A “return to growth in the challenged Las Vegas is not certain,” wrote Truist Securities analyst Barry Jonas in an investor note published January 13. He opined that the outlook for land-based casinos in the United States was otherwise “OK-to-good.”
Jonas noted that, despite macroeconomic worries, land-based casinos prospered regionally in 2025, possibly aided by customers trading Las Vegas visits in order to gamble closer to home. “While we’d never write off Las Vegas, we think the leisure challenges will overshadow a strong group outlook for a bit longer,” he added.
The Truist analyst thought some segments of the player base might be aided by recent Trump administration tax cuts, although not as much as from COVID stimulus money. He also felt that merger-and-acquisition activity would be the main vehicle for increasing the valuation of gaming stocks.
Terrestrially, Jonas liked Churchill Downs best. He felt that a slew of growth projects, plus the unique Kentucky Derby, would buttress the company.
By contrast, Jonas marked MGM Resorts International down from Buy to Hold. He wrote, “Despite undemanding valuation, our estimates are below the Street, as we think it may be too soon to confidently call a return to growth in 2026.”
Pivoting to igaming, Jonas noted that operators were beset by prediction markets and high taxes on online sports betting. “Higher taxes may be less of an issue in 2026, though we also don’t see much legalization right away,” he continued.
As for prediction markets, Jonas predicted an intensification in the clashes surrounding that controversial offering, which he said was “not without risks.” DraftKings and FanDuel would, he observed, be well positioned regardless of whether event contracts were to flourish or vanish altogether from the scene.
Gaming real estate investment trusts (REITs) were coming off a rough 2025, per Jonas. However, “We see more potential upside this year, as a stable/improving rate/capital market environment should facilitate more accretive sale leasebacks as we think operators likely use some form of M&A to try to right size their own valuations.”
Vici Properties, Jonas noted, was undergoing some drama with Caesars Entertainment over a strapped regional master lease. He opined that “a creative win/win solution could help both companies and perhaps the wider sector.”
Even so, Jonas favored rival REIT Gaming & Leisure Properties, due to its growth pipeline and balance sheet. He allowed that Vici might also outperform, contingent on improving Wall Street’s mood about the Caesars lease. He kept Buy ratings on both stocks.
Finally, turning to business-to-business gaming providers, “2025 saw this sub-sector shift from traditional slot manufacturers (many taken private) to more digital providers.”
Jonas was bullish on providers of data for sports betting, citing their “strong growth outlook and lower earnings volatility.” To that end, he kept Buy ratings on Genius Sports and Sportradar, perceiving “outperformance again as both companies execute on their investor day EBITDA targets.”
Jonas allowed in conclusion that he still favored “gaming tech as it appears land-based casino operations are being led via gaming vs. non-gaming, which makes strong content even more important.”
