Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Gaming industry overview
Dan Politzer of J.P. Morgan on June 26 released an overview of gaming stocks:
“Macau was one of the more debated areas of our coverage,” Politzer wrote, “with the main question being whether the recent re-acceleration in GGR is a true inflection, promo-driven, event driven, or some combination (and how much does it matter?). Also, did we already see the worst-case Macau GGR in early ‘25 as China manufacturing fears/tariff tensions arguably peaked?
Regarding Las Vegas, Politzer wrote that “we received little pushback regarding our cautious view on near-term Strip trends, and while 4Q25/1Q26 could look better (1Q26 has Con/Agg and Caesars will also have State Farm back), it’s too early to be more constructive.”
“Investors are broadly wondering if the recent uptick in regional GGR growth is sustainable, and similarly, what’s been driving it (March +2%, April +5%, May +7%),” Politzer added. “Possible explanations: promos from some operators (though it’s hard to believe this would buoy the entire market), favorable calendar, and/or a healthy consumer, albeit one with no visibility into the future and thus preference for smaller/experiential purchases over large outlays/vacations.”
IGT sale to Apollo
On June 29, David Katz of Jefferies looked at the impending close of IGT’s gaming business unit sale to Apollo Management:
“Coupled with the closing, IGT is expected to announce its intended capital return plans, which would include either a special dividend or share repurchase or a combination,” Katz wrote. “Management is expected to apply the ~$4 billion of proceeds post fees, to ~$2 billion of debt reduction and some a capital return program. Post the winning bid for the Italian lotto concession, which was larger than anticipated, the shares have been further pressured down 3.2% month-to-date, 21.6% last 12 months, and trading at 5.3X 2025E EV/EBITDA. This update could prove to be an important catalyst for the shares.”
Las Vegas Strip report
Barry Jonas of Truist Securities on June 27 examined the Las Vegas Strip. “May Strip gross gaming revenue fell -4% year-over-year,” Jonas wrote, “with baccarat win down -10% year-over-year, and core (total ex-baccarat) down -3%. While May 2025 had an extra weekend day year-over-year, there was also unfavorable impact from Nevada slot accounting. Locals continue to outperform the market at flat year-over-year and +11% year-over-year normalized in May. Visitation metrics along with Strip revenue per available room were down (-7%/-5%) though convention attendance was up +11% year-over-year. We think the summer softness is well understood with the question being if improvements will be seen by Q4.”
New York online sports betting
J.P. Morgan’s Politzer noted the weekly online sports betting figures released by the New York Gaming commission for the week ending June 22:
“Following the most recent weekly online sports betting figures released by the NY Gaming Commission, 2QTD OSB GGR is tracking +24% year-over-year, while handle is tracking +12% year-over-year, implying a 10.7% hold rate (+107 basis points year-over-year),” Politzer wrote.
“DraftKings. 2Q to date GGR is tracking +17% year-over-year, and handle is tracking +2% year-over-year, implying a 10.5% hold rate (+137 basis points year-over-year). 2Q to date GGR share is 34% (vs 36% in the comparable 2024 period), while handle share is 35% (vs 38% in the comparable 2024 period.”
“FanDuel. 2Q to date GGR is tracking +12% year-over-year, and handle is tracking +5% year-over year, implying a 12.6% hold rate (+74 basis points year-over-year). 2Q to date GGR share is 43% (vs 47% in the comparable 2024 period), while handle share is 37% (vs 39% in the comparable 2024 period).
BetMGM. 2QTD GGR is tracking +68% year-over-year, and handle is tracking +26% year-over-year, implying a 9.1% hold rate (+230 basis points year-over-year). 2QTD GGR share is 6% (vs 4% in the comparable 2024 period), while handle share is 7% (vs 6% in the comparable 2024 period).
“Caesars. 2QTD GGR is tracking +17% year-over-year, and handle is tracking -6% year-over-year, implying an 8.3% hold rate (+165 basis points year-over-year). 2QTD GGR share is 5% (vs 6% in the comparable 2024 period), while handle share is 7% (vs 8% in the comparable 2024 period).
“ESPN BET. 2QTD GGR share is 2% and handle share is 2%.”
