Jefferies Equity Research analyst David Katz has concluded that casino foot traffic is higher in 2024 than in 2023 and noted that revenue per visitor remains higher than in pre-COVID 2019.
Even so, foot traffic is 7.3 percent below 2019 figures, although 5.1 percent higher than last year. Katz deemed attendance “neutral to modestly positive” for regional heavyweights Caesars Entertainment, Boyd Gaming, Churchill Downs, Penn Entertainment and Monarch Casinos & Resorts.
Although May of this year lagged the comparable period of 2019, it was an improvement on January attendance numbers, which were 13.2 percent behind 2019. That month also saw severe revenue impairment that was widely attributed to harsh winter weather.
Katz anticipated continued stabilization of patronage throughout the balance of this year.
“The Street also remains on guard for the impact of macro trends on earnings levels, including higher costs for insurance, utilities and labor that have challenged markets unevenly,” he wrote.
Critical markets were described as still being “choppy.” Ohio casinos are 12 percent more heavily attended and Pennsylvania ones 13 percent so. Atlantic City has seen a 6 percent declivity from 2019 but a 5 percent increase from last year.
Illinois casino patronage is lagging 2019 by 10 percent but is 10 percent higher than in 2023.
“Our take is that the monthly performance reflects the ongoing normalization of traffic trends post-COVID, where volatility remains, as well as from competition in specific locations,” was Katz’s conclusion.
The widest spread was found in Detroit, whose three casinos were 15 percent ahead of last year but 16 percent behind 2019. One market that was ahead of the game was Black Hawk, Colo. It was seeing 10 percent more foot traffic than in 2019 and 8 percent more than last year.
Kentucky was found to have 10 percent higher traffic than 2019, but Katz cautioned that the results were skewed by casino openings of recent years and “comparisons are seasonally driven rather than reflective of fundamental shift.”
Katz attributed the heaviest exposure to Penn, as it has seven casinos in Ohio and Illinois. Behind it were Boyd and Caesars, which respectively drew 52 percent and 47 percent of their revenue from regional properties.
The analyst expected Churchill Downs “to see a similar impact from [Illinois and Ohio], while we also expect benefits from increasing productivity of new assets” in the Bluegrass State. As for its exposure in Virginia to gray-market slots, Katz decreed the effect of impending legalization to be “benign which is positive for CHDN.”
