The easing of pandemic distancing restrictions facilitated by mass vaccinations is allowing casinos and related entertainment companies to reopen at 40-50% capacity. This, coupled with the rising popularity of online gambling, is fostering optimism among Wall Street analysts about the upside potential of Penn National Gaming (NASDAQ:PENN) and Melco Resorts & Entertainment (MLCO). Read on.The ongoing U.S. mass vaccination drive bodes well for the tourism industry because the pent-up demand for travel is through the roof. With most travel and hospitality companies receiving huge, advanced bookings, brick-and-mortar casinos and related business segments are likely to soon see increasing foot traffic. This is why the casino management systems market is expected to grow at a 16.4% CAGR over the next five years to hit $13.7 Billion by 2025.
Furthermore, online gambling has gained in popularity since the onset of the pandemic as an alternative to brick-and-mortar casinos. This is evidenced by the VanEck Vectors Gaming ETF’s (BJK) 81.2% returns versus SPDR S&P 500 ETF’s (SPY) 45.3% over the past year.
Given this backdrop, Wall Street analysts expect casino stocks Penn National Gaming, Inc. (PENN) and Melco Resorts & Entertainment Limited (MLCO) to deliver solid returns in the coming months.