By Kim Khan
Investing.com - Concerns of the coronavirus in China spreading and hurting air travel weighed on airline stocks earlier Tuesday and those worries are also pressuring casino stocks.
Authorities have now confirmed six deaths from the coronavirus, a pneumonia-like disease that is capable of being transmitted from person to person. The outbreak, which started in the central Chinese city of Wuhan, has shown signs of spreading throughout the country, triggering fears of a repeat of the 2002 SARS epidemic.
Any hesitation about travel in China would hit business in Macau, the center of gambling in the Far East and an important revenue stream for public gaming companies.
Wynn Resorts gets about 75% of its revenue from Macau, while Las Vegas Sands gets about 60% of its revenue from the island and MGM derives 20%, Briefing.com reported.
Morgan Stanley (NYSE:MS) had already cut Las Vegas Sands to equal weight from overweight today, saying it prefers regional U.S. gaming stocks due to still untapped potential for sports betting.
Wynn Resorts (NASDAQ:WYNN) fell about 5% in afternoon trading. Las Vegas Sands (NYSE:LVS) was down 4.3% and MGM Resorts International (NYSE:MGM) dipped 3.4%.