Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Truist Securities analyst Barry Jonas May 31 wrote that “gaming win on the Las Vegas Strip rose + 11% year-over-year, though Locals fell -2% with weakness largely concentrated in the balance of Clark County (more meaningful for Red Rock Resorts). Strip revenue per available room/average daily rate data ticked down modestly (-2%/-3%) given tough year-over-year comparisons, though STR, Inc. data shows a return to growth in May. Net-net, we think the results were generally in line to positive. Questions around macro headwinds and tougher comps remain, though this is balanced by a very strong event calendar into Q4/Q1.”
A note by J. P. Morgan’s Joseph Greff May 31 reported that Macau’s gross gaming revenue grew +6% generating MOP15.6 billion in May. “On a per day basis, this implies a strong MOP500 million/day+ level, reflective of a strong continued recovery, both during the Golden Week holiday to begin the month and a decent level of GGR post the holiday, when there is traditionally a post–Golden Week slowdown. … Overall, this is an encouraging monthly result, and we believe it’s supportive of our positive thesis on Macau’s encouraging recovery since Macau and China effectively reopened since early January.”
Analyst David Katz of Jeffries May 29 wrote that there is “positive read-across to European coverage from the recent bid for NeoGames by Aristocrat — with the implied valuation for Playtech’s B2B division currently just 3.6x EV/EBITDA versus 15x for the NeoGames take-out multiple. We further note the sale by PointsBet of its U.S. enterprise to Fanatics for $150 million, which highlights the increasing focus on generating profits and returns with the alternative being consolidation. In short, we expect to see more deals among smaller players in the U.S. market.”