In This Article:
The trade war between Beijing and Washington continues to hurt gambling stocks. Moreover, the flagging China property price has adversely impacted the high-end VIP segment. Consequently, the industry underperformed the S&P 500 for the second straight week. The industry has declined 1.9% compared with the S&P 500’s 0.5% decrease.
Recap of Last Week’s Most Important Stories
Wynn Resorts Ends Massachusetts Casino Sale Talks With MGM
Wynn Resorts, Limited WYNN has decided to end talks regarding the sale of $2.6-billion Encore Boston Harbor to MGM Resorts International MGM. Last week, the companies had announced that the discussion was in the preliminary stage.
Notably, Wynn Resorts, which received its Massachusetts license in 2013 for the construction of 671-room Encore Boston Harbor in Everett, MA, is likely to open the property this June. It expects to have 8 million visitors every year at the casino that will have 242 table games as well as 3,158 classic and state-of-the-art slot machines.
However, MGM Resorts, which already operates a casino in Springfield, is not allowed to operate two casinos in the same state. Per Massachusetts law, a company can have only one casino license in the state.
Both Wynn Resorts and MGM Resorts carry a Zacks Rank #3 (Hold), currently.
Penn National Completes Greektown Casino-Hotel Acquisition
Penn National Gaming, Inc. PENN, which has entered into definitive agreement with JACK Entertainment, LLC, to purchase the operations of Greektown Casino-Hotel in Detroit, MI, has completed the acquisition. The value of the deal was approximately $300 million.
Following the deal’s closure, Penn National entered into a triple net lease agreement with VICI Properties Inc. VICI for the Greektown facility. Per the lease agreement, Penn National will pay roughly $55.6 million as annual fee for an initial term of 15 years. The company also has an option to renew the lease agreement for five more years.
At present, Penn National carries a Zacks Rank #3.
International Game Technology PLC Lags Q1 Earnings & Revenues
International Game Technology PLC IGT reported first-quarter 2019 results, wherein both earnings and revenues missed the Zacks Consensus Estimate. The company reported adjusted earnings per share of 12 cents, missing the Zacks Consensus Estimate of 12 cents. Moreover, earnings declined 20% year over year.
Revenues totaled $1,145 million, lower than the consensus estimate of $1,167 million and also declined 5% year over year. This downside resulted from the dismal service revenues and product sales.