Casino Stocks and Shares- Is Now a Good Time to Invest?

Posted on April 29th, 2009

stocksWell- if you are a regular visitor to Online Casino King, you obviously enjoy a flutter. But what about having a punt on the stock market, and in particular gambling shares? The whole global financial market has felt like a big casino lately anyway- is it a good time to invest in gaming companies?

Well, that depends on whether we are talking traditional bricks and mortar gaming companies or online gaming companies of course. Online casino and poker sites have been enjoying something of a boom of late, thanks to more and more people having access to fast internet connections, which makes the experience of playing online richer. Companies that are listed on the stock exchange, such as 888 holdings, Playtech and Party Gaming have been advancing steadily since the horrors of the US market (where the Bush administration had been attempting to outlaw online gambling in the country.)

Much of the risks associated with this have been priced in to the shares. The legal environment for these companies seems to be improving day by day with the Obama administration running the show, so now could be a good time to jump in.

And what about land based Casino Stocks and Shares? In Las Vegas and Macau, the big gaming companies have been going crazy on debt to build new gambling palaces. But as the economy continues to deteriorate, business is down, and the banks are calling in debts which has been causing big headaches for casinos and their shareholders.

Gaming revenues in Vegas have slumped (although local casino operators are faring OK). The Trump´s Entertainment Resorts has already filed for Chapter 11.

So be careful- there are a few companies that are worth a look- but the whole area is somewhat of a hornet´s nest.

International Game Technology is a contendor due to the fact that the company doesn´t own any casinos and is thus not in the same debt boat. They supply the slots games.

Wynn has got a big debt pile but it also has casinos in Las Vegas and macau that make the competition go green with envy. I wouldn´t ignore their shares. It has more than $1 billion in cash reserves. MGM looks like one to avoid- they are rumoured to be hiving off assets to pay down their debts.

In summary? We´s say stick with online gaming stocks and possibly take a punt on Wynn (if you like a gamble).

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