Caesars Stock Has Ample Post-Election Potential if Voters Cooperate
Posted on: October 26, 2020, 10:51h.
Last updated on: October 26, 2020, 12:52h.
Voters in several states will mull various gaming-related propositions on Election Day. Few publicly traded operators match Caesars Entertainment’s (NASDAQ:CZR) potential for post-electoral equity market moves.
Six states — Colorado, Louisiana, Maryland, Nebraska, South Dakota, and Virginia — are putting betting issues before voters on Nov. 3. Even when throwing out the Cornhusker and Mount Rushmore states because the company has no operations in either, Caesars stock could be levered to Election Day goings-on.
In Virginia, voters are considering full-scale casino expansion, notes Union Gaming. Those referendums are relevant to Caesars because the operator is eyeing the construction of a gaming venue in Danville. A simple majority is all that’s needed for the company to move forward with its plans for what could be the first new casino it would build since becoming the largest gaming operator in the US.
Looking to allay concerns of local religious leaders, Caesars told politicians the $400 million Danville property would create 1,300 permanent jobs and drive a minimum of $9 million annually in tax receipts.
Big Sports Betting Ballot Initiatives
As it closes in on a $3.69 billion takeover of William Hill, Caesars is an increasingly prominent player in the growing US sports betting landscape. That status carries with it imminent political implications, with Louisiana and Maryland voters mulling sports wagering referendums this year.
The biggest sports betting opportunity on the ballot this year is Maryland, given the significant population base, household income demographics, and sports culture,” notes Union Gaming. “All of Maryland’s neighbors already approved sports betting, and the state legislature passed the bill with near-unanimous support, so we like the odds.”
In that state, Caesars operates the Horseshoe Baltimore. The Pelican State sports betting proposal is likely to pass because it’s being considered on a parish-by-parish basis, and it’s expected that only a handful of less-populated, rural regions will oppose the effort.
Nevada-based Caesars currently runs six gaming properties in the state, and even when two pending sales are finalized, it will remain one of the biggest Louisiana operators. The state is the fifth-largest gaming market in the US.
Don’t Forget Colorado
Caesars could benefit from a different Election Day catalyst in Colorado. While voters in other states are considering the addition of new casinos or sports wagering, Centennial State voters are mulling Amendment 77, which if approved, would raise the $100 per bet table game limit and allow for the addition of new games, including baccarat.
In a note to clients today, Union Gaming points out that Colorado’s percentage of gross gaming revenue (GGR) derived from table play lags those of comparable markets. The research firm adds that by eliminating the table wager cap, Centennial State casinos could attract more big gamblers, keep local bettors in the state, and derive other benefits, such as increased food, beverage, and hotel revenue.
In the state’s biggest gaming town of Black Hawk, Caesars operates the Isle and Lady Luck casinos, indicating the company would be a beneficiary of Amendment 77 passing.
Related News Articles
Related News Articles
May 12, 2022 — 3 Comments—