The casino industry braces for what some analysts, like Chad Beynon from Macquarie Equity Research, term an ‘underperformance year’ in 2024. Yet, hope remains for the industry in 2025 as Beynon expressed cautious optimism in his latest investor note. Explore more about industry dynamics in our in-depth piece on online casinos and their growth potential.
Beynon predicts Las Vegas Strip gambling revenue to hit $8.8 billion in 2025, slightly improving over 2024 but shy of the 2023 figure of $8.9 billion. Regional casinos are expected to see a modest increase from $42 billion in 2024 to $42.3 billion in 2025, with an upward trajectory to $43 billion by 2026.
Casino Industry Revenue Projections in Online Gambling
The online gambling sector, especially in North America, seems poised for substantial growth. Beynon’s analysis forecasts igaming revenue to jump from $25.3 billion in 2024 to $30.4 billion in 2025, reaching $34.5 billion by 2026. For reliable insights into gambling regulations, see the American Gaming Association’s updates.
Beynon suggests a potential recovery trend in Macau, projecting growth from $28.4 billion last year to $28.8 billion in 2025, climbing to $30.8 billion by 2026. While gaming overall showed a six percent drop through May 2024, Beynon remains optimistic about market fundamentals and stock potential.
Projections Indicate Growth Despite Industry Challenges
The improvement of five percent in cash flow this year, according to Wall Street consensus, underscores stable consumer behavior observed through May. However, only a fraction of the 16 companies analyzed have upgraded their cash-flow forecasts, leading to the underperformance label.
Some encouraging signs emerged with a 2.5 percent increase in gambling revenues reported in April, hinting at potential surprises in the second quarter and positive outcomes in 2025. Despite Las Vegas facing a dip in revenue due to declining visitation, companies like Wynn Resorts, Caesars Entertainment, and MGM Resorts are expected to report cash-flow growth, bolstered by non-gaming ventures and the completion of capex projects.
Online sports betting recorded a 14 percent revenue increase, even with less traction during March Madness. This, alongside a 27 percent rise in igaming receipts, reflects an encouraging trend in the online domain, despite challenges like increased igaming taxes and limited new market openings.
The gaming industry’s outlook in Macau showed promise, with a May tally surpassing expectations at $2.7 billion. Although Wall Street anticipates a modest two percent growth for the second quarter, Beynon anticipates potential outperformance based on these numbers.
In conclusion, Beynon identified concerns such as decreased casino revenue on the Las Vegas Strip, reduced international travel to the U.S., and other factors like OSB handle and shareholder issues faced by Penn Entertainment over ESPN Bet. Given these challenges and positive indicators, the outlook for 2025 remains cautiously optimistic.
