Casino operators’ stock prices surge as news fuels hope of vaccine
Nevada-based casino operators’ share prices rocketed Monday after Pfizer Inc. said its coronavirus vaccine is more than 90 percent effective at preventing COVID-19.
Wynn Resorts Ltd. and MGM Resorts International saw the most significant jumps among the state’s six largest public casino operators, with Wynn closing up 27.7 percent and MGM closing up 14.9 percent.
“For the casinos, the vaccine is the thing that will finally make travel and entertainment a part of daily lives once again,” said Amanda Belarmino, an assistant professor at UNLV’s College of Hospitality. “While the day we reopened was exciting, the day we are able to reopen fully due to the availability of the vaccine will (be) the single most exciting day in our history.”
The data from the pharmaceutical company is preliminary and does not mean that the vaccine’s release is imminent, but Pfizer is on track to file an emergency-use application with U.S. regulators later this month.
“It’s huge news for everyone, but for Vegas it’s big because we’re built around crowds,” said gaming consultant Debra Nutton, a former Wynn Resorts executive.
The news caused a rally in the U.S. stock market that included public companies based in Nevada. For instance, Wynn Resorts on Monday saw its highest closing price since June 9.
Late Monday, the FDA approved emergency use of an experimental Eli Lilly antibody treatment to fight mild to moderate COVID-19 cases.
Operators’ share prices have struggled to return to pre-pandemic levels since Nevada casinos were ordered to shut down in mid-March.
Shares of Red Rock Resorts Inc., the parent company of Station Casinos, fell as low as $2.76 after trading as high as $27.91 over the past year. Caesars Entertainment Inc.’s share prices ranged between $6.02 and $74.92 in that time frame.
The impact of Monday’s news on companies’ share prices varied.
Caesars, which operates regional casinos but is also heavily present on the Las Vegas Strip, jumped 10.9 percent on Monday.
Meanwhile, shares of Red Rock and Boyd Gaming Corp., which tend to focus on the off-Strip local market in Southern Nevada, each climbed approximately 3 percent by the end of the day.
“Having a clear path to the Las Vegas Strip activating again and having a path back to normal, or some new version of normal, is clearly terrific for MGM and Caesars,” Jefferies gaming analyst David Katz said.
Las Vegas Sands Corp. shares rose 9.2 percent Monday. The company’s Las Vegas assets are heavily reliant on the convention industry, but the lion’s share of its revenue, nearly 87 percent in 2019, comes from its Asian assets.
Spokespeople for Las Vegas Sands Corp. declined to comment Monday. Spokespeople for Caesars, Boyd, Red Rock, Wynn and MGM did not immediately respond to a request for comment.
Even with positive news on a vaccine, it’s still unclear when Las Vegas’ casino industry will recover.
Katz said that question likely won’t have an answer for another six months, but he believes that when a sense of normalcy does return, pent-up demand “is going to show up big.”
“When there’s a concert or event or football game in the stadium fans can attend … people are going to show up huge,” he said.
The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson.
Contact Bailey Schulz at bschulz@reviewjournal.com. Follow @bailey_schulz on Twitter.