Anyone who was mildly responsive during 2020 know what a strange year it was thanks to the coronavirus pandemic and its impact on major sports and retail casino closures. As 2021 dawns, the pandemic still rages, even with sports in full mode, with few if any spectators.
With that in mind, Bank of America analyst Shaun Kelley gave his assessment of the casino, gaming and sports betting sector for the year.
When it comes to sports betting, the major factor for 2021 is how many additional states approve such wagering. States like Michigan and Virginia anticipate debuting sports betting in early 2021. Ohio, Massachusetts, Maine, Georgia and Connecticut are maybes, according to Benzinga.
“Sports betting and iGaming could grow 70 percent in 2021,” Kelley said.
As for the sports calendar, comparisons to 2020 in mature markets like New Jersey and Pennsylvania may prove difficult given the number of events shifted to the second half of 2020.
By the end of 2021, Kelley predicts 27 states will have legal sports betting, which amounts to covering 49 percent of the U.S. population.
As for stocks, DraftKings had a good year in 2020, but Kelley rates it as neutral because of its cost structure and high marketing costs. On the other hand, Churchill Downs gets a buy rating because of the Kentucky Derby brand, its growth success and online success.
Kelley gives Penn National Gaming a price target of $104. Kelley remains neutral on Caesars Entertainment, but because of a faster than predicted turnaround, raised the target price from $65 to $75.
Casinos should recover, Kelley said, but more rapidly in the second half of 2021 in large measure because vaccines will be a catalyst for resumption of convention business.
When it comes to Las Vegas, RevPar expects to grow 25 to 30 percent this year, but still be as much as 10 percent below 2019 RevPar.
In Macau, Kelley raised increased price predictions on Wynn Resorts Ltd. from $95 to $122 and for Las Vegas Sands Corp. from $61 to $65.
