Foot traffic in casinos measured by a Wall Street research firm rose nearly 5% year over year in November for the first time in three months, and is projected to continue that trend into 2025.
David Katz, an analyst with Jefferies Equities Research, said in a note to investors that while the firm’s monthly regional casino foot traffic analysis provides insights on visitation volume in key markets domestically, it also implies insight into revenue per visitor, which is up versus pre-pandemic 2019.
“In short, overall casino foot traffic in November included an extra weekend and was up 4.8% year-over-year, and down 12.3% versus 2019 levels,” Katz said.
This month’s traffic level is neutral to slightly positive for Boyd Gaming, Caesars Entertainment, Penn Entertainment, Churchill Downs and Monarch Casino & Resort, Katz said.
“We anticipate trends will continue to stabilize and potentially improve in 2025 as comps have started to ease versus prior-year levels,” Katz said. “Additionally, the street 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.”
Despite the upswing, key markets are still choppy, Katz said. In November, foot traffic in Ohio and Pennsylvania was up 4.2% and 7%, respectively, year-over-year. In Atlantic City, November volumes were 14.3% lower than 2019 levels and 1.9% higher year-over-year.
Illinois is running flat versus 2019 and saw a year-over-year increase of 22%.
“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.
Foot traffic in Detroit was up 70% year-over-year due to labor strikes last year at the city’s three casinos, while 14% lower than in 2019, Katz said. In Kentucky, several openings skew performance relative to 2019, although foot traffic was up 4.1% year-over-year and comparisons are seasonally driven rather than reflective of fundamental shifts, he noted.
November traffic in Black Hawk, Colorado was up 4% year-over-year, Katz said. He added that the comparisons provide limited insight, given the strength of the new entry in the market from Monarch.
“Although November foot traffic improved year-over-year for the first time in three months, most operators with properties in regional markets have seen mixed results throughout 2024,” Katz said. “Penn’s operations in regional markets, specifically in Illinois and Ohio where they operate a combined seven casinos, continue to be exposed to areas with high levels of competition.”
In addition, Katz said Boyd and Caesars generate 56% and 50% of property EBITDA in regional markets, respectively, and “therefore are exposed broadly.”
Katz expects Churchill Downs to see benefits from increasing productivity of new assets in Kentucky and Virginia, and is focused on initial results from the opening of The Rose Gaming Resort in Dumfries, Virginia, in late October.
“Overall, we anticipate that trends within regional gaming will continue heading into 2025,” Katz said.
