Challenges Ahead It was a bad week for the gaming business and should further impair casino stocks over the coming months. Great Canadian Gaming was down 3.0% on the week, but as I shared in a previous post, I expect shares to trade signifcantly lower in the weeks ahead.
A couple of items that caught my attention this week that I think will impair the longterm value of casinos and reduce the value of shares:
1. On Tuesday, the Nevada Gaming Control Board ordered casinos statewide to require players at table games to wear face coverings if no barrier is in place between the dealer and each player. The ruling includes spectators and anyone else within six feet of the tables. I think this will reduce interest from players and further increase costs for casino opperators.
2. On Thursday, we saw a wave of casinos closing shortly after they reopenned in the US. Gila River Hotels and Casinos closed its three casinos in the Phoenix for atleast two weeks after an employee contracted the virus and died. The casinos had just reopened on May 15. Additionally, Desert Diamond Casinos also announced the temporary closure of its Casino in Arizona after an after an employee test positive. I think this will provide further deterent for Ontario & BC Governments to allow reopenning and add risks to Great Canadian that even when reopenned closure sould occur at anytime.
One bit of positive news for Great Canadian is that new COVID-19 cases across Canada have been decling, but I am firm believer one should be selling shares at prices in the 20's or even selling with share prices in the teens. There's just no justiciaftion that I can see to own these shares at this valuation.