Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Macau gaming
In a Dec. 11 note, Jefferies equity analyst David Katz looked at gaming in Macau. “We expect a neutral reaction to the latest update as gaming revenue is similar to November/summer levels, with traditional pick-up into the year-end holiday toward the end of the month and year,” Katz wrote. “However, we note that the Christmas/New Years holidays should have less impact than Chinese holidays on gross gaming revenue. Sector valuations remain disconnected from the Macau recovery pending China economic growth concerns and influenza, all of which temper our constructiveness.”
Gaming industry trends
Truist Securities analyst Barry Jonas, in a Dec. 11 note, recapped his firm’s 11th Annual Truist Securities GLLR Summit in Boston. “Broadly, trends across land-based gaming appear steady (regionals flattish, Vegas calendar strength) as investors look for any cracks in the consumer,” Jonas wrote. “Despite low NFL hold in November, interactive remains strong with Penn’s ESPN Bet the topic du jour. … REITs remain modestly active, while capital markets start to improve, and we see tailwinds across gaming tech despite the flattish replacement outlook.”
New York sports betting
J. P. Morgan analyst Joseph Greff Dec. 7 looked at sports betting revenue in New York for the week ending Dec. 3 (NFL Week 13). “The New York Gaming Commission reported total weekly online sports betting gross gaming revenue of $32.4 million, up 2% year over year on handle of $487 million, up 30%, implying a market-wide win rate of 6.7% (down 180 basis points year-over-year). NFL season-to-date gross revenue is up 9%, while handle is up 34%, implying an 8.1%-win rate (down 190 basis points year over year).”
U.S. lodging trends
Truist analyst C. Patrick Scholes Dec. 6 examined U.S. lodging trends in a note. Scholes wrote, “Overall U.S. revenue per available room (RevPAR) was -0.8% year over year for the week ending Dec. 2, per STR (a provider of data benchmarking analytics and marketplace insights), slightly below the prior week’s result of -0.6%, and below the trailing 10-week average of +2.7%.
“We have two major takeaways from last week’s results. A potential scenario like in 2022 where there was extended leisure travel (leisure being a relatively underperforming customer segment) into the week following Thanksgiving and subsequently a lower mix of business/group travel (these being outperforming customer segments of late, especially group), and shift of Art Basel (Miami) by one week, hurting Miami and luxury results.”
