Why the US casino market performed well


Nov. 19 2019, Updated 5:17 p.m. ET


The US casino industry is very important for the states that operate casinos. Casinos create jobs and business opportunities. They also provide gaming tax revenue to the government. This helps stimulate struggling economies. Modern casinos offer diverse amenities that attract most types of tourists. They also attract a substantial number of overseas visitors.

The Dow Jones U.S. Gambling Index and ETFs—like the VanEck Vectors Gaming ETF (BJK)—track the performance of casino companies. BJK tracks US casinos. The above chart shows the indexed performance of BJK, the Dow Jones U.S. Gambling Index, and the SPDR S&P 500 (SPY) ETF.

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Last month, both BJK and the Dow Jones U.S. Gambling Index outperformed the broader market SPY. They had returns of 5.3% and 2.5%, respectively. SPY had a 2.1% return. SPY replicates the performance of the actual S&P 500 Index. Investors may invest in BJK to hold a diversified portfolio in the casino industry.

Overseas expansion 

Today, a number of US-based casino companies have operations in foreign markets—like Macau. Also, they’re developing new properties in Macau.

US-based casino companies that are currently developing their casinos in the Cotai region in Macau include Las Vegas Sands (LVS), Wynn Resorts (WYNN), and MGM Resorts (MGM).

Casino companies that aren’t based in the US include Melco Crown Entertainment (MPEL) and Galaxy Entertainment. They’re developing casinos in the Cotai region in Macau as well.

Macau is the largest gambling market in the world. It’s the only place in China where gambling is legal.

To learn about the casino indicators and recent trends in Macau read Casino Indicators And Recent Trends That Investors Should Watch.

In this series, we’ll discuss certain primary indicators that are shaping the US casino industry.


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