Why Are Casino Stocks WYNN, LVS Down Today?

  • Wynn Resorts (WYNN) and Las Vegas Sands (LVS) are slumping after new anti-coronavirus restrictions were imposed by Beijing on Macau.
  • All casinos in Macau will be closed until next weekend.
  • Both Wynn and Las Vegas Sands generate a great deal of revenue from Macau.
casino stocks - Why Are Casino Stocks WYNN, LVS Down Today?

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Wynn Resorts (NASDAQ:WYNN) stock and Las Vegas Sands (NYSE:LVS) stock are both declining 8% in early morning trading. Casino stocks are slumping after new Covid-19 restrictions were imposed in the Chinese region of Macau. Although Wynn and Las Vegas Sands are based in the U.S., they both own multiple casinos in Macau.

New Restrictions in Macau and Elsewhere

After the new coronavirus cases in Macau surged over the last several weeks, Chinese authorities closed all of the casinos in the region. On July 9, officials reported that the casinos would be shuttered for at least a week. This is the first time that Beijing has closed the region’s casinos since 2020.

China has also launched other new, anti-coronavirus measures, including, according to the Financial Times: “a mandate for testing more than 6mn residents in the southern Chinese city of Guangzhou and orders for further compulsory testing by authorities in Shanghai.”

Wynn Resorts and Las Vegas Sands’ Presence in Macau

Wynn owns two casinos in Macau. Before the pandemic, the two establishments were the company’s most profitable resorts. Moreover, in 2019 “Macau accounted for 70% of Wynn’s business.”

Las Vegas Sands owns seven casinos in Macau. According to Barron’s, it obtains “a little over two-thirds of its business from Macau, with the remainder coming from its Marina Bay Sands property in Singapore.”

Two Bullish Takes on Casino Stocks

On July 1, Barron’s predicted that Las Vegas Sands’ bottom line could jump after the restrictions in Macau are rolled back. Barrow Hanley Global Investors believed that those who bought LVS stock were paying almost nothing for the company’s Macau assets, Barron’s stated.

On July 7, Zacks predicted that WYNN stock would probably be boosted by “sports-betting expansion, non-gaming revenue-boosting strategies and [its] expansion efforts.” The firm, however, conceded that the weaker trends in Macau were still worrisome for Wynn and its shares.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.

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