Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Truist Securities recently hosted an investor trip across several Gulf Coast gaming markets, including Lake Charles, Baton Rouge, New Orleans and Biloxi. Analyst Barry Jonas, writing April 3, noted “our takeaway is that any impact from an unfavorable macro environment has been limited with most operators generally noting consistency and resiliency.” Jonas added that “Very few properties we visited spoke to any impact from macroeconomic uncertainty. The only notable softness appears to be with more value-oriented, lower-to mid-tier customers in select (but not all) markets.”
In a note released April 3, Jeffries analyst David Katz, commenting on sports betting, noted progress toward profitability and returns for operators, “which increases the Street’s focus toward the group. First, Rush Street International indicated it would be exiting its sports betting agreement with Connecticut because the minimum payments required were driving losses based on the lower than expected volume,” Katz wrote. “Second, GAN indicated it would be exiting its efforts in Ontario and its SuperRGS business because it does not see a path to appropriate ROI.”
J. P. Morgan analyst Joseph Greff indicated in an April 2 note that Macau’s gross gaming revenue in March was “up 23% sequentially and 247% year-over-year MOP $12.7 billion – we note the easy year-over-year comparison, so we see the better-than-expected sequential gain as more relevant in assessing/gauging the market’s (still) nascent recovery.” Greff also wrote that “we think Macau stocks have the best risk-reward of anything in our coverage universe. So, we are buyers of Wynn, Melco Resorts and Entertainment, MGM and Las Vegas Sand, each rated overweight.”