Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Missouri gaming prospects
“Earlier this week, campaign filings indicated that Caesars, via its three casinos in Missouri, contributed more than $4 million to the Missourians Against the Deceptive Online Gambling Amendment, urging voters to reject online sports betting in the state this November,” wrote Jefferies analyst David Katz in a September 22 note.
“According to the legislation, the state would grant each land-based casino operator as well as DraftKings, FanDuel, and all four professional sport franchises one license for retail and OSB. However, typically, states have tethered sports-betting licenses to casino properties, preventing Caesars, Penn and Boyd from collectively getting five additional licenses. At present, the most recent polls suggest Missourians are in favor of this legislation, which ultimately is unfavorable for land-based casino operators.”
Las Vegas room rates dip
J.P. Morgan analyst Joseph Greff looked at Las Vegas room rates in a September 23 note.
“For the survey period, relative to the comparable period in 2023, midweek rates are -40% and weekend rates are -7% (-28% overall),” Greff wrote.
“By company: MGM rates are -25% for the midweek and +22% for the weekend (-10% overall); Caesar’s rates are -45% for the midweek and -22% for the weekend (-34% overall); Wynn rates are -59% for the midweek and -15% for the weekend (-46% overall); Venetian/Palazzo rates are -38% for the midweek and +17% for the weekend (-19% overall).”
New York online sports betting, U.S. igaming
Jefferies analyst David Katz looked at online sports betting in New York as the NFL season continues and igaming across the country in a September 22 note.
“According to New York state data, handle volume rose 19% year-over-year vs. 14% in week 1, with FanDuel taking the top share (51%),” Katz wrote. “DraftKings came in at 34% and MGM looks positioned for a strong showing in handle, up 46% year-over-year in August vs. +25% in July.
“Also, in igaming, the U.S. market continues to set new highs, at +31% in August, with the oldest markets — New Jersey, Pennsylvania, Michigan — still growing 28-30%, despite being 4-12 years old. The data points continue to support our bullish view on the group. Top US picks: DraftKings, Sportradar, and Gambling.com.”
Golden Entertainment rates
David Bain of B Riley Associates looked at Golden Entertainment in a September 22 note.
“We lower CY24E/CY25E EBITDA by 4%/5% for Golden Entertainment — Buy, $40 price target,” Bain wrote. “Changes reflect 3Q24E’s elongated record summer heat in Las Vegas, impacting both the locals and tavern business, lower Laughlin assumptions, and continued weakness within the lower end of the database.
“Our CY24E EBITDA is 3% below consensus, while CY25E is relatively in line. Our CY25E estimates call for 8% EBITDA growth, which we believe could prove conservative, as discussed below. We believe share repurchases continue, and Golden will likely exhaust the remaining $61 million on its share repurchase before the end of the year.
