Las Vegas’s loss is the regional casino operator’s gain. That was one of the messages that came out of the 15th annual Bank of America 2025 Gaming, Lodging & Leisure Conference in New York City.
The conference hosted 34 management teams that included Penn Entertainment, Caesars Entertainment, MGM Resorts International, DraftKings, and BetMGM.
Regional operators were consistent in their appraisal of the regional consumer as healthy and that properties can benefit from providing value to those staying closer to home, according to B of A analyst Shaun Kelley.
“Overall, it seems like the regional consumer is stable or good in most markets,” Kelley said. “The recent improvement in unrated play appears to be continuing into the third quarter, while 2026 could see less new supply.”
That compares to Las Vegas, where visitation has been impacted by weak drive-in customers from neighboring states, the Spirit Airlines bankruptcy, and weak Canadian and overseas travel.
“Any recent improvement sounded modest, but there’s optimism for the fourth quarter, given the event and group calendar,” Kelley said. “MGM pointed to recent initiatives to improve the value messaging for Las Vegas (both branding and select pricing), while Caesars is leaning into its database.”
The digital companies sounded confident in their products going into the NFL season, Kelley said. DraftKings highlighted better than expected progress in driving parlay mix, while recent new products like stacks and ghost legs should keep momentum going. They also see further opportunity to control fixed costs with AI.
BetMGM and Caesars have improved their apps significantly, allowing more focus on customers and personalization and less on product catchup, Kelley said.
Operators with land-based exposure were cautious about prediction markets. In igaming, operators continue to see above-market growth, with DraftKings noting an opportunity to narrow the gap between its strong table-game share and its current slot share.
“Consistent with messaging in the second quarter, we think DraftKings is focused on increasing casino-first play,” Kelley said. “Management highlighted the material gap between their current table and slot shares, with room to focus on marketing and merchandising for the slot-oriented customer across both their DraftKings and Golden Nugget brands. Management still feels confident in 30%+ EBITDA margins. To offset increasing state gaming-tax rates, DraftKings sees material opportunities for fixed cost control through deployment of AI tools.”
Earlier this year, BetMGM refined their sports strategy to focus on the premium mass segment. That has enabled them to optimize their promotion and reinvestment rate and they seem driven by ROIs and long-term value, Kelley said.
Week One of college football was the highest revenue-generating week for BetMGM, despite NFL and NBA not in season yet, Kelley said.
“Assuming a stable tax environment, it seems like BetMGM still thinks 30% EBITDA margins are attainable, but getting there might take longer than initially expected. It’s our sense that when BetMGM reaches their goal of $500 million in EBITDA, margins will be mid-teens.”
Penn management believes they’ve closed the competition gap, Kelley said. ESPN Bet’s Fan Center integration is a big focus and can offer parlays personalized to a user’s fantasy football lineup. “Our sense is Penn and ESPN will likely remain in active dialogue about their partnership as we approach the three-year anniversary next August,” Kelley said.
Caesars management sounded “very confident” in their product, noting that every NFL game this season will have 175 markets compared to 50 last season, Kelley said. The incremental markets are driven by increased live-betting offerings, specifically live same-game plays.
“While Caesars has publicly said they are exploring optionality for digital, we think they realize the importance of the companywide rewards program and benefits to an omnichannel approach,” Kelley said.
When it comes to regional casinos, Penn management highlighted the value of regional gaming, using the example that a $10 hand of blackjack still costs $10 and the entertainment value hasn’t changed.
Penn is investing in growth-capital expenditures, including their recently opened land-based casino in Joliet and other ongoing projects in Aurora, Nevada, Columbus, and Council Bluffs, Kelley said. “Early Joliet trends sound encouraging, with more new customers visiting than anticipated. We think project capex will decline year-over-year in 2026. Management is also committed to returning capital to shareholders and plans to buy back $350 million of shares this year. We raise our Penn price outlook to $21 from $18 to reflect improved regional trends.”
As for Caesars and its regional properties, Kelley talked about consumer stability, improvement in unrated play, and rated play remains good.
As for Las Vegas, Kelley admitted summer softness, though trends are improving through the quarter and September should be the best month.
“Caesars still sounds optimistic about the fourth quarter, driven by a strong group and convention calendar and improving leisure trends,” Kelley said.
