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Gambling Stock Roundup: WYNN Settles Lawsuit, LVS Will Sell Casino, CNTY Q4 Results Dismal

Zacks

The past week has been quite impressive for the gambling industry, with robust share price performances. In fact with the curtains down on the Q4 earnings season, one can easily conclude that the overall picture has been indeed overwhelming with most stocks bidding adieu to 2017 on an impressive note.

Adding to this optimism, Las Vegas Sands announced that it will sell its Pennsylvania Casino to enhance liquidity as the company pursues new development opportunities and returns capital to shareholders.

On the flip side, Century Casinos reported dismal numbers last week while Wynn Resorts agreed to pay $2.6 billion for settling a lawsuit.

Gaming Industry 5YR % Return


Recap of the Week’s Most Important Stories

Legal Dispute Settlement by Wynn Resorts

Wynn Resorts, Ltd. WYNN agreed to pay $2.6 billion to settle a lawsuit with Japan’s Universal Entertainment Corp., and its subsidiary — Aruze USA Inc.

Notably, the legal battle dates back to 2012 when WYNN forcibly redeemed Universal's founder Kazuo Okada 20% stake in the company and issued a $1.94 billion promissory note. The settlement amount adds $464 million to original note, which is payable by Mar 31.

On Friday, Wynn declared that Deutsche Bank has approved a loan of $800 million, which it wishes to use in repaying the note.

Wynn Resorts carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sale of Pennsylvania Casino by Las Vegas

Las Vegas Sands Corp. LVS will sell its Bethlehem, Pennsylvania Casino to Wind Creek Hospitality, an affiliate of the Poarch Band of Creek Indians of Alabama for $1.3 billion.

The sale comes after MGM resorts dropped its plan to acquire the casino last year after performing a due diligence on the property.

Although, this Zacks Rank #2 company did not reveal its plan with the proceeds but the sale certainly frees up cash to deploy in more lucrative international destinations.

Century Casinos Misses on Earnings

Century Casinos, Inc. CNTY reported lower-than-expected fourth quarter 2017 results. Adjusted earnings of a penny missed the Zacks Consensus Estimate by 83% and were down 83% year over year.

The Tax Cuts and Jobs Act (the "Tax Act"), enacted on Dec 22, 2017, led to a rise in the company’s income tax expenses by $5.4 million in the quarter that adversely impacted its bottom line performance.

Net operating revenues of $39 million missed the consensus mark by $1 million but were up 8% year over year. Meanwhile, the company’s largest project to date —Century Mile racetrack and casino development in Edmonton, Canada — is on track and is expected to start operations in early 2019. Century Casinos carries a Zacks Rank #3 (Hold).

Price Performance

The following table shows the price movement of the major gambling stocks in the past week and the last six months:

Company

Last Week

Last 6 Months

WYNN

14.4%

29.9%

CNTY

2.8%

29.7%

MLCO

8.0%

25.2%

MCRI

4.9%

48.8%

PENN

6.7%

26.7%

BYD

0.3%

34.2%

PNK

3.0%

63.0%

LVS

6.8%

18.7%

In the last five trading sessions, share price movement of most of the major gambling stocks witnessed a positive trend. WYNN Resorts, Melco Resorts MLCO and Las Vegas Sands gained significantly in the same time frame.

Similarly, price performances of most of the major gambling stocks were positive in the last six months. Markedly, Pinnacle Entertainment PNK, Monarch Casino & Resort MCRI and Boyd Gaming BYD were the major gainers.

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