Last week, most of the stocks in the gambling industry finished in the green despite the recent market volatility. The industry has increased 2.5% compared with the S&P 500 index’s 1.3% gain in the same period. Also, the industry has been performing impressively in the past six months. With Q1 earnings season in the nascent stage investor will be closely monitoring the performances of the companies.
On the news front, reports emerged that MGM Resorts International (MGM - Free Report) might buy Wynn Resorts, Ltd’s (WYNN - Free Report) Boston Harbor resort. Meanwhile, Penn National Gaming, Inc. (PENN - Free Report) was given a green signal by The Illinois Gaming Board for the pending buyout of Pinnacle Entertainment, Inc.
Recap of the Week’s Most Important Stories
MGM Resorts Mulling Over the Wynn Resorts Acquisition
In the beginning of the week, the news of MGM Resorts International acquiring Wynn Resorts, Limited hit the headlines. According to New York Post, the company has also approached Wynn Resorts through back-channel process. There is a 50% possibility that the deal might fall in place in the coming few months, per sources. In February, James Murren — MGM Resorts’ CEO — had declared that the company does not intend to acquire Wynn Resorts.
However, per recent news, MGM Resorts is eyeing to buy Wynn Boston Harbor Resort Casino in Everett, Massachusetts, the construction of which is still underway. Notably, Wynn Resorts has become the target of acquisition, following the resignation of Steve Wynn, the CEO and founder of Wynn Resorts. In February, this casino tycoon had to step down after several women complained that they were harassed or assailed by Wynn. Massachusetts regulators are scrutinizing the allegation on Wynn.
Wynn Resorts carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Penn National & Pinnacle Entertainment Deal Get Illinois Gaming Board Approval
Penn National Gaming has received go-ahead signal from The Illinois Gaming Board for the acquisition of Pinnacle Entertainment (PNK - Free Report) . The deal is likely to be sealed in the second half of 2018. However, the company is still requires additional regulatory approval.
In the previous months, the company received approval for the deal from the Pennsylvania Gaming Control Board as well as the West Virginia Lottery Commission. It is expected to yield $100 million in annual run-rate cost savings within two years of closing.
Caesars Entertainment Teams Up With Buena Vista Gaming Authority
In an effort to bring Harrah's-branded facility to Northern California, Caesars Entertainment Corp. (CZR - Free Report) has entered into partnership with the Buena Vista Gaming Authority.
According to president and CEO of Caesars Entertainment, Mark Frissora, “This agreement with the Buena Vista Gaming Authority advances our growth strategy to expand the reach of our brands into new markets and reinforces our over 20-year history working with tribal partners.”
The following table shows the price movement of the major gambling stocks in the past week and the last six months:
In the last five trading sessions, share price movement of most of the major gambling stocks witnessed a positive trend. Shares of Caesars Entertainment, Melco Resorts (MLCO - Free Report) and Las Vegas Sands have rallied significantly in the same time frame.
Also, key sector participants like Pinnacle Entertainment, Wynn Resorts Melco Resorts and Boyd Gaming (BYD - Free Report) were the major gainers in the past six months.
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