Scary Sell-Off For Casino Investors

Betting on the house got investors crushed on Tuesday.

Wynn Resorts (WYNN) made an adjusted $34.2 million in the third quarter or 33 cents a share. That’s more than double the average 15-cent EPS estimate of analysts. Still, shares are selling off by -10% today, as investors pay more attention to continued weakness in gambling.

According to the Associated Press, Wynn saw improvements in room, food and beverage, and entertainment and retail during Q3, but gaming revenue slipped as would-be players eyed spending.

As a whole, the Casino Stocks Index is off by over -4% today. The Index has now underperformed the S&P 500 by -15% over the last month.

Boyd Gaming (BYD) is off by over -12% today after reporting adjusted profit of 9 cents a share, missing estimates by a penny. CEO Keith Smith said, “While visitation levels remained fairly constant, spend per visitor continues to be down significantly year-over-year, as consumers are still being cautious with their spending,” as quoted by the AP.

The negativity surrounding weak gambling revenues is weighing on other major casino operators today. Las Vegas Sands (LVS) and MGM Mirage (MGM) are both off by more than -8%. MGM will report its quarterly performance on November 5.

Pinnacle Entertainment (PNK) is also selling off ahead of its October 29 earnings report. Investors will be placing their final bets on the casino operator during tomorrow’s session.

Over the last month, MGM, Melco Crown Entertainment (MPEL), and Monarch Casino & Resort (MCRI) are all off by more than -20%. Meanwhile, only Pinnacle and Colorado-based small-cap player Century Casinos (CNTY) are positive for the period.

As of this writing, the Casino Stocks Index is one of the five worst-performing tickerspy Indexes over the last month, down by -13%.

Meanwhile, the Gaming and Slot-Machine Stocks Index is positive for the period, despite a -20% daily drop by Scientific Games (SGMS), which is dragging the sector lower today.

Tags: BYD, CNTY, LVS, MCRI, MGM, MPEL, PNK, SGMS, WYNN