Macau offers little refuge for gaming investors as Europe locks down again

A fresh wave of lockdowns appears inevitable in Europe, and they look like they could be especially severe in the United Kingdom with $13,000 fines for failure to self-isolate. These draconian measures could quickly spread throughout Europe. By most reports, Boris Johnson is about to close the country down again, and this on the verge of a final blowup in Brexit talks and no deal likely becoming inevitable in days. On top of this we have huge multi-trillion dollar scandals erupting out of UK systemically important banks HSBC, Standard Chartered, and Barclays, banks which were already in dire straits before this new bombshell.

Portending an imminent banking crisis, European commercial banks had a horrific day yesterday with the weakest showing the biggest declines on the day. Lloyds, a domestically-focused UK bank, is circling the drain and could be on the verge of being delisted from the New York Stock Exchange. Shares hit new all time lows yetserday at $1.17. Break the $1 handle and it could be delisted barring a reverse split. I can’t see how any of this can be interpreted as anything other than Europe coming apart at the seams.

A second lockdown in Europe is going to put the whole online gaming revenue surge angle into sharp focus. There are certainly economic forces directing revenue into online gaming thanks to lockdowns, but what I believe a second lockdown will show is that the surge will ebb as people become substantially poorer in real terms. While there could be another bump in online gaming revenue during this second lockdown, if we do see one I believe it will be a weaker bump than the first.

The biggest problem from an investment standpoint long term though is discerning a workable plan here. Locking down on every spike in cases is simply not workable, full stop. If COVID-19 is just another coronavirus like the common cold, which is a coronavirus, then it is probably here to stay like the common cold and we will keep seeing periodic spikes in cases every few months especially if lockdowns continue to slow or prevent herd immunity. Successive lockdowns means wholesale economic destruction with no end in sight. I simply do not see these conditions as even remotely investible. If gaming stocks keeps rising from here despite all this, I still have no interest in joining asset bubbles and certainly not advising others to do so. That would just be Russian roulette with your savings.