Regional casinos appear to be “the best house in an unloved neighborhood.” That was the opinion of Truist Securities analyst Barry Jonas, as expressed in a July 20 investor note.
Jonas predicted that Monarch Casinos & Resorts and Penn Entertainment would both beat earnings projections. By contrast, Las Vegas locals casinos casinos were said to be dealing with short-term “idiosyncrasies,” but Station Casinos could outdo expectations, which Jonas thought were too low.
On the Las Vegas Strip, improved trends were seen for MGM Resorts International. However, Barry Diller’s takeover attempt would remain the focus, Jonas said, and set the price for the stock. Online gaming operators were seen as buffeted by unsteady sports betting performance and the incursion of prediction markets.
Returning to the subject of regional casinos, Jonas wrote that the sector continued to have potency, “as operators power through all the macro noise including elevated gas prices and high inflation.” He pointed to a quarter that saw an average of four percent growth monthly.
“It’s hard to put our finger on why trends are so positive lately, but tax refunds were up,” said Jonas, quantifying the cash influx at $325 billion. He saw that as an offset to spiking energy costs and cautioned that “the macro remains uncertain and it could be optimistic to think this regional momentum will hold indefinitely.”
No regionally focused majors were seen as coming under projections. Monarch was forecast to exceed cash-flow predictions by two percent, with one percent outperformances coming from Penn and Boyd Gaming, with Churchill Downs right on the money.
For Penn, “Joliet continues to meaningfully outpace our expectations though we would expect revenues to flow through at a lower margin given typical ramping costs.” With new Hollywood Aurora up and running, additional growth was seen ahead for the company.
In the case of Churchill Downs, a strong Kentucky Derby performance was said to make up for competition-hampered results in Virginia, where a new Cordish Gaming casino has cut into several markets. Churchill Downs’s Kentucky casinos were another bulwark for the firm. Jonas positioned the company as a potential takeover target, saying that a flurry of mergers and acquisitions could result in pickup opportunities for Boyd, as well as for Monarch.
Nor was Caesars Entertainment left out of the regional success story. Jonas noted that a potent bowling-event schedule in Reno was at the company’s back. Even Vegas-focused MGM “was solid [regionally], more than offsetting some continued though mild softness seen at National Harbor. “
Jonas discerned improvement on the Strip, observing that gross gaming revenues were up 10 percent, despite flat visitation to Sin City. Revenue per available room was up four percent.
“Looking under the hood, we think the K-shaped dynamic is still very prevalent with high-end operators shouldering the load,” Jonas observed, adding, “we are also seeing signs of softness in August from our proprietary room survey.” Even so, he said he still felt good about Strip prospects, saying that he never expected a “hockey-stick recovery.”
Although Truist’s sample of Las Vegas room rates showed two percent improvement, high-end rooms were up 10 percent. Looking ahead, Jonas characterized July as choppy and noting a 16 percent plunge in August.
“Still just talk” was Jonas’s dismissal of the Diller-led MGM takeover, noting that its Strip cash flow was on track for growth. He wrote, “We view the company as best-in-class but see some near-term cost pressures in Vegas with its recent property enhancements (e.g. Zero Bond) on top of construction disruption.”
As for Vegas locals, Jonas observed that both Boyd and Station appeared modestly down so far in 2026, but Station was faring well through construction-related upheaval. Boyd’s destination-market business was seen as soft still and Jonas’s estimates for its earnings remained the same.
Two stocks bearing the brunt of Wall Street’s wrath were DraftKings and FanDuel parent Flutter Entertainment, tumbling 28 percent and 50 percent across 2026. But Jonas saw prediction markets ceasing to be a menace and turning into a chance for both to prosper.
“There are still a litany of question marks around prediction, including potential investment size, ROI expectations, and ongoing legislative processes before a near-certain ending in the Supreme Court,” Jonas wrote. But he stuck with Buy ratings on both stocks, saying that they owned online leadership and technological superiority in the gaming sphere.
Jonas summarized, “But given another quarter of customer friendly results, World Cup marketing costs and prediction investments, we expect both to maintain but highlight back end dependent guidance, which will still be subjected to volatile football outcomes.”
On the subject of gaming-focused real estate investment trusts (REITs), Jonas was of the mind that they had yet to benefit from all the M&A talk. But “We still could see increasing M&A in the space driven by either regulatory or strategic positioning” and Vici was expected to get a boost from the Fertitta buyout of Caesars. He added, “While the regional [Caesars] lease challenges may need to be addressed at some point, we don’t think management will accept any scenario where its dividend is cut.”
Gaming & Leisure Properties’s rent exposure was said not to be a big as Vici’s and it had many other strings to its bow, including potential diversification into tribal casinos. Jonas said he was still upbeat on REITs, liking their stability.
In the manufacturing sector, Jonas noted that Light & Wonder shares were down 29 percent. By contrast, main rival Aristocrat Leisure had staged a rally, up six percent so far in 2026.
For Light & Wonder, the stock market was “likely not appreciating how hard it is to replicate the ‘special sauce’ that goes into slot machine development—not to mention the regulatory barriers to entry.” Yet Jonas lowered his Light & Wonder forecast by as much as three percent, cited a challenged social-casino market which was feeling the effects of event contracts.
One company that was said to be feeling no pain was Accel Entertainment. Jonas opined that Illinois slot routes were propelling it, as revenues rose six percent in the second quarter so far. Given the uncertainty surrounding Pennsylvania “skill games” and possible slot routes in Chicago, Jonas stayed with a Hold rating and price target of $14 per share.
