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Huge Year for Casinos in 2021 Predicted by Economic Analyst

Huge Year for Casinos in 2021 Predicted by Economic Analyst

A huge year for casinos in 2021 is predicted by economic analysts. 2020 has been a hard year for everyone, more so for casinos, which have had to shut down for more than 6 months with some of them remaining closed due to strict health and safety measures, making it financially impossible for them to open. Travel bans have also taken a toll on revenues. But the future looks bright and hopeful, as a prominent television host and economic analyst, Jim Cramer predicts a booming year for casinos aided by the lifting of travel restrictions.

Read more articles about casino shutdowns: Uncertain future for Loto Quebec

The CNBC television host talked eagerly about the imminent Covid-19 vaccine, saying that once this becomes available globally, people will be free to resume travelling, to enjoy themselves at indoor establishments and to pick up in-person gaming without any unnecessary worries. Speaking on an episode of his stock-investing TV programme, Mad Money, Cramer said “Once enough people are vaccinated … the economy goes back to normal, travel resumes and people start gambling in person again. That’s why the casinos should have a huge year in 2021.”

Read how casinos have been impacted by Covid-19: Covid-19 Fears Keep Gateway Casinos’ Doors Shut

Apart from the inevitable demand for travel, trade relations between the United States and China are also expected to improve under the Biden administration. This combination and the anticipation of the vaccine already have casino stocks rallying. One example of this given by Cramer is the Las Vegas Sands group.

The Las Vegas-based casino operator lost a colossal 76% of business in the first nine months of 2020. Las Vegas Sands own The Venetian Resort and Sands Expo in Las Vegas, and the famous Marina Bay Sands in Singapore. It is one of the casino operators which rely heavily on travel and on customer-spending.

Other casino groups in the same predicament were Wynn Resorts, whose revenue was down by 70%, and MGM Resorts, which have reported a financial loss of 62% until September of this year. However, the last three months of the year have seen an upward trend, with investors carrying their share nearly 30% higher in the last quarter of 2020. It is truly a case of things looking up. In Cramer’s own words, casino operators “had absolutely terrible numbers lately, which means they’ll be up against some easy comparisons once we get closer to herd immunity. And the pent-up demand is absolutely enormous.”

Investors also feel more optimistic with a transition in the White House happening officially next month. Under the Trump administration, the US embarked on a tense trade war with China, before the coronavirus pandemic started. President-elect Joe Biden is determined to develop relations between the US and China, and to attract investors to and from the world’s second-largest economy, despite not touching the 25% tariff already in place on half the imports from China.

Cramer commented on the issue: “I think Trump’s trade war was the right move … but Wall Street hated the trade war every step of the way, so money managers are giddy that Biden’s going to lower the temperature. That’s another reason why the casino stocks have been flying.” Wynn Resorts and Las Vegas stand to benefit from this more diplomatic approach to the situation with China.

Rounding up the year, Cramer is of the opinion that “Americans are ready to gamble again and, perhaps more important, Biden will have a very different attitude toward China. The charts don’t lie and these charts are screaming that the Chinese trade war is about to be over, and so is the pandemic.” The excitement for better revenues and prospects is palpable as we get ready to leave 2020 behind us.

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