It’s been a year since Nevada casinos shut their doors. Driven by a global pandemic and concerns that casinos could serve as “superspreader” venues, Governor Sisolak’s decision was controversial to say the least.
Major casino conglomerates suffered severe damage to their bottom line, including slashed stock prices courtesy of dwindling revenue. Fortunately, a new day has dawned in Las Vegas and beyond, leaving casino- and gambling-based stocks in perfect position for a possible rebound as 2021 progresses.
*The author is not an investment expert by any means, simply a gambling industry expert who enjoys recreational day trading from time to time. With that in mind, this site must remind readers that investing always involves risk, including the risk of lost principle. As with gambling, you should always invest responsibly and perform your own due diligence before placing any stock market investments.
1 – MGM Resorts International (“MGM” on the NYSE)
Way back on March 17th of 2020—a day which will live in infamy for many — MGM Resorts International watched its stock plummet and close at $9.55 per share.
One week before, the stock was worth more than double. And in mid-January, when the idea of shutting down the global casino industry was unforeseeable, MGM shares sold at their 2020 peak of $34.54.
But one week after Sisolak’s public health initiative put casinos in the crossfire, MGM bottomed out at $9.11.
Fortunately for MGM shareholders, what a difference a year makes…
At the time of writing, the stock has surged back to never-before-seen heights, selling at $38.
As one of Sin City’s two major casino operators along with Caesars Entertainment, MGM controls 10 casinos along Las Vegas Boulevard. These include crown jewels of the Strip, such as the Bellagio, Aria, and MGM Grand.
The company also owns a 42.5% stake in T-Mobile Arena — home of the Las Vegas Golden Knights professional hockey team — along with the adjoining Park MGM resort.
Other assets on the Las Vegas Strip include the Mandalay Bay Convention Center and the MGM Grand Arena, home to major boxing and mixed martial arts (MMA) bouts. All told, MGM is well-diversified within the Las Vegas locale alone.
Even better, the company runs casino resorts all over the world, with venues in Maryland, Michigan, Mississippi, New Jersey, Ohio, and even China.
MGM’s rise back into the realm of stock price respectability coincides neatly with Sisolak’s casino reopening date of June 4th. Shares cost $21.72 apiece at that point, before enjoying a steady upward trajectory ever since. By New Year’s Eve of 2020, the stock had climbed to $31.51, or more than triple its low point when closures were imminent.
That growth has only continued , and when compared to the other casino stocks on this list, MGM still might just be a bargain.
2 – Caesars Entertainment (“CZR” on the NASDAQ)
It’s not every month that a major international corporation sees its stock slide by nearly 90%.
But that’s exactly what happened to Caesars Entertainment, the chief rival to MGM with nine casino resorts around the Las Vegas Strip. On February 21st, 2020, only weeks removed from Sisolak’s executive order, shares of CZR stock sold at $68.12.
But by March 20th, with its properties then closed down for seven consecutive days, the stock price had dropped off a cliff to only $8.82. Like MGM and its other global competitors, Caesars Entertainment was forced to bear the brunt of pandemic-inspired closures of public spaces.
Thankfully, all bad things came to an end…
When the casinos reopened on June 4th, a share of CZR stock was worth $42.94—good for a rebound of nearly five times its low point.
The momentum continued when Caesars Entertainment agreed to a massive multibillion-dollar acquisition offer from Eldorado Resorts in late June.
Although widely regarded as a smaller-scale company centered around casinos in Reno and elsewhere, Eldorado’s executives managed the pre-pandemic era much better than their counterparts at Caesars. As a result, Eldorado put itself in position to leverage the larger Caesars’ decimated revenue to make an $18 billion offer—one that the latter simply couldn’t refuse.
The newly formed super casino conglomerate now owns and operates over 50 properties worldwide, with Eldorado choosing to preserve the iconic Caesars brand.
The merger’s final approval by the Federal Trade Commission on July 20th sent the newly-fueled CZR stock soaring to nearly $60 two months later. By Thanksgiving, CZR shareholders who “bought the dip” were giving thanks as the stock finally eclipsed its pre-closure peak at $70.10.
With 2021 offering even more encouraging news on the vaccine front, CZR shares can currently be had for $98 and counting.
3 – Penn National Gaming (“PENN” on the NASDAQ)
Unlike the first two entries found here, both legendary Las Vegas staples, Penn National Gaming is a relative upstart in the industry based out of tiny Wyomissing, Pennsylvania.
The company began as a single horseracing track, Penn National Race Course, before acquiring additional racing venues throughout the 1990s. By 2000, Penn National began a pivotal expansion by adding small regional standalone casinos to its portfolio.
The company’s major gambling industry move occurred in 2003, when it bought out the Hollywood Casino Corp for $780 million. This brought several existing Hollywood casinos into the fold, while allowing Penn National to convert its old racetracks into dual “racinos.”
Two years later, the acquisition of Argosy Gaming made Penn National the third largest gambling operator in the US behind only MGM and Harrah’s Entertainment (soon to become Caesars). In fact, in 2006, the company attempted to purchase Harrah’s before Caesars came calling.
Today, Penn National owns and operates dozens of land-based casinos nationwide under its Ameristar and Hollywood brands.
More importantly, the company has been bold in its plans to capitalize on statewide online gambling and sports betting legalization. Penn Interactive is now a major real money online gambling player in states like New Jersey, Illinois, Indiana, Iowa, Nevada, and of course, Pennsylvania. This shift towards online gambling was accentuated in early 2020 through Penn National’s $450 million acquisition of millennial fave Barstool Sports.
Like so many other gambling-based businesses, PENN stock suffered as state governments began to prioritize public safety due to the impending health crisis. PENN stock fell from $37.81 on February 21st, 2020, to a low of $7.89 one month later, good for a drop of nearly 80%.
Fast forward to August 5th, however, and PENN had already erased all of those losses by reaching a share price of $38.39. And it never looked back.
PENN crossed $70 per share by September 21st, and topped $100 for the first time on January 11th of this year. Today, the price stands at $124 while enjoying consistent jumps of $10 a day.
4 – Wynn Resorts (“WYNN” on the NASDAQ)
When compared to the sprawling casino empires created under the MGM, Caesars, or Penn National names, Wynn Resorts seems rather small at first glance.
Under the pioneering leadership of former owner Steve Wynn, who was eventually banished from the company amidst sexual harassment allegations, Wynn Resorts made its Sin City splash in 2005. By opening the lavish Wynn Las Vegas, along with its sister property Encore Las Vegas three years later, the eponymous mogul focused on providing top of the line luxury at every turn.
But since debuting those venues, Wynn Resorts never opened another resort in Las Vegas. Aside from the recently completed Wynn Boston Harbor, the company’s interests have largely lied in Macau, where a similar set of properties can be found angling for the lucrative Asian gambling market.
Shares of WYNN stock were priced at $132.14 on February 14th, but they plunged to $48.50 by April 3rd in the wake of casino closures in both Las Vegas and Macau.
Benefitting from the company’s fierce devotion to gambling in Macau, and the tightly controlled city’s brisk conquest of the pandemic, Wynn Resorts saw normalcy return rather quickly. As casinos in Macau were only closed for two weeks beginning on February 20th, Wynn Resorts was back up and running well before its larger competitors.
Today, the stock sits at $134, a few points higher than it was when the closure crisis began one year ago.
5 – Boyd Gaming Corp. (“BYD” on the NYSE)
If you enjoy the “off-Strip” joints in Las Vegas like South Point, Orleans, or Gold Coast, you know all about Boyd Gaming Corp.
This company is all about sticking to its lane and appealing to budget-minded locals. With that said, a well-diversified portfolio of regional casinos in Nevada and across the nation gave Boyd Gaming a step up versus Las Vegas-centric rivals.
After falling from $33.91 to $11.22 in the immediate wake of Nevada’s closures, shares of BYD have climbed by nearly six times since. The current price of $60.35 means BYD shareholders who bought low have cleared a tidy return on their investment. Meanwhile, folks who stuck around through thick and thin have seen their patience pay off with returns of nearly double.
They say the stock market is just gambling dressed up in a suit and tie, but I’m not here to get into that debate. Just like the casino floor, the trading floor revolves around players looking to apply skill and strategy to gain an edge, all while avoiding the short-term variance known to gamblers as “bad luck” and traders as “negative volatility.”
Whether you’re a regular gambler interested in exploring the market, or a wizened broker looking to capitalize on casinos’ enduring popularity, I hope this page serves you well as the world finally returns to normalcy.
Michael Stevens has been researching and writing topics involving the gambling industry for well over a decade now and is considered an expert on all things casino and sports betting. Michael has been writing for GamblingSites.org since early 2016. …