The COVID-19 outbreak has spurred on North American governments to take radical action to stem the tide of infections. Major cities like Los Angeles, New York, and San Francisco have announced the forced closing of restaurants and bars. The spread is also forcing temporary closures of U.S. casinos.
Gaming industry leaders have called on the federal government to explore a potential bail out.
Wynn Resorts (NASDAQ:WYNN) stock had plunged 57% month-over-month as of mid-afternoon trading on March 17. Shares have plummeted to lows not seen since 2015/2016. MGM Resorts (NYSE:MGM) stock had declined 67% over the past month. It has also reached a 52-week low. Las Vegas Sands (NYSE:LVS) had also dropped 40% month-over-month at the time of this writing. These companies are facing unprecedented conditions with public gatherings on hold.
Reports indicate that a $1.2-trillion stimulus package is on the way in the United States to combat this crisis. President Trump revealed that $58 billion of that package will be earmarked for the airline industry. It is unclear if a bailout for casinos is forthcoming.
Investors should be extremely wary of this industry in the near term. The onset of legal sports betting will provide no relief for gaming companies with major sports leagues all shut down until further notice.
Casinos will face an unprecedented crisis with no consumer traffic in their facilities for weeks to come.
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