Gambling stocks battered as part of global sell-off

Several major indices around the world cratered amid fears of a slowing US economy. Last week’s employment report was much weaker than analysts predicted. Monday’s performance was largely attributed as a reaction to the news, and stocks everywhere felt the pain.

Several companies from around the global gambling industry saw marked declines Monday. Some major operators even saw new 52-week lows during the day. Among these were Las Vegas Sands ($36.62/£28.65/€33.43), Wynn Resorts ($71.63) and MGM Resorts ($33.44).

The day began with the Japanese Nikkei 225 index plummeting 12.4%, its worst day since Black Monday in 1987. In the US, the S&P 500 dropped 3%, its biggest single-day decline since September 2022. The Dow Jones Industrial Average fell by 2.6%, the Nasdaq by 3.4% and the Russell 2000 by 3.3%.

All of the “Magnificent Seven” US stocks–Apple, Meta, Nvidia, Microsoft, Tesla, Alphabet and Amazon–closed sharply lower. According to the Wall Street Journal, their losses alone wiped out more than $650bn in market capitalization.

Other securities also couldn’t escape the wave of uncertainty. Bitcoin was down approximately 7%, gold rates saw intraday declines of more than 2% and commodities faltered as well. The Cboe Volatility Index, colloquially referred to as the “fear index,” rose to its highest levels since the onset of the Covid pandemic.

Operator, supplier stocks see declines

Besides the gambling companies that hit 52-week lows, others suffered. Caesars Entertainment dropped almost 7% but managed to hover just above its 52-week low of $31.74. Regional operators Boyd Gaming decreased 2%, with counterparts Red Rock Resorts and Churchill downs both slipping 3.7%.

On the sports betting side, DraftKings fell just 0.7%, but its last five days have seen total declines of nearly 14%. This is mostly due to missed Q2 earnings and criticism of its announcement of a surcharge for bettors in high-tax states. Its rival Flutter, owners of FanDuel, dropped just over 3% to $181.83.

Suppliers were also impacted, with Light & Wonder falling almost 5%. IGT was down 1.3%, erasing a chunk of the gains generated by its deal to go private with Everi under Apollo Global Management. Inspired Entertainment has fallen over 17% in the last week, 8% of which came Monday.

Frank Fantini, founder of gambling financial specialists Fantini Research, told iGB that stocks could continue to underperform. He said a case “can be made that the overall market is still overvalued,” with big tech stocks as a chief example.

He also posited that “weaker consumers can force a recession. If so, today might be a forewarning.”

Original article: https://igamingbusiness.com/finance/gambling-stocks-hit-by-market-declines/