Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Surprise tax increase in Illinois
Barry Jonas of Truist Securities over the weekend looked at Illinois’ decision to increase sports betting taxes. “Illinois surprised the industry with another proposed sports betting tax increase in its FY26 budget,” Jonas wrote June 1. “This comes after last year’s surprise increase. OSB operators will have to pay a $0.25 levy on the first 20 million wagers accepted, with $0.50 thereafter. The governor’s signature (likely, since the measure came from his office) would make the new tax effective July 1. The impact would again be skewed to DraftKings and Flutter, now at/near New York/New Hampshire high 51% OSB rate. Aside from additional state increase risks, investor focus will rest on mitigation (e.g. promos, surcharges, bet minimums, prediction), guidance impacts and long-term igaming potential.”
OSB hold increases in New York
Jeffries David Katz viewed online sports betting for New York June 1. “Statewide New York OSB hold increased ~320 basis points week-over-week to 13.1%, best since September,” Katz wrote. “Hold increased for most operators except Bally’s, ESPN, and Resorts World, who were down ~340 basis points, ~340 basis points, and ~400 basis points, respectively. Meanwhile, Flutter, MGM, Caesars, DraftKings, and Fanatics saw hold rates of 12.%+. Flutter maintained #1 GGR market share at 42%, though DraftKings gained ground at 34.1%. Quarter-to-date, Flutter is running at 11.2% average hold, vs. DraftKings 9.6%.”
Las Vegas Strip gaming soft
According to a note released by Truist’s Jonas May 28, gaming on the Las Vegas Strip was down in April, falling “-3% year-over-year, facing tough hold comps with unfavorable Nevada slot accounting (-3 days year-over-year).
“That said, baccarat GGR was very strong (+41% year-over-year) as well as solid underlying volume metrics for slots/tables with handle up +2%/+6%,” Jonas wrote. “Locals’ performance was better, up +3% year-over-year, despite the headwinds. April visitation was down -5% year-over-year, though convention attendance was up +14% along with Strip revenue per available room/average daily rate up +4%/+5% year-over-year. April Strip softness compares to relatively solid regional trends with April month-to-date up +3% year-over-year same-store.”
