Wynn Resorts, Limited (NASDAQ:WYNN)‘s stock has been struggling, although the main reason of its 27% drop in the last five years comes mainly on the back of its exposure to the struggling Macau business. The company is currently expanding in the region and plans to open a new resort there, which will give it a revenue boost if the region recovers, since it will add one to just two resorts Wynn Resorts, Limited (NASDAQ:WYNN) currently operates in Macau and Las Vegas. Overall, 30 funds from our database were long Wynn Resorts, Limited (NASDAQ:WYNN) at the end of 2015, with Mason Hawkins’ Southeastern Asset Management ranking at the top with 12.58 million shares.
In Penn National Gaming, Inc (NASDAQ:PENN), 29 funds among those we track reported long positions heading into 2016, including Dmitry Balyasny’s Balyasny Asset Management and Israel Englander’s Millennium Management. Penn National Gaming has also adopted some initiatives to take advantage of the growth of online gaming and launched a subsidiary, Penn Interactive Ventures, which however is currently doesn’t have any impact on its operations. The company sees potential in the online casino space and sees it as an evolving and competitive market, although its progress in this segment is dependent on many factors, including legalization of online gaming in more US states and changes in public preferences and demographics, as Penn National Gaming, Inc (NASDAQ:PENN) said in its 10-K report. Penn National Gaming, Inc (NASDAQ:PENN)’s stock has gained over 80% during the last decade.
Pinnacle Entertainment, Inc (NASDAQ:PNK)‘s stock is up by 30% for the last 10 years and it saw 26 funds among those tracked by Insider Monkey hold shares at the end of the last year. HG Vora, and David Shaw’s D. E. Shaw & Co. ranked among the top shareholders of Pinnacle Entertainment, Inc (NASDAQ:PNK) heading into 2016. Pinnacle Entertainment also considers that online gaming might represent a threat for its operations. In its last 10-K report, Pinnacle Entertainment said: “[…] internet wagering services are likely to expand in future years and become more accessible to domestic gamblers as a result of recently announced U.S. Department of Justice positions related to the application of federal laws to intrastate internet gaming and initiatives in some states to consider legislation to legalize intrastate internet wagering.”
The bottom line is that even though online casinos currently don’t pose a threat to brick-and-mortar gaming venues, companies operating in the casino space are becoming more and more aware of the technology and while some are already expanding their presence in the mobile space, others are likely to follow suit. However, casino operators also own significant real estate assets in premium locations, which will be appealing for their investors and they offer customer a unique experience, which is unlikely to be replaced by technology. This is why stocks of casino operators are unlikely to tank on the back of online gambling evolution, at least in the next couple of decades.
Disclosure: none
