Taxes on Sports Betting May Impact Growth
Fitch Ratings released a report on June 16 discussing the potential effects of recent and proposed sports betting tax hikes. These increases could potentially slow down the positive growth momentum of the online gaming sector. However, they are unlikely to affect the ratings for online gaming operators such as DraftKings (BB+/Stable) and Flutter Entertainment (Flutter, FanDuel, BBB-/Stable). The ratings reflect the sector’s robust growth prospects, strong financial structures, and healthy cash flow, which are counterbalanced by the competitive market and evolving policies.
For more insights into how taxation influences this sector, explore our article on the impact of taxation on online gambling.
BetMGM Increases Revenue Guidance
In a report dated June 22, David Katz from Jefferies analyzed BetMGM’s future financial outlook. The company upgraded its FY25 net revenue forecast to at least $2.6 billion, up from the previous $2.4-2.5 billion range. Additionally, FY25 EBITDA is anticipated to be a minimum of $100 million, underlining improved digital capabilities, especially as the NFL season approaches. BetMGM expects to release further updates after the July 29 report.
Lodging Trends Show Softness
According to Truist Securities’ C. Patrick Scholes on June 18, recent lodging sector results reflected ongoing volatility in consumer and business confidence. Contributing factors included governmental cutbacks, reduced international travel, and upcoming repayments of student loans, which are likely to affect demand. Group occupancy decreased by 3.5% year-over-year, indicative of continuing group cancellation issues.
Regional Properties Outlook
David Katz from Jefferies assessed regional properties on June 20, noting strong May GGR data supported by an additional Saturday that month. Although consensus views resisted labeling this high single-digit GGR growth as a consistent trend due to broader economic uncertainties, summer prospects in Las Vegas appeared less dire than anticipated. Among regional prospects, Churchill Downs stood out as a preferred choice due to its growth avenues.
For an overview of current U.S. gaming legislation, visit the American Gaming Association’s website.
