The stock market isn’t restricted to global businessmen and traders on Wall Street. Anyone can learn how the stock market works. But it’s about more than just learning terms and rules — it’s about learning how the market is inherently unpredictable.
Betting on the stock marketing is similar to playing a game of poker: Despite popular misconceptions, neither can be reduced to simply being dealt a lucky hand. Playing the stock market and poker both require understanding risk and developing certain skills, and knowing how to leverage those skills with chance.
Regardless, there are a few things you should keep in mind when choosing which casino and eGaming stocks to invest in:
What do you want to invest in?
You have more than a few options when investing in gaming stocks. You could invest in the physical casinos themselves, like the Las Vegas Sands or MGM. If you want a low-risk option, you could invest in a company that owns the land that a casino operates on. Or, you could invest in the companies that create the games (like slot machines) that go inside the casinos. Or you could invest in one of the major online gaming companies.
If you choose to invest in a physical casino, consider whether you want to invest in a well-known, global company or one that’s more local. After all, there are plenty of smaller casinos that consistently perform well.
How much risk do you want to take on?
When determining which stocks to invest in, make sure you choose investments that fit your risk profile. As stated, the least risky option is buying stock in a company that owns a casino property. Casinos are riskier to invest in, and their stock will fluctuate according to the economy or customer behavior. The same goes for online gaming companies. The riskiest stock to invest in is one of the companies that supplies the games. And this is even riskier to invest in now with the rise of online gaming.
Pay attention to differences in regional markets.
The biggest gaming markets are in Las Vegas, Singapore, and Macau. But they don’t all function the same way. For example, Las Vegas mostly relies on national and international tourism. If the tourists don’t come, their revenue drops. This isn’t really the case in Macau. There, the gaming market is mostly controlled by high rollers. As for Singapore, there’s more of a mix of the two in terms of clientele.
Stay on top of the latest news.
First, it’s helpful to know the latest trends in gaming and technology because they can of course have a big impact on consumer demand and behavior. But you should definitely know what’s happening wherever your investments are. This is especially important if you have investments that are more likely to fluctuate based on local events. If you’re investing in Macau gaming, for example, stay up to date on the Chinese economy and news.
But that doesn’t mean you should neglect other global markets, especially since they tend to affect one another. For example, Japan is hoping to soon get a slice of the gaming action. Although many things have yet to be determined, that market is predicted to become a serious competitor with Macau and Singapore. Plus, it will likely be an attractive destination for both high rollers and tourists.
Additionally, it helps to stay informed on the major players in the gaming industry, whether or not you’re invested in any of them. For example, MGM, Wynn Resorts, and Las Vegas Sands are all doing extremely well this year. Analysts didn’t expect to see this type of response, especially since they all rely heavily on Macau gaming traffic.
There’s a lot to factor in when choosing which types of gaming stocks to invest in. You can stay up to date on all of the latest news and trends and make informed decisions, but at the end of the day, a lot of playing the stock market is left up to chance.
