Last week was quite an eventful one for the gambling industry with news of Japan set to have its first casino resorts flowing in after its parliament legalized the same.

Meanwhile, Melco Crown Entertainment Limited’s founding shareholder Crown Resorts slashed its stake in it in order to reduce exposure to the volatile gaming market of Macau and refocus on its Australian operations.

On the other hand, The Wynn Resorts (WYNN Quick QuoteWYNN - Free Report) in Las Vegas recently announced that it will put Amazon.com, Inc.’s (AMZN Quick QuoteAMZN - Free Report) Echo in all its hotel rooms by coming summer. In a separate development, Wynn Resorts joined hands with Crown Acquisitions to build up and manage retail offerings at Wynn Las Vegas.

Apart from this, Eldorado Resorts, Inc. secured approval from the West Virginia Lottery Commission in relation to its pending acquisition of Isle of Capri Casinos, Inc. .

Also, MGM Resorts International (MGM Quick QuoteMGM - Free Report) raised the curtain from its newest live entertainment venue on the Las Vegas Strip – Park Theater at Monte Carlo Resort and Casino.

Recap of the Week’s Most Important Stories  

1.    Legalization of gambling in Japan can possibly translate into huge profits and cash flows for casino players. This rings in good news for ace operators like MGM Resorts, Las Vegas Sands Corp. (LVS Quick QuoteLVS - Free Report) and Wynn Resorts, who have been eyeing the Japanese market.

Notably, Japan is one of the largest untapped markets in the world. Currently, gambling is illegal in Japan with the exception of bets on boat, bicycle and horse races. Japan has the potential to become the second-largest market in Asia for gambling after Macau owing to its proximity to China.

Japanese Prime Minister Shinzo Abe aims to legalize gambling in the country before 2020 as part of a plan to boost tourism before Tokyo Olympics. Casinos in the country will stimulate tourism and boost the country's economy. According to CLSA Ltd, a Hong Kong-based brokerage firm, Japan's gambling resort market will generate about $40.0 billion a year from 2025 onward.

2.    Crown Resorts’ recently announced that it has entered into a bilateral agreement with Melco International to vend 13.4% of its stake in Melco Crown, bringing down its investment to 14%. Crown Resorts plans to sell 66 million Melco Crown American Depository Shares (ADS) for $18 per share, totaling $1.19 billion.

Following this, Crown Resorts stated that it would further reduce its stake in Melco Crown as it has entered into an underwriting agreement to sell 40.9 million shares in Melco Crown – around 2.8% of the latter’s outstanding stock – to institutional investors.

Notably, Crown Resorts is poised to receive total proceeds of $1.4 billion (AUD1.9 billion), taking in account the impact of both transactions.

3.    The Wynn Las Vegas hotel plans to install Echo in all 4,748 guest rooms this month, allowing visitors to control environmental conditions with vocal commands. The Alexa technology will let guests remotely control room lights, room temperature, drapery and the television (read more: Amazon Echo to Control Every Wynn Las Vegas Room).

Meanwhile, Wynn Resorts has signed an agreement to form a joint venture with Crown Acquisitions to own and operate the premier luxury retail space at Wynn Las Vegas. Per the agreement and subject to certain customary closing conditions, Crown Acquisitions will shell out $472 million in total proceeds in two installments. Wynn Resorts currently carries a Zacks Rank #3 (Hold).

4.    In Sep 2016, Eldorado Resorts reached an agreement to buy regional gaming operator Isle of Capri Casinos. The total value of the deal between Eldorado and Isle of Capri stands at $1.7 billion, including the latter’s long-term debt of $929 million. Recently, Eldorado Resorts received approval from the West Virginia Lottery Commission for its pending acquisition, marking its first regulatory approval.

Notably, both companies are in the procedure of acquiring all obligatory approvals for the planned transaction, which is expected to close in the second quarter of 2017. Upon completion, Isle of Capri shareholders will own about 38% of the combined entity’s outstanding shares. Meanwhile, the combination of Eldorado and Isle of Capri is likely to create a regional player with 20 casino-resorts across 10 states.

5.    MGM Resorts recently unveiled its newest live entertainment venue on the Las Vegas Strip, Park Theater at Monte Carlo Resort and Casino. Notably, the opening of Park Theater marks the first step in the reimagination of Monte Carlo. The renovation – to take place over the next two years – includes two distinctive hotel experiences, the launch of a new luxury hotel named Park MGM and a Las Vegas adaptation of Sydell Group's renowned NoMad Hotel.

Park Theater is poised to play a major role in MGM Resorts' strategy of further developing the entertainment landscape in Las Vegas by providing exposure to some of the most eminent artists and athletes. MGM Resorts sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Price Performance

The following table shows the price movement of the major gambling stocks over the past week and the last six months:

Over the last five trading sessions, share price movement of the major gambling stocks witnessed a mixed trend. While Las Vegas Sands gained the maximum at 1.6% followed by Wynn Resorts’ rise of 0.4%, Melco Crown recorded a decline of 4.1%.

However, over the last six months, the price performance of gambling stocks was mostly positive. Among the stocks that appreciated the most were Las Vegas Sands and Melco Crown, which witnessed an increase of nearly 21.4% and 20.2%, respectively.

What’s Next in the Gambling Space?

We note that gambling stocks have oscillated between gains and losses in recent sessions. Investors can expect this volatility to continue in the coming days.

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