Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
North Carolina gambling legislation
In a note posted Sept. 24, Jefferies equity analyst David Katz wrote about North Carolina Republican legislators not passing a bill authorizing four new casinos and thousands of VLTs.
“Opposition to the bill stemmed from residents of the counties where the casinos would be built as well as a push among legislators to focus on greater Medicaid coverage,” Katz wrote. “Representative (Phil) Berger mentioned that the issue of expanding casinos within North Carolina could potentially be brought up next year during the state senate’s short session. Giving up on the casino bill will ease rising competitive pressure in Maryland and Virginia benefiting several companies’ properties in our coverage including Churchill Downs’ Rosies’ HRM facilities and Caesar’s Danville property.
Regional properties
Analyst Barry Jonas of Truist Sept. 21 wrote that the market for regional operators is “Lower end lower, but overall market stably flattish.”
“As investors continue to be wary around consumer health, same-store regional gaming trends appear to be stable — even to the surprise of some operators — though absent of sizable growth,” Jonas wrote in an analyst’s note. “Many echoed what we’ve heard in the past around any weakness being concentrated at the lower end of the database, though we heard that the trend hasn’t changed (no further declines for that category). Similarly, operators pointed to the Southeast (which we visited a number of months ago) as the country’s softest market; though again, weaker trends are persisting and not worsening. In addition, as gas prices reach their highest levels since 4Q22, operators noted higher gas prices have historically not deterred players from visiting drive-to casinos.
Las Vegas Strip room rates
J.P. Morgan analyst Joseph Greff Sept. 25 posted a note for a Las Vegas Strip room rates survey for Oct, 15-23, 2023. Greff noted that “our ability to collect MGM data has been impacted by the cyber-related incidents starting Sept. 10. Our MGM rates for the week of Oct. 8-14, along with the revisited rates for the prior three weeks, are estimated in this note using an analysis of market trends.”
For the Oct. 15-23 survey period, Greff wrote that “midweek rates are +18% and weekend rates are -8% (+7% overall). By company: MGM rates are +8% for the midweek and -32% for the weekend (-9% overall); Caesars rates are +28% for the midweek and +25% for the weekend (+27% overall); Wynn rates are +109% for the midweek and -18% for the weekend (+43% overall); Venetian/Palazzo rates are -35% for the midweek and +20% for the weekend (-23% overall).”
