If you think the only gamble in a casino is found at a table or a machine, then you might be missing out on one of the more high-stakes contests involved: the market. Casino stocks have a great potential to deliver value, and today they delivered action that doesn’t come in red, black, or multiples of seven.
First, Wynn Resorts (NASDAQ:WYNN) posted its earnings and delivered a mixed bag for investors. While Wynn pulled a win on revenue, it came up snake eyes on earnings. Wynn posted a loss of $1.23 per share against an expected loss of only $1.16 per share. However, the $1 billion in revenue brought in came out ahead of the $955.88 million projected.
Meanwhile, MGM Resorts International (NYSE:MGM) pulled in some impressive earnings. It also revealed a key point about future developments. MGM management made it clear: it was not planning to acquire Entain. Nor would it seek the outstanding portions of BetMGM that it doesn’t already own. That was enough for Jefferies, via analyst David Katz, to maintain a Buy rating on MGM Resorts International.
Finally, Credit Suisse analyst Kenneth Fong offered up a positive note about casinos in general, in one particular place: Macau. We’ve heard about the revival of the Macau gaming market before, but now it seems like it could stick thanks to the reversal of China’s economy-killing Zero-COVID policies. Fong noted that solid news coverage and revenue improvement was likely to drive improvements in investor sentiment. It would also drive overall share price performance.
A look at the last five days in trading for the Roundhill Sports Betting & iGaming ETF (BETZ) shows that investors are indeed a little leery of investing in the casino space for now. The overall pattern is somewhat volatile, in a tight range. However, a recent recovery earlier in Thursday morning’s trading was blunted and turned downward in Thursday afternoon.