Sin stocks, especially the gaming ones, have markedly outperformed the broader market lately. As illustrated in the chart below, stocks of industries biggest companies like Las Vegas Resort (LVS), Wynn Resorts (WYNN), and Melco Crown Entertainment (MPEL) have grown 17-, 8- and 7-fold in the last five year. However, the gaming industry stocks have dropped in value lately, making them attractive buy candidates. Will the industry continue to grow? Below, I discuss the reasons for further industry growth along with candidates for superior returns.
Why gaming stocks?
1. The house always wins
With the exception of a few cases, the premise holds true as casinos around the world do everything in their capacity to ensure maximum profitability. They influence behavior and control every little experience that customers have on their premises. From the rules regulating the games to the music playing in the background to interior designs to color of the staff uniform, everything is meticulously planned with the sole objective of getting customers to gamble with as much money, for as long as possible. Gambling floors traditionally confuse the concept of time while enticing setups are put together to improve player stamina.
Apart from psychological influences and physical comfort, the house also implements strategies to benefit from games. Therefore, table games or slot machines have a built-in, adjustable “house edge” in all casinos, whereby profits are drawn from each bet. As unfair it may seem, casinos write the very rules that customers have no choice but to abide by. To top that all, even if at the slightest indication of you having an edge over their system, you are likely to be removed and possibly barred for lifetime in most parts of...
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...plans. It pays a dividend yield at 2.7%, compared with 2.4% yield paid by Wynn. It has continuously grown sales for several years now, and is expected to grow sales and per-share earnings by 16.12% and 31.72%, respectively, this year. Nevertheless, with the addition of another resort to its lone property in Macau, Wynn Resorts is likely to see a more meaningful growth in earnings over the short term.
Whether you approve or not, casinos are hear to stay, and tactfully cheat you out of your money. They are the businesses you wished you owned, and these stocks provide you with that opportunity. But not all stocks are the same; therefore you should carefully pick your investments based on valuations and growth opportunities. With governments’ narratives becoming pro-casino with every passing day, the market for casinos is expected to expand manyfold in upcoming year.
Harrah’s numerous properties in the country are considered to be its own operating segment, and thus each establishment is given leeway to make its own decisions and manage its own operations. These properties are grouped into divisions according to their geographical location, which makes it easier for Harrah’s top management to monitor their performance and make adequate responses to the different factors that affect a particular division, seeing that most external factors that greatly affect a casino’s operation usually depends on the location of said facility. For example, there are different laws and regulations regarding gambling for each state, and each location also caters to a particular class or segment of its target market.
The Crown was set up as a multimillion-dollar establishment in order to attract international gamblers especially the Asian junket gamblers. However with the economic meltdown of countries such as Thailand, Indonesia, and Malaysia Asian gamblers are fewer and have less money to gamble. The present focus of Crown casino towards the Asian market is fruitless as its competing in a highly saturated international market. International casinos have a much better operational efficiency compared to Crown due to the high levels of tax and intense monitoring experienced by Australian casinos. Nevertheless this excessive regulation reduces the perception of corruption which can be used to market Crown as a reputable operator in the world stage.
Another tactic of casinos is the lack of windows or clocks. The idea is to have gamblers not look at the outside world and concentrate on what is going on inside the casino. Without clocks, and with alcohol, how can someone who doesn’t have a watch know what time it is?
players can not "count" cards to gain an advantage over the casinos, and with its automatic dealing
Video games have had high demand over the past decade. Many titles such Call Of Duty and Grand Theft Auto make billions of dollars in profits. (1) What began as a small market in the late 1970’s has grown drastically over the years. Technology has improved so much that a Game Boy Advance in the early 2000’s that was worth $150, now fails in comparison to free apps for our phones today. There are emulators for the IPhone that can play the Game Boy Advance games. (2)
Casino gambling is an increasingly popular and legal activity in many states throughout America. “The term gambling or ‘gaming’ as the industry calls it, means any legalized form of wagering or betting conducted in a casino, on a riverboat, on an Indian reservation, or at any other location under the jurisdiction of the United States” (National Gambling Impact Study
Gambling... Who does not like to gamble? People play lotteries, bet on sport games or try their luck on slot machines with a thought to win some amount of money. In fact, this excitement for gambling can be seen even from early ages; for example, ancient Egyptians used to play dice in 2000 BC or the first casinos opened their doors to customers during the Greeco-Roman period ( Whittaker and Cushman 1 ). Nowadays casino industry is a large business in the United States that brings high revenues and offers various entertainment that attracts people from different areas. So just recently residents and visitors of Worcester, Wicomico and surrounding counties got a great opportunity to try themselves in a new Ocean Downs casino that came into operation couple months ago. Ocean Downs casino is an excellent benefit to the community that helps to improve the economic and social status of the county and also serves as a great entertainment for the adult population.
Thought the years, one industry has grown. Even through the hardest times, the video game industry has flourished. As one of the largest video game companies in the world, Square Enix CO., LTD has produced over one hundred games in the early 1980's. When the gaming industry first began, its livelihood was questionable. Square Enix CO., LTD has answered that question with undeniable success. While it began as two separate companies, Square Enix has grown and rightfully taken its place as a leader in the video game market.
The basic system of just about every casino is that of the tables (including Roulette, Blackjack and Craps) filling the center of the room with computerized machines (including slots and video poker) that don’t need much tending to surrounding the area. Also, in many casinos there is a second floor surrounding the perimeter of the building with balconies everywhere so the main floor is still the center of attention. This setup brings the eye of casino patrons, wherever they may be, to the center of the casino. This strategic arrangement plays with the fact of human nature being drawn to the center of the action. Coincidentally, or not, the games in the center of the casinos are always the games where people often spend the most money. By chance if your eye isn’t drawn then perhaps the shrill of people winning will bring your attention. Don’t be fooled though, house advantage is always higher than...
These days the casinos have their own internal methods for determining who their most attractive customers are, casinos are using various methods such as loyalty cards, cameras watching players faces, or even ATM withdrawals to track how much someone is playing and if they will be profitable to the business. All this information allows the casino to specifically target their most reliable spenders and then lure them back with perks. This continues to build the players addiction and fakes them into believing that their gambling is paying off. (Rosengren, 2016) This really works in the casinos benefit because it all looks so good that people are repeatedly drawn in, and then eventually cannot stop. Acording to Rosengren (2016), another method is:
Gambling in the industry is fast-growing, multi-million industry in the United States. Gambling could also be traced back to the “Wild, Wild, West.” Gambling is not uncommon at root of many saloon gunfights...
Gambling has been a part of America since the beginning, but the problems caused can go unnoticed. Four to five percent of American teenagers, ages twelve to seventeen, have a gambling problem, and an additional ten to fourteen percent are at risk for obtaining an addiction (ncpgambling.org). Gambling is starting to get out of control in America. Americans are spending too much time and money on a silly game they most likely will not win. Casinos make their money from the losses of Americans and stay open that way. Casinos milk money from people in exchange for a couple of gaming chips. Although many Americans support legalized gambling, others believe it should be illegal because it promotes terrible addictions, increases illegal action, and
The Gambling industry attempts to win support with misleading information in its promotions. For example, gambling is said to help stimulate the economy by providing more jobs. According to the American Gaming Association study, "In 1995, the casino industry recorded $25 billion . . . and paid only $7 billion in wages" (Arthur Anderson). Also according to Maura J. Casey, there is high unemployment rates around casinos. (Casey 37) With people's losses and by encouraging workers to believe in cheating customers, casinos focus on gaining more and more money for their n...
Gambling is a big controversy that concerns about whether or not states should allow it. The pro argument generally suggests that casinos help boost the economy. However, the other side of the argument believes that casinos lead to gambling addiction. During the early twentieth century, gambling was prohibited in the states. Nevada was the first state to legalize gambling in 1931. Forty-seven years later, people approved the construction of casinos in Atlantic City and New Jersey became the second state to legalize gambling. To this day, Hawaii and Utah are currently the only states where gambling is not legal. Since the early 1900’s, casinos have rapidly increased from suburbs to rural areas all over the country (Schwartz 1).
Gambling is described as the betting of money or property on the result of an event or game that is mainly random with the desire to win more money or gain additional property. The industry or sector created by the activity of legal gambling is referred to as gaming. Since inception, gambling and gaming has continued to develop to an extent that it worth more than $335 billion across the globe. Most of the revenues obtained in this industry are generated by casinos and lotteries. In the past few years, gambling and gaming have attracted significant concern and controversy, especially with regards to the morality of the practice and whether its financial benefits outweigh the damage. While proponents of gambling