Casino, Wagering and Gaming Stocks to Look at: CWN, ALL, PBH, BET 

  • Jun 25, 2020 AEST
  • Team Kalkine
Casino, Wagering and Gaming Stocks to Look at: CWN, ALL, PBH, BET 

Summary

  • With all casinos under strict lockdown since 23 March, livelihoods of people employed in the sector was hit.
  • As government is easing restrictions, casinos are gearing up to re-open but with strict hygiene and physical distancing measures. Online gaming industry continued to perform well during the lockdown.
  • Crown Resorts will re-open casino and gaming floor food and beverage outlets from 27 June with enhanced hygiene measures and physical distancing rules.
  • ALL has confirmed to have a strong balance sheet to support growth strategies in the coming period.
  • Trading business of PointsBet is continuously performing well in Q4, while BetMakers has completed placement worth AUD 35 million to pursue strategic initiatives.

COVID-19 has affected countries across the world, taking a significant toll on people and businesses. Like several other industries, casino and gaming sector also felt the wrath of the ruthless virus, with all casinos closed on 23 March 2020 in Australia, impacting the livelihoods of people employed in the industry.

As Australia has managed to flatten the curve, government is easing several restrictions. Consequently, casinos are also unveiling their plans to re-start operations. In contrast to the casino business, online gaming industry was performing well during the lockdown period.

Must Read: Sports Back to Some Gains: PBH, SHO

Let's dive deep into some of the related space ASX-listed stocks, covering their recent developments amid the COVID-19 situation.  

Crown Resorts Limited (ASX:CWN)

CWN is amongst Australia's biggest entertainment groups, which significantly contributes to the Australian economy. 

On 23 June 2020, CWN announced that it is all set to re-commence operations of its casino and gaming floor food and beverage outlets from Saturday, 27 June 2020. Agreed with the Western Australian Government, the outlets will operate as per the following restrictions in the wake of ongoing pandemic crisis:

  • There will be capacity limits at each outlet, as the permission is only for one person per two square metres, including the staff.
  • At electronic gaming machines and table games, physical distancing will be strictly followed among the patrons.
  • There will be frequent cleaning to maintain proper hygiene.
  • Less number of players at gaming tables.

Crown's CEO Ken Barton stated that the Company is highly concerned about the health and safety of customers, staff members, and the community at large. The hygiene and physical distancing measures have been developed after consulting with Chief Health Officer, Commissioner of Police, and the government. The venues are being re-opened by taking all safety precautions. CWN is looking forward to welcoming clients and many of the employees back.

At the time of market closure on 25 June 2020, CWN settled at AUD 9.430, down by 4.651 per cent, with a market cap of AUD 6.7 billion.

Aristocrat Leisure Limited (ASX: ALL)

ALL is a leading gaming provider and games publisher, with its Land-based products approved for use in 300 plus licensed jurisdictions and available in 80 countries. As per the recently announced changes in the S&P/ASX indices by S&P Dow Jones Indices, ALL was due for inclusion in S&P/ASX 20 Index on 22 June 2020.

In its first half (ended 31 March 2020) result update in May 2020, the Company unveiled to have a strong balance sheet that supports its growth strategies.

  • Liquidity further boosted to AUD 1.8 billion Pro-forma, at 31 March 2020.
  • USD 500 million incremental Term Loan B (TLB) raised in May 2020.

ALL also reported a 42 per cent growth in operating cash flow with a double-digit increase in digital platform. Overall, NPATA decreased to 12.8 per cent due to the pandemic effects on the Land-based business.

Group operating revenue was up by 7 per cent to AUD 2.3 billion, while digital went up by 19 per cent (local currency), and Land-based declined by 6 per cent. EBITDA declined by 8 per cent to AUD 708 million.  

Digital revenue and bookings increased by 19 per cent and profit went up by 12 per cent. ALL has diversified its portfolio with the scaling of a world-class RPG game and the release of two new casual games.

The Company also announced that the land-based market would re-open in a phased manner on a location by location basis. Most North American casinos are expected to re-open by the end of June 2020 with occupancy limit guidelines, strict social distancing, reduced trading hours and frequent sanitisation.

On 25 June 2020, ALL closed the day’s trade at AUD 25.310, down by 3.36 per cent, with a market cap of AUD 16.72 billion.

PointsBet Holdings Limited (ASX:PBH)

Corporate bookmaker with operations in Australia and the US, PBH has developed a scalable cloud-based wagering platform to offer innovative sports and racing wagering products to clients. As per the recently announced changes in the S&P/ASX indices by S&P Dow Jones Indices, PBH was due for inclusion in S&P/ASX 300 Index on 22 June 2020.

PointsBet has entered an agreement with Fox Sports AFL (Fox Footy) in Australia to serve as the latter’s exclusive wagering partner during the 2020 season. The contract shows the Company's disciplined and opportunistic attitude to target media assets for increased betting volumes and client acquisition.

Australian Trading business is continuously performing well in Q4 and achieved net win of AUD 18.2 million between 1 April and 25 May 2020.

The major sporting leagues were closed, but the US business managed to achieve Net Win of AUD 0.3 million for the period 1 April to 25 May 2020 (unaudited) and Group year to date Net Win from 1 July 2019 to 25 May 2020 was AUD 67.2 million.

Australian trading business' strong performance is based on the following factors:

  • Shift to online gambling.
  • PointsBet's racing turnover growth is more than the rivals.
  • Improvement in overall product offerings.

At the time of market closure on 25 June 2020, PBH settled at AUD 5.800, down 8.228 per cent from its previous close, with a market cap of AUD 965.92 million.

Interesting Read: Community Sports in NSW to Return in July; 3 Stocks in Action

BetMakers Technology Group Limited (ASX:BET)

Australia-based wagering operator, BET recently completed a placement with the issue and allotment of 94,594,595 fully paid ordinary shares to raise AUD 35 million (before costs). The AUD 0.37 per share placement was closed with institutional and sophisticated investors involved 

Funds received from the placement would be directed towards:

  • Pursuing strategic initiatives, including expansion into the US wagering market.
  • Payment of final instalments concerning acquisitions of the DynamicOdds and Global Betting Services businesses.

BET is negotiating deals with licensed operators within New Jersey and other international and domestic racing bodies.

On 25 June 2020, BET last traded at AUD 0.425, down by 6.593 per cent from its previous close, with a market cap of AUD 258.69 million.

Must Read: Gaming Players under Radar, Playing season knocking off with the new normal

 


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