What happened
The stock market is seeing modest gains today, with most major indexes up less than 1% as of 3:20 p.m. EDT. However, large casino operators are outperforming the broader market, and by a wide margin. MGM Resorts (MGM +0.24%) is higher by 10%, Wynn Resorts (WYNN 0.05%) is up by 7.5%, and Las Vegas Sands (LVS +0.58%) has gained more than 4%.
So what
There are a couple of potential catalysts fueling today's moves higher.
Image source: Getty Images.
First, fellow gaming stock Penn National Gaming (PENN +0.38%) reported second-quarter results that seemed to give investors hope for the future. While revenue declined dramatically in the second quarter, Penn's management gave positive comments in regards to demand going forward, and this optimism seems to be helping to boost the entire industry.
Second, Macau's Secretary for Security hinted that there could be "good news" on the border opening between Macau (where all three of these companies have casinos) and mainland China. The short version of the story is that Macau casinos have been open for months, but because of restrictive quarantine protocols for travelers, they have had virtually no business. While there's nothing certain yet, an easing of the restrictions could be game-changing news for the Macau gaming industry.
Now what
Casinos remain some of the most beaten-down cyclical stocks of the COVID-19 era, but today's developments seem to be giving gaming investors hope that there's light at the end of the tunnel.
