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Gambling Stock Roundup: WYNN to Sell Massachusetts Casino, DIS & CZR Ink Deal

Zacks Equity Research

Last week, gambling stocks put up a dismal show, primarily due to the trade war between Beijing and Washington. Moreover, flagging China property price impacted the high-end VIP segment. Consequently, the industry underperformed the S&P 500 last week. The industry declined 0.7% against the S&P 500’s 1.8% gain.

Recap of Last Week’s Most Important Stories

Wynn Resorts Plans to Sell Massachusetts Casino to MGM

Wynn Resorts, Limited WYNN is in preliminary talks with MGM Resorts International MGM to sell its yet-to-be opened $2.6 billion Encore Boston Casino to the latter. Wynn Resorts, which received its Massachusetts license in 2013 for the construction of 671-room Encore Boston Harbor in Everett, MA, is likely to open the property in June.

The deal is not going to be an easy one for MGM Resorts as the company already operates a casino in Springfield. Per to Massachusetts law, a company can have only one casino license in the state.

Both Wynn Resorts and MGM Resorts carry a Zacks Rank #3 (Hold).

Disney & Caesars Entertainment Ink Deal

The Walt Disney Company’s (DIS) ESPN and Caesars Entertainment Corporation (CZR) signed an agreement pertaining to sports betting. Per the terms of the deal, ESPN will have a studio at Caesars' Linq Hotel & Casino in Las Vegas. For ESPN's sports betting-related show, Daily Wager, content will be created in the studio. Caesars Entertainment will be the official data provider for ESPN across TV and digital platform.

Moreover, in the previous week, Caesars Entertainment stated that the company will sell its South-African property — Emerald Resort & Casino — to Peermont Hotels, Casinos and Resorts, a Johannesburg-based hospitality and entertainment company. The value of the deal stands at $49 million.

Caesars Entertainment currently has a Zacks Rank of 3.

Stars Group’s Earnings & Revenues Lag Estimates in Q1

The Stars Group Inc. (TSG) reported first-quarter 2019 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. The company reported adjusted earnings per share of 38 cents, which missed the consensus estimate of 43 cents. The bottom line also declined 43.3% on a year-over-year basis.

Revenues came in at $580.4 million, lagging the Zacks Consensus Estimate of $613 million. However, the top line increased 47.7% year over year owing to contribution of revenues from Sky Betting & Gaming and BetEasy.

Cash and cash equivalent at the end of quarter came in at $599.7 million compared with $721.1 million as of Dec 31, 2018. Long-term debt at the end of the first quarter totaled $5,912 million, up from $5,411.2 million as of Dec 31, 2018.

Stars Group carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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 Melco Resorts & Entertainment Limited MLCO and Las Vegas Sands Corp. LVS have lost the most.

However, key sector participants like Century Casinos, Inc. CNTY and Melco Resorts & Entertainment were the major gainers in the last six months.

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MGM Resorts International (MGM) : Free Stock Analysis Report
 
Las Vegas Sands Corp. (LVS) : Free Stock Analysis Report
 
Wynn Resorts, Limited (WYNN) : Free Stock Analysis Report
 
Century Casinos, Inc. (CNTY) : Free Stock Analysis Report
 
Melco Resorts & Entertainment Limited (MLCO) : Free Stock Analysis Report
 
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