it has expanded sports betting in seven states since August 2018, which include Nevada, New Jersey, Pennsylvania, Mississippi, Iowa, Indiana and New York. By the end of this September, the company will have sports betting operations in 29 locations.

Caesars Entertainment will also launch sports betting in Pennsylvania during fourth-quarter 2019. Executive vice president of Gaming & Interactive at Caesars Entertainment, Christian Stuart, stated that “The sports betting landscape continues to evolve and Caesars Entertainment is leading the industry by offering new and innovative ways for fans to engage with sports-related content while placing their bets in a sports book or through a mobile app.”

Caesars Entertainment has a Zacks Rank #3.

Churchill Downs to File Request for 2020 Winter Meet

Churchill Downs Incorporated CHDN announced that the company is planning to file an application with the Kentucky Horse Racing Commission for holding 2020 winter Thoroughbred racing meet at Churchill Downs Racetrack in Louisville, KY. Currently, it is constructing New Latonia Racing & Gaming (New Latonia), valued at $200 million.

Kevin Flanery, president of CDRT stated that “Our willingness to make a sizeable investment in the neglected northern Kentucky market is our latest effort to improve Kentucky’s valuable horse racing and agriculture industries.”

Churchill Downs holds a Zacks Rank #5 (Strong Sell).

Price Performance

The following table shows the price movement of the major gambling stocks in the last week and the last six months:  




In the last five trading sessions, shares of Penn National Gaming, Inc. PENN and PlayAGS, Inc. AGS have gained the most.

However, the key sector participants like Caesars Entertainment Corporation CZR and MGM Resorts were the major gainers over the last six months.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
MGM Resorts International (MGM) : Free Stock Analysis Report
 
Penn National Gaming, Inc. (PENN) : Free Stock Analysis Report
 
Caesars Entertainment Corporation (CZR) : Free Stock Analysis Report
 
Churchill Downs, Incorporated (CHDN) : Free Stock Analysis Report
 
PlayAGS, Inc. (AGS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research