【Sweet Bonanza Pragmatic Play】Tariff turmoil: Global gambling stocks suffer major losses

Last week, US President Donald Trump announced sweeping new tariffs, triggering a global market sell-off, shaking investor confidence and fuelling fears of a global trade war, surging inflation, and an economic slowdown.

The impact has been severe. Over the past five days, the S&P 500 plummeted more than 8%, the Nasdaq dropped nearly 9%, and the FTSE 100 saw a decline of over 10%.

The DAX and STOXX Europe 600 both fell close to 13%, while Hong Kong’s Hang Seng index plunged by 14.5%.

Casino and gambling stocks were far from immune to the market carnage, with several key players experiencing double-digit losses over the past five days, with the most significant drops occurring outside the US.

London-listed evoke plc was one of the biggest losers, with its stock declining by 20.15% over the past five days, while shares of rival Entain dropped 16.04%. In the affiliate sector, Better Collective suffered a 15.39% loss.

US-based gambling stocks also took a heavy hit. Wynn Resorts saw a sharp drop of 13.50%, followed closely by PENN Entertainment, which fell 13.34%.

Las Vegas Sands lost 11.01%, and MGM Resorts International saw a decline of 9.59%.

Other US companies, such as DraftKings and Caesars Entertainment, were also affected, with losses of 6.74% and 7.43%, respectively.

Unsurprisingly, Asian gambling companies were not immune to the market shakeup either. Sands China dropped by more than 17%, while Galaxy Entertainment Group plunged by 16%.

What’s next?

As the market sell-off continues, the big question on investors’ minds is: what comes next?

JP Morgan has predicted a 60% chance of a US and global recession following Trump’s tariff announcement, while Goldman Sachs has raised the likelihood of a US recession to 45% within the next 12 months.

According to analysts at Regulus Partners, the new US tariffs could have a profound impact on global gambling markets.

The tariffs, they argue, represent the biggest structural shift in the global economy since 1990. Rising costs due to tariffs could reduce US consumer spending on leisure activities like gambling.

If wages stagnate and living costs rise, consumers will have less disposable income, potentially shifting demand from land-based casinos towards online gambling.

Regulus Partners also predicts that the sluggish US land-based casino industry could be offset by growing online gambling regulation on a state-by-state basis, as governments seek new sources of tax revenue. This shift, they argue, is likely to occur despite the negative economic impacts of the tariffs.

However, the analysts warn that tariffs could also disrupt emerging markets in Asia and South America, which rely heavily on exports to the US.

Regulus Partners cautions that online gambling legislation might be seen as a solution for struggling economies, but this could carry significant macroeconomic risks, citing examples from Argentina and Venezuela where currency and economic instability far outweigh the benefits of gambling regulation.

“We believe Trump’s tariff policies will have an enormous ripple effect on US and global gambling therefore, but the impact is not inflationary, not recessionary, and not a US domestic shock — the results are likely to be far more dangerous than that.”