A brief overview of casino stocks

Like any business, casino chains also have the chance to have stocks listed on the exchange. Almost all of the casino chains listed on the stock exchange are some of the most successful in the world, owning multiple casinos. However owning shares in casinos can be fairly risky considering that casinos mainly depend on betting and gambling from tourism. If the number of people going to locations to such as Las Vegas and Macau is below expectations, it can have a seriously negatively effect on the industry and casino chains. Despite this risk, in the past year, casinos (and casino groups) have been performing remarkably well with their stocks slowly increasing in price.

There are numerous reasons why casinos have experienced this sort of growth, but the main reason is because of the increased Western investment and new casino properties in Macau. Macau is recognised as the largest gambling market in the world that generates billions per year for the casino industry. As gambling makes up around half of the state’s economy, it is vital that casino tourism thrives otherwise the whole industry suffers. In 2015, gambling in Macau dropped significantly leading to a crisis in Macau and the whole gambling industry. In return, this led to share prices of casino rapidly dropping. However since then shares have steadily risen and are continuing on an upwards trend.

At the time of writing this article, the best performing casino group on the stock exchange was Wynn Resorts. Despite the share price being as low as $56 in 2014, it has slowly risen over the past few years and is now sitting at around $131. As mentioned earlier, the majority of large casino chains have benefitted massively from the improved performance in Macau. However, the launch of the new Wynn Palace resort and an influx of ‘VIP’ players have helped improve revenue in Macau alone. Wynn Resorts Casinos are also performing exceptionally well back in Las Vegas. With stocks for casinos on the rise and investors continuing to invest in them, you can expect Wynn Resorts to be one of the best performing casino groups for the foreseeable future.

Two other casino chains which have benefitted from the improved performance of the casino and betting industry are Las Vegas Sands and Melco Resorts & Entertainment. Like the majority of casino chains, both Las Vegas Sands and Melco both suffered in 2015 due to the unexpected gambling profits drop in Macau. Although the share prices are not as high as they were before the 2015 drop, they have been slowly improving in the past two years. With both casinos performing well in Las Vegas and Macau, you can expect these chains to continue to have their stock price rising.

Although these casino chains are some of the best performers around at the moment, there are a few companies on the stock exchange which have the potential to reach the same heights. The chain with the most potential of reaching the heights of the other casino chains are Pinnacle Entertainment. In the past year, its rate of return is 80.6% is currently one of the highest on the stock market for casino chains. Penn National Gaming also has the potential to become of the largest casino chains. Penn National Gaming has increased their portfolio throughout the years and owns multiple casinos. With the chain having their best year to date,

Overall if you are looking to invest in any casino stocks at some point, now is definitely to get involved as they are continuing to rise.