Following a difficult February, Macquarie Securities analyst Chad Beynon reported, “It appears that consumer behaviors in March returned to stable or even healthy levels.” His findings came on the heels of Macquarie’s 10th Annual Consumer Bright Ideas Conference, attended by a score of companies.
Beynon described himself as “cautiously optimistic regarding the domestic consumer.” His findings were based on a matrix of factors that included declining savings rates, rising credit card delinquencies, and high interest rates. Even so, “We didn’t walk away with any alarming takeaways.”
The gaming group, Beyon said, historically outperforms during times of declining interest rates. This, he argued, could give casino companies a second-half lift during 2025.
On the Las Vegas Strip, casinos were “cautiously optimstic” that they could and would grow cash flow this year. He cited January casino grosses ($840 million), above-average hold rates for slot machines and baccarat, and a six percent increase in revenue per available room.
Metrics were also positive for igaming, which Beynon said is heading for 23 percent revenue growth in the first quarter of this year. For one thing, hold percentages have increased from eight percent in a lean fourth quarter of 2024 to 9.9 percent. Igaming handle is up 10 percent so far.
Beynon predicted that BetMGM and Caesars Digital would be the biggest beneficiaries of igaming growth. “We still believe there could be positive igaming legislation in the next 12 months, although this is not in our estimates,” he added.
Turning to suppliers, Beynon wrote, “Tariff risks don’t appear to be a major concern.” He said that premium-priced/recurring-revenue machines would be investors’ focus this year, given flat prospects for sales.
The analyst went into detail regarding eight companies, especially Light & Wonder. He wrote that LNW is on pace to achieve $1.4 billion in cash flow, “with tailwinds across all verticals.” It still has 10,000 Dragon Train units deployed across Australia, although Beynon conceded there would be “lingering noise” from United States litigation in the first quarter of 2025.
Having changed development studios, Light & Wonder will be releasing a second iteration of Dragon Train in August. Beynon also looked forward to the launch of Huff ’n Puff and to Light & Wonder’s exit from live-dealer igaming, which he opined would improve margins.
Of Illinois-centric Accel Entertainment, Beynon noted that its “asset-light cash flows are more stable and recurring in nature than brick-and-mortar casinos.” However, Accel is going into the brick-and-mortar business with its Fairmount racetrack acquisition. The company expects to open a temporary Fairmount casino in the second quarter of this year. The permanent casino to follow is slated to feature 600 slots, 24 table games, and a FanDuel sports book.
“The Louisiana route market is highly fragmented with limited additional licenses available,” Beynon observed of Accel’s newest territory. He forecast 2025 revenues of $25 million, plus $6 million in cash flow.
Noting that lotteries are historically recession-resistant, Beynon said of IGT, “The core recurring business remains healthy and growing in line with expectations.” The company expects $40 million to $50 million less jackpot activity in 2025, along with the retirement of $2 billion in debt, using the sale proceeds from its gaming and digital businesses.
IGT also anticipates spending $850 million on upfront fees for its lottery business in Italy. The company predicts it will spend as much as $450 million to secure further lottery contracts in Italy, as well as in Texas and Nevada.
One pure igaming operator, Rush Street Interactive, showed up. Beynon reported that it “continues to see strong momentum following an impressive 2024 that saw the company post records for revenue, profitability, cash flows, and users.”
Beynon noted that RSI is effectively defending its U.S. market share, as “they continue to acquire players more efficiently as marketing spend moderates.” RSI executives guided attendees to almost $1.1 billion in 2025 revenue and cash flow of as much as $135 million, despite a double-digit value-added tax in Colombia, a key RSI market.
Igaming provider Inspired Entertainment was said to be “seeing strong growth and momentum in its high-margin Interactive business, powering the transition to a more digital company.” To that end, it has increased its interactive cash flow to 22 percent of the total, heading toward 60 percent.
“Additionally, we believe the company’s Hybrid Dealer product, which we view as a low-cost (no physical studios or dealers) alternative or complement to Live Dealer, could have real potential,” Beynon wrote. He added that it had Hybrid Dealer contracts with BetMGM, Bet365, and Caesars Digital.
On the terrestrial-gambling front, Inspired has introduced its Vintage cabinets and is trying out a new portrait cabinet in Illinois. “While we are encouraged by the results and mgmt’s execution,” Beynon hedged, he was staying with a Neutral stock rating, due to flat 2025 cash-flow prospects.
Gambling.com was reported “to be a standout performer in the affiliate space with strong momentum, a growing portfolio of complementary businesses, and a model that benefits from ongoing igaming strength.” Beynon modeled a $14.5 million cash-flow enhancement from the recently closed purchase of Odds Holdings, with more growth possible as sports betting goes live in Missouri.
One casino-centric REIT was present, Vici Properties. It “remains confident about the strength of underlying demand trends in Vegas and the pipeline of deal flow … but acknowledged that the current environment has created low visibility.” Nevertheless, Vici hopes to spend up to $50 billion on casino purchases in 2025. Beynon looked for it to diversify into “health and wellness, amateur and professional sports, family entertainment, theme/holiday parks, and other destination-based experiences.”
Largest of the brick-and-mortar operators in attendance was MGM Resorts International, but it stated that its 2025 focus will be on digital performance. Management guided to as much as $2.5 billion in revenue, along with “reducing marketing costs and driving higher margins through initiatives like single-game parlays and omni-channel capabilities.”
In Las Vegas, MGM said it’s seeing less seasonality of casino play and “strong demand,” especially during the first quarter of 2025. The company expects to achieve at least $150 million, perhaps $200, million in cost savings, whether through job cuts or fee increases.
In Macau, “MGM is maintaining its mid-teens market share, benefiting from its focus on premium mass customers and technological advantages,” Beynon reported. It’s also focused on adding museums and additional entertainment to diversify visitation.
Executives of Penn Entertainment predicted a “more frictionless experience” of ESPN Bet and higher market share for the controversial betting provider. It will continue to lose money in 2025, as management projects as much as $200 million in red ink, assuming a nine percent hold on wagers. Beynon predicted a $500 million positive return on investment in 2026.
Penn’s new Joliet casino is set for a fourth-quarter debut, with new projects in Aurora (Illinois), Columbus (Ohio), and M Resort (Las Vegas) to be rolled out during the first half of 2026. Executives “noted that casino consumer remains stable with cost inflation starting to abate as well, but noted some weakness in 1Q from weather, calendar shifts, and new competition in Nebraska and Louisiana which should get lapped later this year.”
Top brass of Full House Entertainment “showed optimism with all the focus on the potential from its two new flagship properties,” American Place and Chamonix. Part of the optimistic outlook involves Chamonix’s new management team, as well as growing market share, despite the lack of targeted marketing heretofore for the resort.
As for its Waukegan casino, Full House execs forecast a doubling of the temporary American Place’s revenue. They plan to begin construction later this year, with a budget of $300 million.
Beynon’s meetings with another small operator, Century Casinos, were “mostly constructive, with its two major capex projects in Missouri now complete, performing well, and attracting many more customers from further distances.” Improvement in cash flow is projected for this year, despite softness at the low end of Century’s customer base, a significant problem for its Colorado and West Virginia casinos.
“This has contributed to more tapered expectations for 2025 relative to what was expected one year ago,” Beynon observed. However, Century’s Nevada acquisition, the Sparks Nugget, was said to be fully paid for and now focused on cost efficiency. “Overall, we expect returns from growth initiatives will take time to ramp up and could be offset by ongoing weakness with uncarded play,” Beynon cautioned.
Overseas, Century is still intent on divesting its assets in Poland. These include the casino in Wroclaw that it recently reopened.
“With one of the strongest balance sheets in gaming and full ownership of its properties, we continue to recommend [Golden Entertainment] as inexpensive exposure to the healthy and growing southern Nevada gaming region,” Beynon glowed. He allowed that Golden has been negatively impacted by the election and Formula One, but December and January were better.
Seven taverns newly added to the Golden portfolio were said to be seeing some adversity, as Golden redid management and investment strategy. However, those same taverns were said to be experiencing cash-flow growth and Golden pointed to expected sequential revenue growth from that division.
“Positively, management also highlighted better trends in the customer database particularly in the locals market, as well as a rational promo environment,” Beynon concluded. “Management remains highly focused on exploring strategic alternatives to maximize shareholder value.”
