First Stock Tumble Writes Off Billions from Gaming Companies
- Wednesday, August 16 marks solid downturn in stock value
- American casino & gaming brands lose billions
- Next recession probably coming, but no concerns expressed by the sector’s leaders
Casino brands lose billions of market value on first recession signs in the U.S. Yet, brands remain cautiously determined in terms of investment portfolios.
A Recession Hits U.S. Casino Market, Or Does It?
On Wednesday, the stock market took a tumble, writing off billions of stock valuation for some of the major U.S. casino brands. Some of the biggest losers were Wynn Resorts Ltd. which saw trade day on Friday, August 16 close at $105.55 per share whereas a week prior, the trade ran at $107.87.
Meanwhile, Boyd Gaming Corp. saw its share price go down to $23.01 from $24.41 a week before. The Treasury itself slipped below the 2-year yields, sending a warning sign of a potential recession – big time, even though the White House is not entirely convinced.
Yet, the casino industry is composed, as affirmed by Union Gaming analyst John DeCree who doesn’t think any big brand would make immediate changes to its investment strategy. In fact, most good investment projections must have included recession on the way.
Yet, DeCree sees a reason why companies would treat any new endeavors with caution. So while you wouldn’t see Hard Rock go back on $200 million renovation investment in the Hard Rock Hotel & Casino Las Vegas becoming Virgin Hotels – which GamblingNews famously misreported – companies may yet second-guess any big commitment over the next 12 months.
Some companies might want to see what happens next – if the stock share starts sliding, then broader changes in investment structure and plans could be necessary. Boyd’s spokesperson, David Strow, confirmed that there would be no immediate changes to how the company treated any of its commitments.
Most brands have kept quiet about the recent stock development – perhaps most don’t consider it necessary at this point, as there is no clear trend yet.
Casinos and Consumers: Different Sides, Same Coin
Yet, one things casinos will need to consider is also their visitors’ spending power. Big companies usually operate too much cash to be in immediate danger, but when players cannot afford to put down as much on gaming, then Las Vegas and other hotbeds around the U.S. could see their industry affected.
What is fairly certain is that recession is on its way, although no-one is entirely sure how this would play out. Economists haven’t been too worried, but they have cautioned about an upcoming downturn in global economy.
The U.S. casino market has all the reasons to be concerned, but not panic. Everyone seems prepared to withstand the next tumble in the global economy – when it arrives.
Simon is a freelance writer who specializes in gambling news and has been an author in the poker/casino scene for 10+ years. He brings valuable knowledge to the team and a different perspective, especially as a casual casino player.
