Casino stocks have had a strong year. A big rebound in the Macau gaming market and consolidation in the domestic regional market have resulted in some impressive gains the sector this year.
- PENN +128%, PNK +127%, WYNN +95%, ERI +95%, MLCO +84%, BYD +75%, RRR +49%, LVS +31%, MGM +17%
Macau gaming stocks (WYNN, LVS, MLCO and to a lesser extent MGM) benefited from a rebound in gross gaming revenue (GGR) this year. GGR is up 20% year-to-date after falling 3.3% last year and 34% in 2015 following a crackdown on money laundering by government officials in the only region in China where gambling is permitted. This year's growth outperformed expectations which has led to optimism for next year. Macau is transitioning to an entertainment destination (away from gaming), much like Vegas did over the years. December GGR data will be out over the Holiday weekend.
The Vegas market continues to thrive as a entertainment destination -- not as dependent on gaming. MGM has a dominant posting on the Las Vegas Strip. The emergence of professional sports in Sin City may serve as a modest tailwind in the coming years.
While most of Wynn Resorts' revenue and profit comes from Macau, the company is expanding its offerings in Las Vegas and will open a resort casino just outside of Boston in early 2019.
On December 18, Penn National announced plans to acquire regional casino Pinnacle Entertainment for $2.8 billion in cahs and stock.