What happened 

Shares of casino giant Las Vegas Sands (NYSE:LVS) dropped 34% in the first half of 2020, according to data provided by S&P Global Market Intelligence, as the gambling industry was turned on its head. And there may be even more uncertainty in the second half of the year. 

So what 

COVID-19 has hit the resort and casino business hard, the biggest reason shares are down. As a company focused in Asia, the 77.4% drop in gambling revenue in Macao is the one indicator of just how bad conditions have gotten for Las Vegas Sands' main market. 

Macao's skyline from the water at dusk.

The Macao skyline. Image source: Getty Images.

The problem is that we don't know when customers will return to casinos. In Asia, travel restrictions aimed at controlling COVID-19 have made it difficult or impossible to get to Macao. In the U.S., resorts were closed for months, and their recent reopening may be met with skepticism by gamblers and those who once traveled to Las Vegas for work or leisure. 

Now what 

While the casino industry is going through a challenging time, no company is built to survive the way Las Vegas Sands is. The company has $2.6 billion of unrestricted cash on the balance sheet with another $3.9 billion in potential borrowing ability. And when casinos do open, it has some of the industry's highest margins and best cash flow. If you can ride out the storm, this is a gambling stock worth owning for the long term.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.