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Gambling Stock Roundup: Macau Gaming Revenues Dip, LVS to Expand in Singapore

Last week, most stocks in the gambling industry finished in the green. While the industry rallied 3.9%, the S&P 500 Index gained 0.9% in the same period. The uptick can be primarily attributed to in-line Macau Gross Gaming Revenue (GGR) in March.

Moreover, Las Vegas Sands Corp. LVS entered into an agreement with the Singapore government to expand Marina Bay Sands. This apart, MGM Resorts International MGM completed the acquisition of Hard Rock Rocksino Northfield Park’s operating assets from MGM Growth Properties LLC MGP.

Recap of the Last Week’s Most Important Stories

Macau Reports In-Line Gaming Revenues for March

Macau, the world’s largest gambling hub, witnessed a decline in Gross Gaming Revenue (GGR) in March. Notably, this was the second decline in the last three months. Gambling revenues from the region declined 0.4% in the month. However, so far this year, the region has reported highest revenues in March.

In March, gambling revenues from Macau decreased to 25.84 billion patacas ($3.2 billion) from 25.95 billion patacas a year ago. The dip was in line with the analysts’ expectation of flat to down 6%. While the metric was up 4.4% in February, it declined 5% in January. Slowdown in China and the trade war between Beijing and Washington continue to impact casino operators in Macau. The downside can also be attributed to the smoking ban that came into effect on Jan 1 and a not-so-encouraging environment ahead of the Chinese New Year holiday.

Las Vegas Sands to Expand in Singapore

Las Vegas Sands entered into an agreement with the Singapore government to expand Marina Bay Sands. The company is planning to spend approximately $3.3 billion to build a 15,000-seat arena, a luxury hotel tower and an additional MICE (Meeting, Incentive, Convention, and Exhibition) space.

We believe that the addition of non-gaming facilities in Singapore will help drive visitation. Since its launch in 2010, Marina Bay Sands has attracted above 330 million visitors. Also, above 700 MICE events were held at the property. Per the company, this 15,000-seat arena will not only attract entertainers from Asia but also across the globe. The hotel towers will have nearly 1,000 all-suite rooms.

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

MGM Resorts Closes Hard Rock Rocksino Northfield Park Buyout

MGM Resorts International completed the acquisition of Hard Rock Rocksino Northfield Park’s operating assets from MGM Growth Properties. MGM Resorts will also lease the real property connected with Rocksino from a subsidiary of MGP. Located in Northfield, OH, Rocksino offers gaming, dining and entertainment facilities, and spreads across roughly 110 acres.

MGM Resorts also announced that it has rebranded Hard Rock Rocksino Northfield Park as MGM Northfield Park. Rocksino will be included in the existing master lease between MGM Resorts and MGP. Further, annual rent payment to MGP will increase by $60 million, 90% of which will be fixed and the remainder will increase contractually by 2% per year until 2022.

Rocksino — the best-in-class gaming and entertainment destination — and MGM Resorts’ global brand portfolio will bolster this Zacks Rank #3 company’s performance. Markedly, Rocksino has proven leadership in the gaming industry. The buyout will help MGM Resorts to boost revenues and profit.

Century Casinos Opens Racing Entertainment Centre

Century Casinos, Inc. CNTY opened racing entertainment center at Century Mile Racetrack and Casino in South Edmonton, Alberta, Canada. The casino has 550 slot machines and electronic table games, 14 video lottery terminals and 28 unique play stations.

The company is confident about the success of this racing entertainment center as it is very close to the airport, a shopping mall, retail outlets, hotels and a golf course.

Century Casinos has a Zacks Rank #4 (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 past five trading sessions, almost all of the gambling stocks witnessed an uptick in share price. Shares of Penn National Gaming, Inc. PENN, MGM Resorts International and Wynn Resorts, Limited WYNN have gained the most.

However, key sector participants like Penn National Gaming and PlayAGS, Inc. were the major losers in the last six months.

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Wynn Resorts, Limited (WYNN): Free Stock Analysis Report
Penn National Gaming, Inc. (PENN): Free Stock Analysis Report
Las Vegas Sands Corp. (LVS): Free Stock Analysis Report
Century Casinos, Inc. (CNTY): Free Stock Analysis Report
MGM Resorts International (MGM): Free Stock Analysis Report
MGM Growth Properties LLC (MGP): Free Stock Analysis Report
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