BJK: The House Always Wins

As the COVID pandemic continues to disrupt lives and businesses, there is one sector that may have seen its darkest days behind them. Commercial casinos in the US, have reopened without restrictions, and US gamblers have returned to the industry in such great numbers that if revenues continue to grow at their current rate, the US casino industry could be set for its best year ever. Here is what VanEck has to say about this industry.

VanEck
VanEck12 Aug 2021 1077 Views
BJK: The House Always Wins
As the COVID pandemic continues to disrupt lives and businesses, there is one sector that may have seen its darkest days behind them. 

Commercial casinos in the US, have reopened without restrictions, and US gamblers have returned to the industry in such great numbers that if revenues continue to grow at their current rate, the US casino industry could be set for its best year ever. 

Recap of VanEck Vectors Gaming ETF (BJK or shorthand for Blackjack):

Incepted in 2008, NASDAQ:BJK is the US’s First ETF Focused on Global Gaming
Pure Play with Global Scope - To be initially eligible, index constituents must be principally engaged in the global gaming industry, deriving greater than 50% of revenues from it



Background and latest update on BJK:

Latest data released by American Gaming Association (AGA) shows that the US casino industry saw its best second quarter in history as commercial casinos across 25 states took in $13.6B. 
The $13.6B includes gaming revenue from table games, sports betting, and IGaming.
Latest figures show an increase of nearly 500% on Q2 2020 when casino revenues was severely impacted by the global pandemic.

US gamblers have returned to the industry in great numbers as commercial casinos continue to reopen without restrictions. 
If revenues continue to grow at the current rate, the US casino industry can be set for its best year ever.
A few of BJK’s top holdings, Las Vegas Sands Corp (5.49%), MGM Resorts International (5.18%), Vici Properties (4.56%),  Caesars Entertainment Group (4.18%), are poised to benefit from the “reopening trade””

Better-then-expected quarterly earnings last week from industry giants, WYNN (2.97%) and MGM (5.18%),  provide hope that better times lie ahead.

The sports betting industry has already generated more revenue in the first six months of 2021 (1.8B) than all of 2020 (1.5B).

DKNG (7.8%), a top holding in BJK, reported better-than-expected quarterly profit and revenue and raised its revenue forecast for the full year.

Macau stocks still poise an issue as concerns of a regular crackdown in China on tech and education names could dampen investor enthusiasm for the casino sector. 
All six gaming concessions in Macau are up for renewal in 2020. The regulatory backdrop is layering in another level of risk for a sector already looking to recover from the pandemic.
Channel checks by JPMorgan indicate a pick-up In demand in Macau is starting. The firm forecasts gross gaming revenue to resume a sequential recovery path  and rise to a post pandemic high in August.

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