Trends in Las Vegas are ascending, according to J.P. Morgan analyst Daniel Politzer in a July 15 investor note. But that may not help Caesars Entertainment or MGM Resorts International, he added, as their stocks are currently being driven by events, an apparent allusion to buyout attempts currently underway.
Politzer was less sanguine about Macau, where second-quarter gambling revenue was flat and volume was 83 percent of 2019 levels, a setback from the previous three quarters. He blamed the downturn on lower premium-level action and the distraction created by the World Cup tournament.
The analyst also noted softer consumer-spending trends in China proper, where May retail sales were down for the first time in four years. Still, he said Las Vegas Sands’s strength in Singapore could push it past Macanese adversity.
Even so, the three stocks Politzer liked best were regional-facing Penn Entertainment and Churchill Downs and online-only Rush Street Interactive. He felt Penn had “gas in the tank,” thanks to recent capital projects. Potential asset sales by Churchill Downs also were to Politzer’s liking.
Regional gaming was perceived as coming off a healthy April and May, fueled by tax refunds. June was admittedly “more subdued,” while Las Vegas locals were said to be tracking flatly, albeit from record levels in 2025. United States consumer confidence was described as “fragile,” as gasoline prices were 15 percent down from recent apogees.
Digitally, RSI was seen as having traction, with its igaming revenues up 27 percent versus the larger online industry’s 15 percent growth. Here, the World Cup was seen as a boost. Citing unfavorable hold, Politzer urged caution on DraftKings and Flutter Entertainment (corporate parent of FanDuel), predicting a marked spike in revenue in the fourth quarter of 2026.
Online sports books were battling adverse hold, it was reported, partly reflective of World Cup play and the New York Knicks’s championship drive (with hold falling as low as 5.2 percent in New York state). Although handle grew faster, thanks to the World Cup, Politzer said, it remained to be seen whether this could be sustained into the resumption of NFL and NBA play.
The World Cup was also good for prediction markets, according to Politzer, with DraftKings obtaining as many as 400,000 new customers through event contracts. FanDuel was faring less well, Politzer speculated, and might have spent less than the $70 million it had budgeted. “Market making will likely be topical and could help … but [it is] unclear how impactful it was during the 2Q,” the analyst wrote.
Given the events buffeting the share prices of MGM and Caesars, Politzer felt that Vegas fundamentals were less important at present. He believed second-quarter gambling revenue could be close to 10 percent higher, while revenue per available room may have increased by a modest amount.
Politzer forecast that MGM would report second-quarter cash flow of $733 million, two percent ahead of Wall Street’s consensus. As for Caesars, it would hit Wall Street’s $456 million prediction, while Wynn Resorts would come up two percent short at $213 million. Regional operators were also forecast to come in ahead of projections by one to two percent.
Given current events in gaming, Politzer opined that the focus of second-quarter-revenue reports would be on further mergers and acquisitions, spurred by the MGM and Caesars buyouts. He also felt the Barry Diller- and Tilman Fertitta-led takeover attempts would heighten the competitive and promotional environment.
Other potential topics of discussion were predicted to be the impact on Penn of a quartet of recent project openings, the effect of new Cadence Crossing on Boyd Gaming, and the upshot of capex projects at Station Casinos, including Durango Resort, Green Valley Ranch, and Sunset Station. Consumer confidence and the impact of the World Cup were also likely to be on the docket, Politzer felt.
