Below is an excerpt from a complimentary research note by our Gaming, Lodging & Leisure analyst Todd Jordan. We are pleased to announce our new Sector Pro Product Gaming, Lodging & Leisure Pro. Click HERE to learn more.
Delta certainly made its mark on the US in August and impacted many GLL businesses.
The states with regional casinos in the Midwest and South were rocked even harder. But as we highlighted at the beginning of the month, the forward-looking data implied an improving situation was on the horizon, not just for the regional states but also for the rest of the US.
The below chart highlights the Covid reproduction rates (Rt) for our regional gaming sample (weighted by GGR) and the total US average. Put simply, Rt is the average number of people who will become infected by a person infected at time t.
If it’s above 1.0, COVID-19 cases will increase in the near future. If it’s below 1.0, COVID-19 cases will decrease in the near future.
For our intents and purpose this AM, we’re trying to get a handle whether the Covid situation has a high probability of improving in the coming weeks and days, or whether trouble could be ahead.
August clearly showed an impact across much of the GLL space, and the delta wave was an obvious culprit, so this forward-looking data is becoming more important for us to monitor.
Our takeaway from the latest update is one of optimism – the regional gaming markets and the broader US are facing a much better Covid setup and based on reproduction rates we should see cases and other key metrics continue to fall (if recent history is a guide).