Right now I am working in the manufacturing industry but my educational background is corporate. I went to business school to pursue a degree in advertising, but there are not a lot of jobs open in that field right now. Nonetheless, I have retained my knowledge and know a fair deal about how various types of industry work. In the financial world I have always been fascinated by the stock market. It seems cool that you can buy a piece of a company and watch the investment grow or shrink with the market.
When you look at it, you don't really have a direct say in the performance of the company that you invest in and it really is kind of like some sort of casino gambling game. The key difference in my opinion is that you get to hold on to the equity in the company even if your stock crashes and you are reduced to peanuts on an initial investment, versus walking away with nothing when your slot machine gobbles up all your nickels. Of course the shiny lights and thrills are absent from stock ownership and you won't get the thrill of cool noises clinging around when your stock earns big either. But what if we could mix the two directly in a way, and is it a good idea to invest in gambling as a business?
Welcome to the world of Gaming Industry stocks.
Coming from the United States, there are several gaming companies that you can invest in. One of the biggest of these companies is Gaming Partners International. This company is a big designer of slot machines. Chances are that if you have walked into a land based casino, you have seen their slots. They also market home versions of their games which you see in many retailers such as Target or Best Buy. Another big company is Shufflemaster. They are the company that controls the shuffling machines at many tables you play. They also have video versions of blackjack tables that take away the actual dealer play...among other games and features. If you are looking to invest in the actual companies who have resorts, you can invest in MGM or Isle of Capri Casinos.
Now we know that there are a lot of choices for you to invest in, we need to ask ourselves: Is investing in gambling companies a good bet? It really is cool to to own a piece of the company that is a part of your hobby, but does it make financial sense for you? This makes things a little murkier and you need to not let your passion for the games get in the way of your dollars and cents. In general the United States' economy is sucking worse than a Hoover vacuum right now. People do not have the general amount of money they once had to finance trips or go out and spend as much on leisure. This has hurt the industry and slowed growth for many land based operators. For example, on the casinolistings main page today you will see a news story showing that Atlantic City's revenue was down 9% for May compared to one year ago. This does not hold well, and appears that the land based industry is tied closely to the overall economy. But what about online gambling companies?
Some people are optimistic that online gambling is due to be legalized in the States. I myself have my doubts but hope this does come true. Opening up a huge market to a new industry would be a big boon to everybody involved. Land based casinos would have the opportunity to put their games online and people who could not afford a trip to Atlantic City could perhaps afford a "night out" on the computer and gamble online. More importantly for these established companies, legalized U.S. gambling would become a big income boost for them. Other companies would perhaps jump to online too and boost revenues, making them a worthwhile investment should the day of legalized gambling come to America.
So, what is my overall take on this? I think that right now mixing your hobby with stock ownership is not necessarily a good idea, however if we are near the bottom of a market and online gambling does indeed become legal in the States, it may be a good time to invest, as you would be likely to see a big jump in the value of your stock. Just don't expect to hear and bells and whistles clinging if and when your stock makes you wealthy.
*NOTE: I am NOT a stockbroker, and I do not own any stock in any of these companies. Everything I said in this blog is strictly my opinion and may very well be wrong. Do your own homework and follow my wife's apparent strategy: Don't listen to me.