New COVID-19 Variant Hits Casino Stocks Hard
With the announcement of a new COVID-19 variant, casino stocks crashed hard, as the new strain could affect the gaming industry in a negative manner.
Unless you have been living under a rock somewhere or out in the wilderness with no connection to the outside world, then you know how the gaming industry has been affected by COVID-19. Just like the rest of the world, the gaming industry in the United States was hit hard by the virus when it started in early 2020. Casinos were shut down due to the social nature of the venues and once reopened, only did so at limited capacity.
For the past few months, casinos in the US have seen good recovery as players are getting out more and visiting venues. However, a recent announcement of a new strain known as Omicron now has the industry worried, or at least stockholders. The Dow posted the worst decrease in casino stocks on Friday as investors felt the new COVID strain would harm the gaming industry once again as well as travel.
Major Dow Drop
As the World Health Organization announced the new strain on Friday, the Dow dropped by over 900 points in one day. The new strain was identified in South Africa and has already started new international travel bans and restrictions in areas like Europe and Hong Kong.
Right now, scientists are unsure if the strain is more contagious or how it will affect those who catch it. There is also no indication as to whether or not existing vaccinations will help the virus or do nothing against it.
In the United States, travel for international passengers was just reinstated and many were worried that this new strain would affect the change. The Biden Administration announced that only people from South Africa and a few other countries would be banned. Visitors to the US must be able to show a negative COVID test or a vaccination to enter the country.
With the announcement of the strain gaming stocks dropped considerably. Melco Resorts saw the biggest drop at more than 10%. Century Casinos dropped more than 8%. Wynn Resorts was not far behind with a 6% decrease. The Las Vegas Sands dropped just under 5%. MGM Resorts International was only down 2.3%. Other gaming companies saw smaller decreases.
Are Investors Jumping the Gun?
With such a significant decrease in stocks on Friday after the strain announcement, are investors jumping the gun? Are they too quickly to feel that casinos will be affected by a new strain of COVID that exists in another country?
For the casinos, operators feel that they know how to handle the virus effectively. Most venues still have protocols in place including mask wearing, recommended social distancing, and regular cleaning of machines and high touch areas.
While outbreaks did occur among employees or guests early on at casinos, it has not happened in several months. Employees are getting vaccinated either by choice or due to the desire of the employer, which has helped to cut down on positive cases.
The casinos do know what to do during the pandemic and should be able to handle any new variant as it comes along. It is important to note that COVID does not seem to be going anywhere and the casino industry, more than others, have been able to successfully deal with the virus on several levels.
Hopefully, the new strain will not be damaging in general, be it to individuals who catch it or to businesses that could be affected. We must all learn how to adapt and take charge when it comes to keeping everyone healthy and the economy going strong.