Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Jeffries’ David Katz looked at the opening of Penn Entertainment’s Hollywood Casino Aurora on June 26:
“Our visit to Penn’s relocated Hollywood Aurora (in Illinois) property reinforces our view that land-based operators must continue reinvesting across the portfolio to remain competitive in an increasingly pressured environment. Shares are up +48.3% year-to-date, the top performer in our coverage, which we attribute to: 1) peer M&A activity, with three of the six best-performing trading days year-to-date tied to M&A-related developments in the group; 2) operational improvement in the land-based business, alongside a push toward breakeven profitability in interactive; and 3) passive support from the recent Russell rebalancing. However, our view remains that relatively high lease-adjusted leverage and an unproven digital strategy balance expectations for continued near-term share price out performance.”
Truist Securities’ Barry Jonas also looked at Hollywood Aurora on June 26:
“We attended Penn’s Chicago investor event Thursday, touring the new Hollywood Aurora property and the recently opened Hollywood Joliet. With M, Joliet and Columbus up and running, Aurora represents the last of Penn’s four growth 2025/2026 projects. Management expects these projects to yield a 15% ROI, meaning the Aurora should add $54 million EBITDA once ramped. We maintain estimates for now, but with these growth projects under a backdrop of regional GGR momentum, we increase our price target to $25 based on 7x 2027E EBITDAR and reiterate our Buy rating.”
Macquarie’s Chad Beynon examined betting on the World Cup June 26:
“We believe the World Cup has delivered a fair trading environment through 54 matches. While favorites have won 37, timely draws (England vs. Ghana) and select upsets have offset liability, keeping outcomes balanced. Elevated scoring (2.98 goals per game; 56% of games over 2.5) has supported engagement, particularly in higher-margin player props and parlays. Cagier games with the potential for extra time are supportive of higher margins in the late-stages of the tournament, despite in-play risk (late goals negative). To date, we think international operators (e.g., Flutter, Super Group Limited, Rush Street Interactive) have outperformed US sportsbooks (e.g., DraftKings, Caesars, MGM), though the strong US team performance is boosting domestic engagement/acquisition with retention post-tournament key.”
Texas Capital Securities’ David Bain looked at Caesars’ deal with Fertitta Entertainment on June 25:
“Caesars is currently trading just below its $31 per share all cash deal proposal from Fertitta Entertainment. Recall that Caesars has a go-shop period until July 11, 2026, allowing for alternative proposals to Fertitta Entertainment’s. While we are not privy to any Board level discussions related to the existing potential transaction, we note that the current proposal has already obtained committed financing from ~one dozen of presumably the largest banks, limiting the pool of resources in a potential ~$17.6 billion + alternative transaction with other speculated parties. Net, while we do not rule out a competing offer, particularly given our view that Caesars’ intrinsic value exceeds Fertitta Entertainment’s current proposal, we believe stock upside is likely limited from current levels and maintain our Neutral rating.”
