Casino stocks take off on PASPA repeal
After the Supreme Court struck down the Professional and Amateur Sports Protection Act of 1992 (PASPA), shares in casino operations across the country began to rise. The increases come as investors predict stronger buys for casino stocks due to the individual states now having the legal ability to offer sports gambling operations.
Both Caesars Entertainment and MGM Resorts saw their stock prices increase by 5.5% and 1.67%, respectively. Boyd Gaming's shares climbed 3%, while shares in Penn National jumped by 4.6% Scientific Gaming saw the most movement as its prices went from $53.15 to $59.39, an increase of 11.7%
The repeal of PASPA is going to bring a whole new set of players to the field, all intent on competing with Vegas sportsbooks. William Hornbuckle, president of MGM Resorts, explained, "In the next two years to three years, there are 10 to 12 states that are ripe and ready to activate. We will be there. We will participate in it.” MGM is already making preparations to build a $6-million sportsbook in Atlantic City at its Borgata casino.
Two prominent casino companies didn't see any major movement as a result of the death of PASPA. Shares of Vegas-based Wynn Resorts and Las Vegas Sands remained relatively unchanged.
Despite the lack of enthusiasm on the part of Vegas investors, many feel that the expansion of sports gambling across the country will help the Vegas industry. MGM's CEO, Jim Murren, stated, “[Casino expansion across the US] has actually benefited MGM in Las Vegas because people want to go to the market leader. Las Vegas is the undisputed leader. I think the same will happen with sports betting.”