Why investors should watch casino industry indicators and trends


Nov. 20 2020, Updated 3:47 p.m. ET

Industry outlook

Casino gaming is a business that’s spread across the world. Major casino destinations include Las Vegas, Macau, and Singapore. There are regional venues across all the continents. Casinos at major destinations are being influenced by factors that slow the industry growth. The Macau casino revenue growth slowed more in 2Q14. It generated $45 billion in gross gaming revenue in 2013. In the U.S., the industry has decreased so far in 2014—even though the visitor count grew year-over-year (or YoY) in 1Q14.

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The above chart shows how the share price of major casino operators like Las Vegas Sands (LVS), MGM Resorts (MGM), Wynn Resorts (WYNN), and Melco Crown Entertainment (MPEL) have been negatively impacted over the last three months. In Macau, the casinos are facing several challenges as the end of the year approaches. We’ll discuss the challenges later in this series.


Macau’s VIP gambling, tourist visitation, Baccarat gambling, and the Las Vegas Strip are important indicators in the casino industry. Hotel and convention services for the non-gaming revenues are equally important for the industry. For example, occupancy rates are important indicators for casino resorts like LVS, MGM, WYNN, and Caesars Entertainment (or CZR). A large portion of their revenues come from hotel operations.

These companies are components of exchange-traded funds (or ETFs) like the Consumer Discretionary Select Sector SPDR Fund (XLY). Investors could invest an ETF to lower the risk associated with investing in a single company.

In the next parts in the series, we’ll discuss the indicators and how they impact the industry. This will guide investors. The indicators show major industry trends. We’ll also discuss money laundering in casinos.


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