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Gambling Stock Roundup: Macau February Gaming Revenues, CZR-DraftKings Deal & More
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It was a busy week for the gambling industry marked by the announcement of Macau February gaming revenues, a deal between Caesars Entertainment Corporation (CZR - Free Report) and DraftKings, and Eldorado Resorts, Inc.’s disappointing performance in fourth-quarter 2018. Notably, some of the major companies in the gambling industry suffered due to disappointing gambling revenues from the Macau region in February. However, the metric increased in the same month, following a decline in January.
These apart, Churchill Downs Incorporated’s (CHDN - Free Report) subsidiary Churchill Downs Interactive Gaming hit the headlines with its multi-year agreement with Spin Games.
Recap of the Week’s Most Important Stories
Macau’s Lower-Than-Expected Gambling Revenues
Gambling revenues from Macau increased 4.4% to 25.37 billion patacas ($3.14 billion) in February. The metric lagged analyst expectations but increased 2% from the figure registered in January. Markedly, gambling revenues from the region decreased 5% during January, marking the first decline in more than two-and-a-half years. Slowdown in China and the trade war between Beijing and Washington impacted casino operators in Macau.
Further, speculations over another crackdown on capital outflows by China have kept investors on the edge. Flagging China property price has impacted the high-end VIP segment.
Caesars Entertainment Inks Deal With DraftKings
Caesars Entertainment and DraftKings — a leading sports-tech entertainment brand in the United States — has signed a multi-state agreement. Per the deal, Caesars Entertainment will give DraftKings market access to its online gaming products in certain states where Caesars Entertainment operates casino properties.
Meanwhile, Caesars Entertainment will receive DraftKings’ equity. Also, DraftKings’ will promote Caesars Entertainment brand in certain states. CEO and co-founder of DraftKings, Jason Robins, said that “Partnering with such a world class gaming organization will expedite our national roll-out process and give us the opportunity to work alongside one the largest and most established industry leaders in the world.”
Caesars Entertainment has a Zacks Rank #5 (Strong Sell).
Churchill Downs Signs Agreement With Spin Games
Churchill Downs’ subsidiary, Churchill Downs Interactive Gaming, has entered into a multi-year agreement with Spin Games. Following the deal, Churchill Downs Interactive Gaming can use Spin Games’ gaming content into CDIG’s BetAmerica Sportsbook and Casino website as well as mobile apps. However, the financial terms of the deal have been kept under wraps.
Eldorado Resorts reported fourth-quarter 2018 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. The company reported adjusted earnings of 3 cents per share, which lagged the consensus mark of 37 cents. Meanwhile, the company’s revenues came in at $671.7 million, which fell short of the consensus estimate of $678 million.
Revenues from the West region declined 1.7% to $137.0 million, whereas from the Midwest region the metric dropped nearly 1.9% to $95.8 million. Moreover, the South and Central region witnessed a revenue decline of 5.9% and 0.8% to $119.6 million and $118.6 million, respectively. However, revenues from the East region increased 2.8% to $200.7 million.
Eldorado Resorts has a Zacks Rank #5.
Price Performance
The following table shows the price movement of the major gambling stocks in the past week and the last six months:
In the past five trading sessions, most of the gambling stocks witnessed a decline in share price. Shares of Century Casinos, MGM Resorts International (MGM - Free Report) and Wynn Resorts, Limited (WYNN - Free Report) have lost the most.
Moreover, key sector participants like Penn National Gaming, Inc. (PENN - Free Report) and PlayAGS were the major losers in the last six months.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
Image: Bigstock
Gambling Stock Roundup: Macau February Gaming Revenues, CZR-DraftKings Deal & More
It was a busy week for the gambling industry marked by the announcement of Macau February gaming revenues, a deal between Caesars Entertainment Corporation (CZR - Free Report) and DraftKings, and Eldorado Resorts, Inc.’s disappointing performance in fourth-quarter 2018. Notably, some of the major companies in the gambling industry suffered due to disappointing gambling revenues from the Macau region in February. However, the metric increased in the same month, following a decline in January.
These apart, Churchill Downs Incorporated’s (CHDN - Free Report) subsidiary Churchill Downs Interactive Gaming hit the headlines with its multi-year agreement with Spin Games.
Recap of the Week’s Most Important Stories
Macau’s Lower-Than-Expected Gambling Revenues
Gambling revenues from Macau increased 4.4% to 25.37 billion patacas ($3.14 billion) in February. The metric lagged analyst expectations but increased 2% from the figure registered in January. Markedly, gambling revenues from the region decreased 5% during January, marking the first decline in more than two-and-a-half years. Slowdown in China and the trade war between Beijing and Washington impacted casino operators in Macau.
Further, speculations over another crackdown on capital outflows by China have kept investors on the edge. Flagging China property price has impacted the high-end VIP segment.
Caesars Entertainment Inks Deal With DraftKings
Caesars Entertainment and DraftKings — a leading sports-tech entertainment brand in the United States — has signed a multi-state agreement. Per the deal, Caesars Entertainment will give DraftKings market access to its online gaming products in certain states where Caesars Entertainment operates casino properties.
Meanwhile, Caesars Entertainment will receive DraftKings’ equity. Also, DraftKings’ will promote Caesars Entertainment brand in certain states. CEO and co-founder of DraftKings, Jason Robins, said that “Partnering with such a world class gaming organization will expedite our national roll-out process and give us the opportunity to work alongside one the largest and most established industry leaders in the world.”
Caesars Entertainment has a Zacks Rank #5 (Strong Sell).
Churchill Downs Signs Agreement With Spin Games
Churchill Downs’ subsidiary, Churchill Downs Interactive Gaming, has entered into a multi-year agreement with Spin Games. Following the deal, Churchill Downs Interactive Gaming can use Spin Games’ gaming content into CDIG’s BetAmerica Sportsbook and Casino website as well as mobile apps. However, the financial terms of the deal have been kept under wraps.
Churchill Downs carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Eldorado Resorts Misses on Q4 Earnings & Revenues
Eldorado Resorts reported fourth-quarter 2018 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. The company reported adjusted earnings of 3 cents per share, which lagged the consensus mark of 37 cents. Meanwhile, the company’s revenues came in at $671.7 million, which fell short of the consensus estimate of $678 million.
Revenues from the West region declined 1.7% to $137.0 million, whereas from the Midwest region the metric dropped nearly 1.9% to $95.8 million. Moreover, the South and Central region witnessed a revenue decline of 5.9% and 0.8% to $119.6 million and $118.6 million, respectively. However, revenues from the East region increased 2.8% to $200.7 million.
Eldorado Resorts has a Zacks Rank #5.
Price Performance
The following table shows the price movement of the major gambling stocks in the past week and the last six months:
In the past five trading sessions, most of the gambling stocks witnessed a decline in share price. Shares of Century Casinos, MGM Resorts International (MGM - Free Report) and Wynn Resorts, Limited (WYNN - Free Report) have lost the most.
Moreover, key sector participants like Penn National Gaming, Inc. (PENN - Free Report) and PlayAGS were the major losers in the last six months.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>