The decline in gaming revenue and visitation on the Las Vegas Strip raises concerns about the future performance of casino operators in 2025.
Chad Beynon, a senior gaming analyst at Macquarie, recalled the optimism of Las Vegas operators during first-quarter earnings. They were hopeful about Strip adjusted earnings growth in 2025, given rising group bookings and completed major capital expenditure projects. However, recent figures show a different picture.
Las Vegas Strip Revenue Declines
Visitation and revenue per room are down 6% year-over-year, and gaming revenue fell 1%. Beynon notes the difficulty in maintaining EBITDAR given these trends.
In May, the Strip generated monthly revenue of $714 million, a 4% year-over-year decline. This drop is influenced by a 10% decrease in baccarat and lower slot revenue. Although slot handle grew 2%, slot hold performed below the long-term average. Read more news
In contrast, U.S. regional gaming operations experienced growth, with a 4% revenue increase in May and 2% quarter-to-date. This supports a more positive outlook for regional casinos compared to Strip operators.
Challenges Facing 2025 Outlook
Beynon expects a 1.5% decline in 2025 earnings. Given the monthly data, Macquarie has lowered its second-quarter Strip gaming revenue forecast to a 3% decline year-over-year, with anticipations for a flat performance in 2025.
Non-gaming revenue per room on the Strip decreased by 3% in May, following a 4% increase in April. June’s figures are trending towards a 15% year-over-year decline, projected to result in a 2% to 3% decline for the second quarter.
Las Vegas visitation fell 7% in May, aligning with softer TSA passenger data (-1.5% year-over-year) in May and June. Beynon implies a downside risk for second-quarter 2025 earnings for Strip-focused entities like Caesars Entertainment, MGM Resorts International, and Wynn Resorts.
