In studying January 2025 casino visitation, Jefferies Equity Research analyst David Katz came to the conclusion that it was flat compared to 2024 and 13.6 percent down from 2019’s pace. His findings were published in a February 10 investor note.
The bright side of Katz’s research was that incremental revenue per visitor was actually slightly higher than in January 2019. He opined that his data was neutral to slightly negative for Boyd Gaming, Churchill Downs, Caesars Entertainment, Monarch Casino Resorts, and Penn Entertainment.
As in January 2024, “Bad weather negatively impacted performance during the month.” Boyd casinos saw a 9.3 percent sag in foot traffic.
“We anticipate trends will continue to stabilize and potentially improve in 2025, as comparisons have started to ease vs. prior-year levels,” wrote Katz. However, he warned of higher costs for casino insurance, utilities, and labor impinging upon performance.
“Key markets still choppy,” was the headline on a section of his report. He pointed to Ohio and Pennsylvania, where foot traffic was down 3.5 percent and 3.8 percent, respectively.
Atlantic City slumped seven percent in visitation compared to early 2024 and 11.5 percent down from 2019. Illinois took an even worse hit, off eight percent from 2019 and 12.9 percent lower than last year.
Detroit saw a year-over-year increase of 3.8 percent, but the pandemic had changed visitor habits drastically, as Motown gambling halls experienced a 30.6 percent plummet from their headcounts of 2019.
“Our take is that the monthly performance reflects the ongoing normalization of traffic trends post-COVID, where volatility remains, as well as from competition and renovations in specific locations,” Katz said of key markets.
Too many recent casino openings in Kentucky prevented a solid comparison with 2019, but this January found business 2.3 higher in terms of patronage. In Colorado, the Black Hawk market saw a 2.4 percent dip, despite what Katz lauded as the strength of Monarch’s expanded resort.
Coming off a weak December, Katz said, casinos were seeing a customer market consistent with what they’d experienced for the preceding year. He noted that Penn’s casinos, especially in Illinois and Ohio, “continue to be exposed to areas with high levels of competition.”
Caesars, which draws half its revenue from regional casinos, and Boyd (which is 56 percent reliant on provincial casinos) were described as “exposed broadly.” Churchill Downs, on the other hand, was anticipated to see revenue growth from its new Kentucky and Virginia gambling outposts.
“More specifically, we’re focused on initial results from the opening of The Rose Gaming Resort, which appears to be off to a slow start,” Katz cautioned of Churchill Downs’s newest casino. He concluded that, in the main, existing trends in regional gambling would persist into the 2025 fiscal year.
