Ichan casino stock investment

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1. Understand what part of the casino you’re betting on.

Anyone who’s ever been to Las Vegas knows that the only sure winner is the house. That’s why many investors like casino stocks ichan casino stock investment much, because over the long run, they’ve been highly profitable investments that have in many investmeny produced impressive returns for their shareholders. Yet as with any market sector, there are nuances to the casino industry that require some thinking before you simply go out and buy a particular resort operator’s shares. To invest in casino stocks, you’ll need to come up with answers on some key issues:. We’ll look at each of these questions. Data source: Yahoo!

It wouldn’t be wise to sit down at a table in Las Vegas without understanding the rules of the game you’re about to play. Similarly, it’s important to understand the rules that govern the gambling industry before you choose to buy gambling or casino stocks. We’ve laid out a few steps for you to bear in mind as you consider investing in the casino market. Let’s start with the games themselves. After years of consolidation, these are the two biggest gambling suppliers in the industry, building everything from slot machines to shufflers and back-end gaming systems. Suppliers operate in a regulated environment, just like casino operators themselves, so the business is difficult to disrupt from the outside.

Anyone who’s ever been to Las Vegas knows that the only sure winner is the house. That’s why many investors like casino stocks so much, because over the long run, they’ve been highly profitable investments that have in many cases produced impressive returns for their shareholders. Yet as with any market sector, there are nuances to the casino industry that require some thinking before you simply go out and buy a particular resort operator’s shares.

To invest in casino stocks, you’ll need to come up with answers on some key issues:. We’ll look at each of these questions. Data source: Yahoo! The most important distinction among casino stocks is whether they have exposure to the Asian gaming capital of Macau. This former Portuguese colony reverted to Chinese hands in the late s, creating considerable uncertainty about its future after more than a century of legalized gambling.

Macau has become more important for Sands and Wynn than Las Vegas, despite the fact that both casino giants are headquartered in the Nevada gambling mecca. Exposure to Macau has been a double-edged sword. During the growth phase, Macau exposure helped casino stocks bolster their growth. When Macau went into a prolonged pullback, it sent Wynn and Sands sharply downward, even as other casino stocks without exposure in Asia did better. Macau still has promise, but you have to decide whether you want companies with a major presence there or prefer those that focus on other areas.

Image source: Getty Images. Most successful casino operators therefore located their businesses. Over time, though, legalization of gambling across the nation has made it easier for casino operators to establish a more regional presence. Key areas include the Mississippi River Basin, where river gambling is largely legal.

During Macau’s pullback, these regional operators thrived because they had absolutely no international exposure and could focus on serving customers bolstered by the strengthening U. Consolidation in the regional industry promises to shake things up.

In order to avoid antitrust concerns, the two resort operators agreed to sell four of their properties to Boyd Gaming, which has properties both in Las Vegas and around the country. Yet larger players are also looking at regional casinos, including Wynn Resorts’ ichan casino stock investment property in Boston.

As gambling expands, the regional outlook will be increasingly important. Finally, if you prefer not to choose individual investments, there’s a fund that specializes in casino stocks. You’ll also find some exposure to companies that supply casino resorts, such as slot machine manufacturers. The ETF doesn’t give the focused exposure to casino resort companies that some investors might prefer. Yet with a broader scope covering all of the gaming industry, the ETF might actually provide more valuable diversification than investors would generally expect from a sector-specific fund.

In the long run, the casino always wins, but that doesn’t mean every casino stock will bring long-term riches to shareholders. Deciding to what extent you believe in the future of Macau and of regional U. More From The Motley Fool.

Dan Caplinger owns shares of Wynn Resorts. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. No matching results for ». Tip: Try a valid symbol or a specific company name for relevant results. Finance Home. Markets closed. Dan Caplinger, The Motley Fool. Motley Fool December 19, To invest in casino stocks, you’ll need to come up with answers on some key issues: Do you want exposure to the Macau market?

How comfortable are you with the prospects for U. Would you prefer an exchange traded fund to buying individual stocks? Macau skyline at night, with view of harbor and major casino buildings.

Story continues. Should you bet on casino stocks? Recently Viewed Your list is. What to Read Next. Insider Monkey. Fox Business. Yahoo Finance. Yahoo Finance Video. House Beautiful. Yahoo Finance UK.

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