ASX gambling shares lost out today in another extraordinary day on the Australian share market. The S&P/ASX 200 Index (ASX: XJO) was down 3.4% at market close, but gambling shares were down by much more.
Crown Resorts Ltd (ASX: CWN) fell by 5.51%, SkyCity Entertainment Group Limited (ASX: SKC) dropped 13.02%, Jumbo Interactive Ltd (ASX: JIN) declined 5.46% and Tabcorp Holdings Limited (ASX: TAH) lost 4.74%. Star Entertainment Group Limited (ASX: SGR) was an outlier, recording a fall of just 2.01%.
Social distancing measures and an expected impending recession are taking their toll on ASX gambling shares, which have become the latest in a growing list of coronavirus victims.
News out of ASX gambling shares this week
Earlier this week, Crown and Star Entertainment announced new measures to comply with government-mandated social distancing regulations. Both casino groups have deactivated every second gaming machine and instituted distancing requirements for players at seated table games. No more than 100 patrons will be permitted at food and beverage, banqueting, and conference facilities, in line with government regulations.
SkyCity has reported visitation to the SkyCity precinct in March to date is down 15%, with electronic gaming revenue down 14%, and table revenue down 43%. Food, beverage, and conventions revenue is down 32% and Sky Tower revenue is down 35%. These declines are expected to be exacerbated by new border controls and other restrictions recently imposed in New Zealand and Australia.
SkyCity CEO Graeme Stephens said current market conditions were unprecedented, "the focus for now is on reacting rapidly to the situation, which is evolving daily, and on ensuring we can continue to trade in a way that is responsible."
It seems online gambling is not immune, as investors shy away from Jumbo Interactive. Shares in the digital lottery retailer are down by over 34% in the last month, and more than 70% from its highs of above $27 late last year. As fears of a recession solidify, investors no doubt fear Jumbo's customers will be left with less discretionary income to direct to gambling.
Tabcorp is in a similar position, with shares effectively halving since February highs of $4.65 to trade at $2.41. With wagering services offered through a network of hotels, clubs, and on-course totalisers, Tabcorp is likely to see patronage decline significantly. Bans on gatherings of over 100 people will mean a major decline in attendance at the venues which Tabcorp operates through, with an associated decline in revenues expected.
Foolish takeaway
ASX gambling shares are now gambling on a drop in profits as the impact of travel restrictions, social distancing regulations, and increasing economic strain begin to mount.
