Casino operators in the US are close to partying like it’s 2019, but they’re not there quite yet. Revenue levels are rebounding following a disastrous 2020 caused by COVID-19 and recovery is coming quicker than what was previously expected. Soon, casino operators could find their revenue matching that of 2019, and industry analysts believe that Caesars Entertainment and MGM Resorts International could get there first. The two gaming companies have received continued support from analysts and Joseph Greff of JPMorgan is the latest to weigh in. He has boosted his forecast for the companies’ stocks, making him the third analyst in a little more than a week to show increased optimism for an accelerated recovery.
Caesars, MGM Lead Vegas Rebound
Overall, the level of activity being seen in Las Vegas is setting the pace for the gambling industry in the US, and Caesars and MGM are leading the pack. Greff, like other analysts, believes that gaming operators will see earnings per share in the second quarter that are better than previous expectations, with even greater improvements coming throughout the year. Since 2021 began, Caesars’ stock has risen 49.23%, while MGM’s price has improved by 38.18%. Both have seen dips this week, with MGM taking a more significant fall, but the overall performance is outpacing that of other gaming operators.
Part of the reason for the increased optimism comes from the fact that casino operators are now better referred to as gaming operators. As they delve into other markets, such as iGaming, sports gambling and more, former casino operators have much more to offer. This is reflected in the additional support by analysts, as well, as Caesars and MGM are expected to capitalize on their expansion into online casinos and sports gambling. With the NFL season quickly approaching, the second half of the year should be particularly strong as football wagers increase.
For Caesars, which is currently dealing with a potentially expensive lawsuit, Greff expects the strongest results. He moved his forecast from $120 to $129, partly due to the operator’s performance, but also because of the pending sale of its non-US William Hill assets. Greff bumped MGM from $47 to $52, $8 more than the Wall Street average.
US Casinos Back in Business
Across the US, casino markets are staging a comeback and trying to forget about the damage caused by COVID-19. In less than a month, the country celebrates Independence Day, which is going to have a different meaning this year. Las Vegas is planning a huge party to mark the occasion, celebrating not only the country’s independence, but independence from health restrictions, as well. Across Nevada, all land-based casinos have been able to return to full capacity and remove COVID-19-induced face masks and social distancing.
As of June 1, a number of states have reduced or eliminated COVID-19 restrictions, according to the American Gaming Association (AGA) and individual state reports. Arkansas, Florida, Massachusetts, New Jersey and a few others are back to normal, while Missouri is still moving slowly. It has removed restrictions, but local cities and counties have the final say. Several other states, according to the AGA’s most recent data from June 7, still have certain statewide restrictions in place, but are working to eliminate them.