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Big Names, Big Busts

Regional gaming, iGaming and suppliers are in good shape, but what happened to the stars?

Big Names, Big Busts

In all the ways there are to invest in stocks, one of the most popular is buy and hold. That is, buy a stock for long-term growth and hold it for three or five years, or forever.

In gaming, the regional casino stocks have made big money for buy-and-hold investors. The glamor names have been terrible.

Las Vegas Sands, for example, is down 75 percent as of this writing since its all-time high of $144.56 way back in October 2007. That’s 14 long years.

Likewise, Wynn is down 66 percent from its all-time high in 2014, another long stretch for the buy-and-holder to wait out. MGM Resorts is down 55 percent from its October 2007 high.

The picture is better for more recent time frames. MGM is up 67 percent over the past five years and a whopping 370 percent over 10 years.

Wynn and Las Vegas Sands also were less drastic over those shorter periods, but still lost money for investors. Wynn is down 14 percent over five years and 36 percent over 10. LVS is down 37 percent and 12 percent.

Macau stocks likewise have been losers, with the exception of Galaxy Entertainment. Galaxy is up 23 percent over five years and 273 percent over 10. However, more recent events, including Covid, have taken their toll. Galaxy is down 53 percent from its all-time high in January 2007 and all the other pure-play Macau casino stocks are down 70 and 80-plus percent.

As mentioned, the purely domestic casino operators have been the place to be for buy-and-hold investors. Every regional casino stock is up over the past five and 10 years.

Eldorado-Caesars wins the long-term championship, up over 2,528 percent from the day Eldorado went public in its reverse merger with MTR Gaming in September 2014.

The next biggest winners over the past 10 years have been Churchill Downs, up 1,673 percent; Boyd Gaming, 1,033 percent; Golden Entertainment, 978 percent; Penn National at 770 percent; Monarch Casino at 525 percent; and Century Casino, plus 538 percent.

Over the past five years, the biggest winners after Eldorado-Caesars have been Full House Resorts, up 522 percent; Penn National, 412 percent; and Golden at 308 percent.

Further, the big gains by regional operators are not ancient history, like the all-time highs for the glamor and Macau stocks.

Every regional casino stock hit an all-time high this year in a list that includes Red Rock Resorts, Churchill Downs and the most recent to go public, Bally’s.

The four major suppliers have all made profits for buy-and-hold investors, led by Aristocrat up 2,011 percent over 10 years; Scientific Games, 976 percent; Everi at 852 percent; and IGT at 81 percent.

Everi wins the five-year title up 879 percent, followed by Sci Games at 572 percent and Aristocrat at 176 percent. Aristocrat, Everi and Sci Games also are recent achievers, hitting all-time highs this year.

If there is a common theme in the divergences of casino stocks, it is that purely domestic players outperformed companies that made big bets on Macau.

Another lesson is that glitz doesn’t assure long-term stock price appreciation. Wynn and Las Vegas Sands spend billions of dollars on properties. Eldorado-Caesars, Boyd, Churchill Downs, Golden and their peers spend millions. Yet they provided the better returns for investors.

Personal Note: AGA Hall of Fame

The American Gaming Association once again honored gaming industry achievers with induction into the AGA Hall of Fame. They were all well-deserved, such as Gaming Laboratories International founder James Maida, who, I like to say, invented an industry with his testing lab. Others were Knute Knudson of IGT, attorney Jeff Silver, Delaware North Chairman Jeremy Jacobs and Seminole Tribe of Florida General Counsel Jim Shore.

But for personal reasons, the most significant inductee was Dr. Mark Yoseloff.

Yoseloff was cited for most recently founding the Center for Gaming Innovation at the University of Nevada, Las Vegas. Before that, he was CEO of Shuffle Master, now the table games and associated technology division of Scientific Games.

My association with Shuffle Master began in the mid-1990s when it was a Minneapolis-based manufacturer of a new-fangled device, the automated card shuffler, and one table game, Let It Ride. The game was invented by company founder John Breeding as a prop, in a sense, to demonstrate how his shuffler invention worked.

The company was so small that, when I requested an investor kit, I got back just photocopied articles by the Minneapolis newspaper about the small local brokerage that was the only firm that covered the company.

The CEO at the time was a likeable guy named Joe Lahti. He was a good salesman, but not as effective a CEO, perhaps in part because was wasn’t a gaming person or a Las Vegan. He basically commuted from Minnesota.

He was succeeded by Yoseloff, a Princeton-educated mathematician who once solved a riddle that had baffled mathematicians for generations, including Albert Einstein.

Yoseloff, the inventor of a game named Five Deck Frenzy, had been a consultant to Shuffle Master. As CEO he brought focus, a shrewd business mind, ability to recognize talent in all departments, continuous innovation and expanded product line.

At the time, me and several investor friends were heavily into Shuffle, as we call it. And we were like family, knowing everyone by first name, from Yoseloff down to the receptionist, and always welcomed by Mark and other top executives whenever we visited.

Eventually, a mature Shuffle was sold to Bally for $23.25 a share. My basis was $1.08 a share. It was a once-in-a-lifetime transformational investment for me.

So it was great to see Mark, sporting a dapper bow tie and accompanied by his wife, receive recognition he deserves for such great achievements.

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