2020 was an unmitigated disaster for most businesses around the world. This year is seeing some companies starting to return to normality, while others have crashed and shut their doors for good.
Covid is still causing concerns for businesses and investors, and in August this year share prices slumped once again. European financial markets saw share prices dropping sharply due to fears of Covid support packages being reduced.
However, some businesses managed very well, and even prospered, during the pandemic. While most retailers struggled with land-based establishments, online suppliers did very well. Food retailers found themselves with empty shelves due to panic buying, and delivery services also found themselves inundated.
If you are looking for stocks on the rise, and the ones to buy right now, you might want to look at some of the firms that are coming out of the pandemic strongly. Then again, Deliveroo was inundated with orders last year and yet their London IPO turned out to be abysmal.
So, is there a business that did well during the pandemic that might be worth looking at now?
Which businesses did well during the pandemic?
The vast majority of companies that fared well during 2020 operated online. This is very clear when you look at the rise in subscriptions to streaming services such as Disney Plus and HBO Max. Netflix increased its subscriber base by 16 million in the first couple of months that the pandemic was announced.
Online gaming increased, Amazon’s sales jumped, and even guitar sales increased, from online retailers that are.
Another area that fared well was the casino industry. The traditional land-based establishments faced the same problems as restaurants, cinemas, and other entertainment venues. However, many big-name casinos also have an online presence, and many more online casinos exist that don’t even have land-based gaming rooms.
Why did online casinos do so well?
As you can see above, it was generally online businesses that fared well and bucked the trend during Covid. People sought out online solutions for everyday needs, and this included entertainment too.
If someone wanted to play poker, blackjack, slots, or online roulette, they could simply search for an app or casino website. This accessibility through mobile devices and WiFi meant that millions of new players turned to casino games.
What might be interesting to know is that many of the people playing in online casinos last year were first-time players. Not everyone was searching for ways to keep playing after their local casino or bookmaker had closed, some were searching for new forms of escapism and entertainment.
Online casinos became more popular last year due to convenience, ease of use, accessibility, and perhaps from financial incentives and bonuses.
How much is the global online gambling business worth?
The online gambling market has been growing year on year but 2020 saw a sudden increase in revenue. 2021 is also expected to continue in this trend as land-based casinos operate at restricted capacity in some regions
Some players are unwilling to return to busy casinos while the threat of Covid lingers. Others, perhaps the newer plays enticed by online games, don’t have any intention of ever visiting a casino.
The online gambling market was worth around $53 billion during 2019. This figure rose to around $66 billion last year and is estimated to tip over $72 billion during 2021.
How are traditional casinos faring?
As Las Vegas reopened, and travel restrictions were lifted, many people returned to their beloved casinos.
While footfall is likely to remain less than pre-Covid, there are signs that some gambling destinations are returning to normal. In May this year, casinos reported gaming wins of $1.2 billion in Las Vegas.
This figure trumped the previous record for wins in a single month from nearly 14 years ago.
When looking for the best casino stocks to invest in, it will be worth considering which ones encompass both traditional venues alongside an online presence.
Is it true that China could cause the casino industry some problems?
China is a potentially massive market for the casino and gambling industry. Unfortunately, gambling, as a whole, is completely illegal there.
State-run lotteries are the only legal form of gambling in mainland China, and authorities regularly clamp down on suspicious activity. China’s most famous game, Mahjong, was the subject of a police crackdown during 2019. Mahjong parlors were suspected of being used by players to gamble and many were closed down.
Online gambling is also illegal, along with casinos. Normally this wouldn’t affect the casino industry, but China is starting to take a good look at Macau.
What is happening with Macau now?
Many casino share prices rose during August as news that China was lifting travel restrictions to Macau.
Macau has been the biggest gambling market in the world for a decade, and many famous casino names have a presence there. When China announced certain restrictions surrounding Covid and travel were being lifted, casino stocks started to perform well.
MGM, Wynn Resorts, and Las Vegas Sands, all have resorts in Macau and saw their stocks perform well after the announcement. Other casino stocks also rose including Penn National, Boyd Gaming, and Caesars Entertainment.
This was all good news for existing and prospective investors at first. But then it wasn’t.
An announcement that China is seeking to change the gambling laws in Macau has seen the valuations of companies such as MGM China and Wynn Macau tumble.
Could sports betting be the key to casinos’ success?
Back in May 2018, the Supreme Court decided the laws surrounding sports betting in the US were out of date. This opened up the chance for states to vote for themselves whether or not to legalize sports betting.
Of course, Nevada has nearly always allowed sports betting, but it is possible elsewhere. As CBS Sports reports, legal sports wagering is being opened up across the states.
While land-based sites to place sports bets are limited in many states, this change in the law opens up the possibility of more legal online sports bets being placed.
Casinos online don’t just offer traditional games such as poker and slots, they also take sports bets. Online gambling was illegal in much of the US in the past, but now things are changing.
As it stands, the majority of US states have legalized sports gambling. Many of the others have introduced legislation to do so. It is completely legal now for players in Arizona, Colorado, and other states to place a wager at LV BET or another gambling site.
Some states will no doubt hold out though, Idaho and Hawaii being two.
Should you invest in casinos?
Millions of new players are paying cash to play online right now, while traditional casinos are still looking to return to some type of normality. When you are considering whether to invest in casino stocks, perhaps one that has a heavy online presence is the best choice.
Summary
Investment is always a risk, just as playing roulette in a casino is. However, when looking to invest in casino shares you can review the revenues and check performances.
Historically, the house always wins, so it would be an unwise man who bets against casinos bouncing back. China’s stance with Macau may be telling for some companies including MGM, but the online gaming industry matters too.
The continuing increases in online casino revenues mean that this may be an area worth investing in, especially as technology such as crypto starts to be adopted.
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