Casinos throughout the United States are starting to reopen as the coronavirus pandemic begins to wind down, but all casinos are reopening with many restrictions in place. The gaming industry has been hit extremely hard by the pandemic, but the industry will begin to recover a bit in the coming months.
Fitch Ratings is one of the world’s biggest credit rating agencies, and they predict a grim future for the gaming industry. Fitch Ratings predicts that it will take several years for the gaming industry to recover from the pandemic fully.
Not only has the gaming industry been hit hard by COVID-19, but it has hurt states all across the country financially. Casinos and sportsbooks provide tax revenue to states, and states were unable to receive any funds while they were shut down.
Several leading analysts at Fitch claim that the gaming industry will see a U-shaped recovery process. The gaming industry is expected to see major losses in revenue in 2020, but they will start making a profit again in 2021. A full recovery is not expected until 2023, and that is assuming that there isn’t a resurgence in the coronavirus in the next few years.
The official review was conducted over four weeks when the threat of the coronavirus was at the highest. Casinos have seen their credit scores and rating significantly drop during the pandemic, and it will be years before they can rebound.
While other industry and financial experts have predicted a significant loss for the gaming industry, Fitch was able to put a number to it. Fitch Ratings predicts that regional gaming companies will see a 30 percent drop in revenue. That loss in revenue increases to close to 45 percent for casinos on The Strip in Las Vegas.
Stock Prices Also Hit Hard
The gaming industry was thriving before the coronavirus pandemic hit, and that saw an increase in the value of stock prices. The pandemic has hit these companies hard, and most major companies have seen drastic changes in their stock prices.
MGM Resorts International was trading at $31.06 per share before the pandemic, but prices have dropped to just $18.66 this week. Sands was valued at $65.31 back in January, but the latest prices show stocks at just $49.32.
Wynn Resorts was trading at a price of $126.16 before the pandemic struck, but their prices have dropped down to just $91.26. These prices have started to rebound in recent weeks, but they are way lower than they were earlier in 2020.
Penn National Gaming is one of the only gaming companies to see its stock prices increase during the pandemic. Penn was trading at $29.83 before March, and the price rose to $30.04 this week. Penn National Gaming acquired Barstool Sports a few months ago, which is the biggest reason for the increase.
Las Vegas Strip Reopening Slowly
A big reason that casinos on the Las Vegas Strip will see a bigger decrease in revenue is due to the clientele that makes up the customer base. Most customers in Las Vegas travel to the city from other parts of the country, and travel has been slowed down by the pandemic.
Las Vegas has also lost several big events over the past few months, which took away millions of dollars in revenue. There is a chance that Vegas will begin to start hosting some of these events, but the city can’t make up for the lost money.