The Major Catalysts That Have Investors Rolling the Dice on Casino Stocks
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Months after being docked by the pandemic, cruises are back out to sea. All after the Centers for Disease Control and Prevention allowed them to sail again with strict safety protocols, as noted by CNBC. “Royal Caribbean Cruises was the first cruise operator to sail a ship from a U.S. port since the beginning of the pandemic when its Celebrity Edge ship left Miami last Saturday. Carnival’s next cruise from a U.S. port is the Carnival Breeze, which is scheduled to leave from Galveston on July 15.” That’s not only good news for cruise stocks. It’s also great news for those that benefit from onboard casinos, like Jackpot Digital Inc. (TSXV:JJ)(OTCQB:JPOTF).
Even better, Nevada casinos raked in $1.23 billion in May. “It’s the highest single-month win in the state’s history, blowing past a $1.165 billion record set in October 2007,” says the Associated Press. “In May, 2.9 million people visited Las Vegas, according to the Las Vegas Convention and Visitors Authority, an increase of nearly 12% from April,” which benefits companies such as Jackpot Digital, Penn National Gaming (NASDAQ:PENN), Wynn Resorts (NASDAQ:WYNN), Scientific Games Corp. (NASDAQ:SGMS), and Draftkings (NASDAQ:DKNG).
Jackpot Digital’s (TSXV:JJ)(OTCQB:JPOTF) Largest Customer Resumes Sailings
Jackpot Digital Inc. just announced that its largest customer, Carnival Corporation & plc, kicked off its first cruise in almost 16 months from the Port of Miami, the Cruise Capital of the World, on July 4 with the departure of the Carnival Horizon.
The ramp up toward regular sailings from Miami, the world’s largest cruise ship port, also signals the re-start of gaming activity on cruise ships. Jackpot Blitz™ electronic table games (ETGs) are installed aboard many of these ships and have generated revenues for Jackpot.
Jackpot Digital CEO, Jake Kalpakian, states “the resumption of sailings by our largest customer is meaningful and we expect an immediate and positive revenue impact for our Company. We are emerging from a challenging year when ships and their casinos were closed. A return to business with our at-sea customers will complement Jackpot’s aggressive land-based expansion plans. Since receiving GLI certification, the Company has experienced increased interest in its ETGs from regulated land-based casinos.”
The Company has positioned itself as a leading provider of ETGs on cruise ships around the world including leading brands such as Carnival, Princess, Costa and Virgin Voyages. This winter, the Company is also scheduled to begin installations aboard Royal Caribbean vessels.
Jackpot’s recent acquisition of key assets from 52 Gaming LLC have also added Holland America and P&O Australia to its roster of customers.
In addition to the Miami departures, many more ships are scheduled to depart from multiple ports as the cruise ship industry moves toward resuming normal operations.
Other related developments from around the markets include:
Penn National Gaming announced that it has received final approval from the Maryland Lottery and Gaming Control Commission to acquire the operations of Hollywood Casino Perryville. Penn National entered into a definitive agreement with Gaming and Leisure Properties, Inc. in December 2020 to acquire the operations of Hollywood Casino Perryville for $31.1 million in cash, subject to certain customary working capital adjustments. Simultaneous with the closing of the transaction, Penn National will enter into a lease with GLPI for the real estate assets associated with the Hollywood Casino Perryville facility with annual rent of approximately $7.77 million.
Wynn Resorts reported financial results for the quarter ended March 31, 2021. Operating revenues were $725.8 million for the first quarter of 2021, a decrease of 23.9%, or $227.9 million, from $953.7 million for the first quarter of 2020. Net loss attributable to Wynn Resorts, Limited was $281.0 million, or $2.53 per diluted share, for the first quarter of 2021, compared to net loss attributable to Wynn Resorts, Limited of $402.0 million, or $3.77per diluted share, in the first quarter of 2020. Adjusted Property EBITDA (1) at our integrated resort properties increased $17.2 million, $50.2 million, and $43.0 million at Wynn Palace, our Las Vegas Operations, and Encore Boston Harbor, respectively, and decreased $2.7 million at Wynn Macau, when compared with the first quarter of 2020.
Scientific Games Corp. announced that Bremer Toto-Lotto GmbH, the state lottery in Bremen, Germany is modernizing the retail experience with a move to high-performance WAVE retailer terminals. As part of a new contract with Bremer Toto-Lotto, Scientific Games will provide the new, advanced WAVE terminals along with the Company’s new SYMPHONY EDGE terminal software, cloud-based SYMPHONY terminal management system, and software maintenance. Michael Barth, Managing Director for Bremer Toto-Lotto GmbH, said, “Moving to more advanced lottery terminals across our network brings us yet another step closer to modernizing the lottery experience with Scientific Games, our trusted, longtime technology provider. We are confident that this is a very positive move that will be well-received by our retailers.”
Draftkings Inc. announced the addition of DK Craps to its mobile Casino suite in New Jersey with Pennsylvania, Michigan and West Virginia to follow pending regulatory approval. The game is a DraftKings-exclusive and built in house. The launch of DK Craps expands on 494 existing DraftKings Casino games across approved states, 50 of which have been built leveraging DraftKings in-house talent and technology. “As the most realistic craps game on the market, we are excited to offer a premier online experience within our top-rated Casino product,” said Jason March, DraftKings Vice President, iGaming. “Craps was a challenging game to develop given the seemingly endless paths players can take, so I could not be prouder of our internal teams taking on this game development to deliver an authentic experience.”
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