Global gaming giants see stocks plummet as casino closures rock industry - IAG

Thursday 19th March 2020

Gaming companies around the world have felt the full force of the global economic crisis taking shape as a result of the coronavirus, with gaming stocks plummeting to historic lows.

With stock markets in freefall, the short-term outlook for everyone from casino operators to industry suppliers and the world's biggest cruise ship lines is bleak with economists describing the current situation as the fastest descent into a bear market in history.

The news was no different for Macau's operators on Thursday as their share prices continued their recent slide.

Galaxy Entertainment Group closed at HK$38.60 on Thursday, down 38% from its recent high of HK$62.20 on 12 January 2020 and 20% from HK$48.15 just over a week ago.

Sands China fell to HK26.15 last night from HK$32.45 a week ago and HK$45.00 on 17 January, while Wynn Macau reached HK$10.32, having already hit a three-year low of HK14.04 earlier this month.

Likewise, MGM China fell further to HK$7.64 from HK$8.81 on 10 March which, as reported by Inside Asian Gaming, was already its lowest since 28 February 2016 and 62% down on its all-time high of HK$24.30 achieved on 14 January 2018.

SJM Holdings fell to HK$6.10 from a recent high of HK$10.50 on 12 January 2020, while Melco Resorts & Entertainment hit US$12.82, down 49% on its price of US$25.13 from 2 January 2020.

Some suppliers have suffered even bigger hits, none more so than Scientific Games Corp. From a high of US$30.24 on 12 February, Scientific Games shares have plummeted an incredible 84.4% to US$4.71 on news that all 440 casinos in the state of Nevada and hundreds of others across the United States have shut their doors for a month.

International Game Technology had fallen to US$4.12 when the New York Stock Exchange closed Thursday from US$14.73 on 18 February, while Australian slot machine giant Aristocrat was at AU$18.00 on the ASX, down from AU$37.69 on 20 February

And the cruise line industry is facing its own crisis as the world's travel and tourism industries shut down completely.

Norwegian Cruise Line Holdings saw its share price hit US$8.23 overnight, down 86.2% from US$59.65 on 17 January, Royal Caribbean Cruises Ltd fell to US$22.41 from US$134.65 on 2 January and Carnival Corporation to US$10.00 down from US$51.90 on 17 January.

The economic crisis sweeping the industry saw Bill Miller, President and CEO of the American Gaming Association, issue a sharp statement Friday morning in which he called on the US government to act quickly in helping the hospitality industry.

"The impact on our employees, their families, and communities is staggering, and the implications extend far beyond the casino floor," he said.

"Leading technology companies that supply the industry, and the nearly 350,000 small business employees that rely on gaming for their livelihood, are also feeling the devastating blow of this unprecedented public health crisis.

"The federal government must act swiftly and comprehensively to get America's hospitality employees, and the small businesses that support them, back to work. Gaming employees, their families, and communities are bearing the brunt of this economic standstill and will continue to suffer if Congress and the administration don't take immediate action.

"In total, these mass closures will rob the US economy of US$43.5 billion in economic activity if American casinos remain closed for the next eight weeks.

"Gaming is an economic engine, employing millions of local residents, generating community investment through vital tax revenue, and supporting small businesses in communities all across the country."

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