Coming off a mid-June trip to Las Vegas, Truist Securities analyst Barry Jonas found operators in an upbeat mood. He vouchsafed his Vegas experience in a June 15 investor note.
Coming off two “challenging” years, Jonas said, casino operators were sounding more optimistic, spurred by easier year-over-year comparisons ahead. He added that the sentiments were in line with those of recently surveyed Vegas travelers. The only operator concern was that August hotel rates would be soft.
One company that has tried all-inclusive pricing at some casinos, MGM Resorts International, reported positive early auguries. “One-third of all purchasers thus far are new to the MGM Rewards database and the program is helping lower-end properties, with the Excalibur buffet the most frequently visited food location,” Jonas reported.
The analyst said he would keep a watch on more such promotional activity. He cited the example of Fontainebleau, which recently rescinded resort fees through December 31.
MGM bosses stated that the all-inclusive strategy would be ongoing and that lower-end trade appeared consistent, while high-end business remained a strong point. “Reception around the MGM Grand room remodel has been very positive,” Jonas wrote, adding that the revamped rooms have been hard to monetize, as they came back on the market at a time when average daily rates had softened.
“For the upcoming Hard Rock property, management noted the Seminole Tribe’s extensive player database should be helpful to grow the overall Strip market once the new property open,” Jonas continued. MGM executives found that average Las Vegas visitors played at three casinos per trip. Consequently, they saw an opportunity for MGM and were planning to capitalize on the Hard Rock Las Vegas debut.
As for MGM’s pool of regional properties, execs said they were interested in having only market-leading casinos. That said, they were not interested in parting with them for any less than “the right price.”
Non-MGM, non-Caesars Entertainment executives were said to be taking a wait-and-see attitude on the leveraged buyouts in progress at both companies. Jonas found, “Competitors didn’t see any reason that one/both being taken over would lead to malaise/easier temporary competitive dynamics if management teams remain in place.”
Executives thought it possible that the Federal Trade Commission would impel some casino divestitures. If so, operators with a mind toward acquisitions saw potential opportunities. No one with whom Jonas spoke thought that either buyout wouldn’t pass regulatory muster.
Core play for locals casinos was found to remain potent, tourist play (for those same casinos) less so.
“Higher gas prices have had limited impact thus far, but operators were wary as to the effects of what sustained higher prices could bring,” especially to lower-tier players, Jonas said. Both Boyd Gaming and Station Casinos professed themselves pleased with capital reinvestments on existing properties and said they would look to drive return on investment (ROI) that way in the future.
Gas prices weren’t impacting local players yet, according to Station CFO Stephen Cootey. He told Jonas, “Player bases continue to be strong, though [Station’s] national business is slightly down. Management believes this is attributable to higher jet fuel/flight prices, but also having some luxury room demand at Green Valley Ranch out of service for construction.”
Cootey expected typical seasonal business to return during the spring months, with revenue descending as much as nine percent. A strong second quarter of 2025 was dismissed as an aberration. The end of the school year and the migration of locals away from hot weather were forecast as drags on 2Q26.
Several Station casinos were said to be feeling the effects of construction upheaval, “though we think Durango may be faring better than initially expected given strong high-limit performance and better labor management,” Jonas opined. Cootey told him that Station was confident it could reach its ROI targets, if not by the end of 2027, however.
Station remained undecided on its next development, pivoting between Inspirada and Cactus Lane (near South Point). “Inspirada would be a smaller project in a less populated area with more limited competition, while Cactus would be a larger project in a more populated area and a higher level of competition,” Jonas said. Either one would take 18-24 months to build, especially Cactus Lane. That done, it would take three years for the market to absorb the new capacity, Station forecast.
Amir Markowitz, vice president of corporate finance and investor relations for Boyd, met with Jonas as well. He told the analyst that Boyd’s temporary casino in Norfolk, Virginia, was roughly breaking even and that its permanent successor was on track for a late-2027 debut.
“Cadence Crossing opening has trended in line with company expectations with encouraging visitation and revenue since opening,” Jonas reported. Elsewhere, Markowtiz reported familiar phenomena: soft destination business at The Orleans, construction disruption at Suncoast, and healthy locals business everywhere else. Jonas opined that Boyd could grow cash flow, particularly once Cadence Crossing marked its first anniversary, along with an end to construction at Suncoast.
Foot traffic at Boyd’s downtown Las Vegas casinos was reported to be perceptibly lighter, save for continued resilience from Hawaiian players. Said Jonas, “Given the surge in airfare, Boyd is watching that dynamic closely.”
