Why Casino Stocks Have Jumped This Week
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MGM Resorts, Las Vegas Sands, Wynn Resort and Penn National jumped as Macao eased some travel restrictions to the region. U.S. casino operators Caesars Entertainment and Boyd Gaming jumped on a combination of bullishness for online gambling and the relief of investors who think low interest rates will last a little longer.
Macao eased a rule that visitors from Guangdong province in China need a negative COVID-19 test within 48 hours prior to arrival. Macao is critical to operators like MGM, Wynn, and Las Vegas Sands. In the U.S., investors are betting that the upcoming college football and NFL seasons will lead to an increase in online gambling. Federal Reserve Chair Jerome Powell indicated the central bank won't take its foot off the gas too quickly when it comes to quantitative easing or interest rates.
This week, casino stocks jumped, but the industry is still struggling financially. I'm holding on to my casino shares this week. If news from Macao or online gambling companies isn't as favorable as hoped, the shares could fall again.
