The year 2025 is off to a flying start. The fourth-quarter earnings season has begun. Initially, Wall Street analysts had dire predictions for the gaming industry. But as the reporting gets closer, the predictions become more positive. Thus far, we have only Las Vegas Sands (LVS) to use as a measure. LVS missed forecasts; its revenue and EBITDA were down year over year, but only slightly. LVS, with operations in Macau and Singapore, generated over $2 billion in revenue for the quarter from those two jurisdictions.
When asked about competition in Asia, LVS CEO Robert Goldstein said he wasn’t worried. “There are four billion people in the region looking for someplace to go.”
Next week, we will get a peek at other gaming companies. The Sands offers few clues, operating as it does in another world.
A second season is beginning, the 2025 legislative session. The national season began in Washington with lots of drama and theater. Little that has happened in the nation’s capital has any bearing on the gaming industry. The individual states have drama, the provincial version. In the outlying jurisdictions, bills will have an impact on the gaming industry and in time, one would suppose, on those quarterly earnings reports. Take New York.
New York state Senator Joseph Addabbo has introduced a bill that would authorize igaming. This is not his first bill on the subject and he hopes 2025 will be his year. It would seem to be a natural in New York. Mobile sports betting is very successful, generating over $100 million a month in revenue and $1 billion-$2 billion in handle. The state gets half of the revenue. Igaming would generate as much revenue and probably in time considerably more. However, there is some opposition. The most vocal at the moment is our old friend from the first paragraph, Las Vegas Sands.
LVS is one of the bidders for a casino license for New York City. It is promising to invest billions in its project, but the CEO is cautious. Goldstein fears the impact of igaming on an investment that large. “I believe in New York, that it’s a very strong market. However, in any market that has land-based gambling and sports betting, igaming seems inevitable. And so, sometime during the construction phase, you could be faced with igaming competition, which dilutes the value of the product. That’s our conundrum.”
New York is not the only state with igaming legislation pending. Hawaii, Indiana, Maryland, Massachusetts, New Hampshire, and Wyoming are in the queue. Virginia started to consider the idea, but hit the pause button.
From the industry’s point of view, igaming may be the biggest issue. But there are others. Alabama and Nevada are having a go at legalizing a lottery; it is a perennial in both states, blooming in each new legislative session.
Sports betting has just about run its course, now legal in 38 states and the District of Columbia. It could surface sometime during the year in California and Texas. In California, success depends on the tribes. Minnesota is in the same position. With tribes controlling gaming, sports betting could become a reality, if the tribes are satisfied. It follows the model of Washington and Florida.
The new year also has some “not-in-my-backyard” legislation. Iowa leads the parade on this one. The city of Cedar Rapids wants a casino and it has an operator. The other operators in the state object, saying it would cannibalize their casinos. The operators put pressure on the Iowa Racing and Gaming Commission, which was set on February 6th to review the issue. When it seemed the commission might indeed grant a license for Cedar Rapids, the opposing casinos turned to the legislature. That effort was partially successful. The Iowa House passed a five-year moratorium on January 30. The state Senate will take up the issue next. The outcome of the legislation in the Senate is far from certain.
The Indiana Senate had a similar issue on its plate. Full House Resorts, the operator of a casino in Rising Sun, Indiana, wants to move its license to a larger population center. One of its choices was New Haven. The proposal drew support from the city and the business community. It also drew very vocal opposition from citizens, which carried the day. After a hearing, the chairman of the Public Policy Committee pulled it from the agenda, stating he didn’t intend to hold a vote on the bill this year.
That is the way the year is shaping up for gaming. Specific casino legislation is meeting strong opposition. Igaming legislation is creating some serious debate, but no trend has surfaced yet. Sports betting might come up in California and Texas, but don’t bet on it.
There is another issue, skill games. They are on the table in several states, Missouri and Pennsylvania being two.
Simply said, the prospects for a casino in Cedar Rapids and New Haven are not good, nor for sports betting in California and Texas. That leaves igaming with a glimmer of hope for 2025.