Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
G2E reflections
Barry Jonas of Truist Securities, in an October 10 note, reviewed findings from last week’s Global Gaming Expo in Las Vegas.
“With more limited opportunities on the manufacturing front, 2025’s G2E show saw more U.S. investor focus on operators/digital/REITs,” Jonas wrote. “The hottest topics included prediction markets, Las Vegas Strip trends, regional promos, and REIT opportunities/lease dynamics. With a lot of noise in the industry in recent months, we see many of our Buy rated stocks primed for recovery/upside into 2026, including Churchill Downs, Red Rock Resorts, Flutter, Genius Sports and SportRadar.”
More from G2E
David Katz of Jefferies on October 12 reported that prediction markets were a focus of most discussions at G2E.
“While legal processes are likely longer term, operators, states, leagues, and tribes are likely to drive regulatory solutions, most likely igniting new OSB regulation,” Katz wrote. “Meanwhile, strip operators including Caesars/Golden confirmed 3Q weakness was fulfilled while long term growth trajectories for regional players like Red Rock Resorts/Churchill Downs is supported by tax changes and management teams with successful histories of executing capital projects. For suppliers, the trends appear mixed as newly private operators focus on operational improvements while public peers continue taking share in multiple verticals.”
DraftKings possibilities
Dan Politzer of J.P. Morgan on October 10 looked at DraftKings’ prospects.
“We are lowering our 3Q25E adjusted EBITDA to -$145 million, down from our prior $36 million, with revenues of $1.13 billion 18% lower vs our prior $1.37 billion,” Politzer wrote. “Our lowered estimates primarily reflect customer friendly September NFL outcomes, and secondarily, higher expenses relating to DraftKings’s popular Ghost Leg parlay promotion. Our 4Q25E adjusted EBITDA estimate for $423 million is little changed, but we conservatively tweak lower our FY26/27E adjusted EBITDA estimates by 3-4% to reflect higher than previously forecast promotional expense (player retention/ongoing competition). We continue to like DraftKings here, and while we recognize the stream of prediction market headlines makes it tough for the stock to work near-term, we do think if/when DraftKings (or its peers) enter prediction markets, sentiment could improve.”
