Tariff Tumult: Casino Stocks Among Most Shorted S&P 500 Names in April
Posted on: May 13, 2025, 02:25h.
Last updated on: May 13, 2025, 02:25h.
- “Liberation Day” encouraged shorting of casino stocks
- Caesars, MGM among favorite targets
- Gaming equities now pinching bearish traders
Immediately following “Liberation Day” on April 2, bearish traders laid into casino stocks, making several among the shorted names in the S&P 500. Now, they may be regretting those moves.
It’s clear the Trump Administration’s unprecedented trade policy temporarily plagued the broader market, including gaming names, stoking fears about a recession and retrenchment in consumer spending — undeniably gloomy headlines for casino stocks.
Short sellers took the bait with data indicating that based on a percentage of float, three casino stocks were among the most shorted S&P 500 components last month. In order of short interest as a percentage of float, the Liberation Day “victims” from the gaming space are Caesars Entertainment (NASDAQ: CZR), MGM Resorts International (NYSE: MGM), and Wynn Resorts (NASDAQ: WYNN).
Caesars, which often ranks among the most shorted names in the benchmark US equity gauge, was the seventh most shorted name in the S&P 500 last month and the most shorted of the aforementioned gaming trio. In the fourth month of the year, 11.72% of the Harrah’s operator float was sold short, according to Seeking Alpha data.
Traders Made Sensible Bets Against Casino Stocks, But…
On the surface, casino stocks made for easy marks amid the tariff calamity. There have already been signs of reduced visitation to the Las Vegas Strip, where MGM and Caesars are the two largest operators, from Canadian and Mexican tourists.
Likewise, market participants may have been inclined to bet against MGM and Wynn on the basis that Beijing could have implemented punitive measures against US-based Macau concessionaires. MGM China and Wynn Macau combine to run four integrated resorts in the Chinese territory.
To date, China has not targeted US-based Macau operators and there’s no evidence suggesting Chinese bettors are frequenting MGM China, Sands China, and Wynn Macau venues less than the casinos run by Asian companies.
The combination of Las Vegas and Macau exposure may be among the reasons why short interest in MGM jumped to 9.22% last month and the Macau factor is likely the primary catalyst behind short interest in Wynn rising to 8.69%. Those percentages made the two casino stocks the 17th and 19th most shorted S&P 500 members last month.
Casino Stocks May Have Burned Short Sellers
It’s understandable that traders made bearish bets against gaming equities against the tariff backdrop, but they’re now paying the price because progress has been made on the trade front, sparking massive rallies in “risk on” stocks.
Over the past month, shares of Caesars are up 20% while MGM gained 19%. Both lag the staggering 32.14% gained by Wynn over that period.
Each of those performances are bad news for short sellers, some of whom have likely been forced to abandon losing trades in casino stocks. That’s pertinent because when short sellers close trades, they buy the stock in question, potentially contributing to upside in the process.
Last Comment ( 1 )
I will take a look at shorting them if they continue to rise and we get closer to July 8th when the 90 day postponement of tariffs much higher than the current 10%. Still a good chance that we get a recession and casino stocks do badly during recessions. The tariffs on China are still at 30% which is too high to do a lot of business with the US and China.