Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Will igaming be legalized in Virginia?
David Katz of Jefferies on February 22 wrote about state legislatures that are debating gaming regulation:
“States across the U.S are considering additional gaming legalization. Notable progress in Virginia (the Senate and the House have passed a bill) has drawn attention, given the recent capital spending in the state by Boyd, Churchill Downs, and Caesars. … The introduction of igaming is likely a near-term negative for land-based incumbents (GGR drops -3.5% on average in the year following implementation), but we flag that legalization is far from a guarantee in the state. Note that the Virginia governor (Abigail Spanberger) has publicly expressed her priority to create a gaming commission before progressing these bills. Our view remains that operators should include a defined igaming strategy to support a long-term growth pipeline.”
GLPI estimates on high end
Gaming and Leisure Properties was the subject of Truist Securities’ Barry Jonas’ analysis February 20:
“Q4 adjusted funds from operations beat our and the Streets estimates by +1% and GLPI introduced 2026 guidance which was also ahead of us/Street at the midpoint. The Twin River sale-leaseback has finally been completed, although at an adjusted purchase price of $700 million (previously $735 million) but the same cap rate. Looking ahead, GLPI maintains a solid pipeline of ~$1.9 billion in remaining commitments and could see increased deal flow especially if rates continue to trend lower. We flow through the beat and take our estimates to the high end of the range given GLPI’s historical conservatism and consistent execution. Reiterate our Buy rating and price target.”
Caesars EBITDAR might be profitable in 2026
Macquarie’s Chad Beynon on February 18 looked at Caesars’ fourth-quarter results.
“Caesars’ 4Q EBITDAR of $901 million (+2% year-over-year) exceeded Virginia consensus by 1% with brick-and-mortar falling in-line, while digital beat by 11%. In Las Vegas, leisure trends continued to improve sequentially but remain soft on a year-over-year basis, which was partly offset by strong group/conventions (as expected). 4Q Las Vegas EBITDAR declined 7% year-over-year and management expects similar trends in 1Q but sees the segment returning to growth in 2Q (spurred by the State Farm conference) and potentially in 2H if the leisure consumer recovers.”
David Bain of Texas Capital Securities also looked at Caesars
“Overall, 2026E should mark Caesars’ first EBITDAR growth year since 2023 and we see 2026E Street estimates as ‘reasonable.’ We believe Caesars’ historic low valuation augments in 2026 driven by Las Vegas growth, continued regional stability/growth, significant digital growth and a lower interest rate environment. Despite few changes to our forecast, we lower our price target to $44 reflecting lower industry valuation multiples on digital, though digital valuations could revert higher over the intermediate-term, in our view.”
