A Brief History of Publicly Traded Casinos
Once people realised that gambling houses could be financially lucrative, it generated fresh opportunities for publicly traded casinos.
The city fathers of Venice, Italy, established the first casino in 1638, giving it the name of Il Ridotto, which means a “private room”. Patrons were able to gamble there during the carnival season, and the casino controlled all the games of luck played in the city. However, by the 1700s, the location had closed since the Venetian government felt that the casino was causing poverty in the city. Today, most casinos are located on large resort properties, cruise ships, or fancy restaurants since the proximity to luxury facilities increases the probability that the patrons will stop by.
Publicly Trading Casinos
The casino industry is in a state of dynamic change. This is mainly due to the presence of several untapped markets within the industry. The technological changes over the years have also made it easier for people to invest. For instance, virtual reality makes gambling online more enjoyable, while this feature alone could make virtual casinos more profitable.
Land-based casinos are also reaping the benefits from technological advancements and new ways of doing business. Ultimately, all of this makes casinos more appealing to investors. While many casinos have been initially privately owned, public trading has had its benefits.
During the last decade, public trading has become more common within the casino industry. This helped enhance the reputation of many casinos and allowed them to add amenities to their property portfolios. When gamblers have a top-notch gambling experience, they are likelier to keep coming back.
Profitable Casino Stocks
Several casino stocks are currently popular and generate reasonable profit in revenue and stocks:
The Boyd Group
Sam Boyd, the company’s founder, arrived in Las Vegas in 1941, with US$30 in his pocket. He managed to get a job as a casino dealer and began saving. Once he had US$10,000, he opened his first casino. Boyd also had an idea to start advertising his casinos in Hawaii, reasoning that Sin City was also a great vacation destination.
To this day, The Boyd Group still operates various casinos in Vegas. The price/earnings for the stock trade currently stands at 14 in terms of ratio. This is significantly lower than the price/earnings of the entire market, making the company a value stock. Boyd properties in Las Vegas include The Orleans, The Gold Coast, The California, The Suncoast, Main Street Station, and Sam’s Town.
Las Vegas Sands
Sheldon Adelson owns Las Vegas Sands and its two resorts on the Strip, the Palazzo and the Venetian. Las Vegas Sands pays a dividend of 4,75 per cent. The company also has a price/earnings ratio of 24, with insider transactions at zero. Las Vegas Sands is also on the Gabelli Funds, and Stifel Financial Corp. buy lists. Las Vegas Sands also has additional properties in Macao and Singapore, with the remodelling of the Macao location costing the company over a billion dollars.
In 1989, Steve and Elaine Wynn built the Mirage, which became one of the most elaborate resorts on the Strip. The Wynns later sold off the Mirage to MGM. In 1998, Wynn built a larger resort, the Bellagio. He then developed the Wynn Resort and later added the Encore, which is next door. Wynn Resorts have a price/earnings ratio of 54. If the company continues to exceed earning expectations, Wynn Resort stocks could potentially be higher than similar stocks. The company has, at one stage, even exceeded the dividend yields of the Federal Reserve overnight rate.
Caesars Entertainment Corp.
In 2017, Caesars Entertainment traded at nine and moved to 13 within a few months. The 40 per cent increase in such a short time was impressive. However, the casino company was coming out of bankruptcy at the time. Some investors might consider this as being volatile. The casino company has a negative book value and no dividend. Caesars Entertainment owns the following assets in Las Vegas: Bally’s, Paris Las Vegas, Harrah’s, The Rio, and The Flamingo, as well as a few locations outside of Vegas.