NEW YORK (TheStreet) -- Casino stocks are falling along with the rest of the market on heightened Japan fears. But analysts reassure that the sector should feel a minimal impact from the earthquake in Japan.
Those companies operating in Macau and Singapore -- Melco Crown Entertainment (MPEL), MGM Resorts (MGM), Las Vegas Sands (LVS) and Wynn Resorts (WYNN) -- all saw shares opening lower on Tuesday, as investors fear the earthquake will affect visits to these markets.
As it relates to Macau, 1.7% of visitation to the market comes from Japan, according to Santarelli. "Given our belief that the majority of the Japan gaming business is VIP play, we would expect any impact to be isolated to the VIP segment of the market."
But even if there is a long-term disruption to Japanese visitation, it will not have a meaningful impact on gross gaming revenue of operator fundamentals, Santarelli predicts.Singapore volumes from Japan are meaningfully higher, at about 5.1% of the total market. Nonetheless, Santarelli still doesn't see a significant impact to gaming operations. Las Vegas Sands opened its flagship casino in the region last April, and thus far has seen impressive results from the market. The biggest issue related to gaming is how it will impact the process for legalizing gaming in Japan. In 2009, Italy turned to gaming expansion rather quickly following its earthquake. "While we do not care to speculate how these events will impact the process in Japan, we do believe investors may come to the conclusion that the need to raise funds for Japan will have more urgency post these tragic events," Santarelli wrote. Have questions or comments about casino stocks? Drop an e-mail or Tweet http://twitter.com/jpoggi. --Written by Jeanine Poggi in New York.
>To contact the writer of this article, click here: Jeanine Poggi. >To follow the writer on Twitter, go to http://twitter.com/jpoggi. >To submit a news tip, send an email to: firstname.lastname@example.org.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV