Casino And Sports Betting Companies Dumped After Virus Outbreak Postpones MLB Games

A reality check is playing out for daytraders who panic bought casino and sports betting stocks during the pandemic, betting on a V-shaped recovery, have come to find out on Monday that these stocks are quickly sinking on COVID-19 concerns. 

Shares of MGM Resorts are down 6.2%, Las Vegas Sands Corp -2.1%, Wynn Resorts Ltd -4.2%, and Boyd Gaming Corp -3.5%. 

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Sports betting companies were slammed lower after a COVID-19 outbreak led Major League Baseball to postpone two games.

Draftkings Inc plunged 7.5% on the news. Penn National Gaming Inc was down -7%, as the company attempts to unveil a sports betting app ahead of the NFL and college football season. 

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During the pandemic, there were no sports games, sports betting companies like DraftKings and Penn relied heavily on alternatives. DraftKings allowed users to bet on Russian table tennis and virtual video games, while Penn’s Barstool Sports founder Dave Portnoy pumped penny stocks. 

If more MLB games are postponed, and the reemergence of the virus worsens, this could be incredibly bad for Robinhood traders who went all-in on some of these stocks, hoping the economy would roar back to life. 

However, the economic rebound is reversing, and Robinhood daytraders, who instead of sports betting, panic bought stocks, went all-in on DraftKings. 

Last month, we noted DraftKings’ insiders dumped $596 million worth of the stock into Robinhood panic buying. 

And it gets worse, Robinhood folks also panic bought Portnoy’s PENN. 

Investors are selling casino and sports betting companies as many misread the shape of the recovery, hoping for a “V,” evidence is coming out now that it’s more of a dead cat bounce as the recovery reverses.