Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.
Analyst David Katz of Jefferies January 12 looked at online sports betting in New York.
“Statewide OSB hold in New York over the past week fell 550 basis points week-over-week to 6.3%, or 290 basis points below the 2024 average, and the lowest weekly hold since mid-October,” Katz wrote. “On net, New York OSB hold ended 4Q24 at ~8.3%, down ~160 basis points quarter-over-quarter. By operator, FanDuel had the best hold in the fourth quarter, at 9.5% (-240 basis quarter-over-quarter, Draft Kings garnered 8.1% (-110 basis points quarter-over-quarter), while Bally Bet was the laggard at just 5.8% (-210 basis points quarter-over-quarter).
“The weekly hold volatility has translated into the stocks, as the Street’s confidence in the 2025 EBITDA guide of $900 million – $1 billion. With customer-friendly outcomes reaching unusual levels for the past 20 years, we believe probabilities remain as prior, that the company can reach this level with free cash flow at 90% levels. Growth continues to accelerate in the market, which is positive for all names in the group: DraftKings, Rush Street Interactive, Sportradar and Gambling.com.”
Truist Securities analyst Barry Jonas weighed in on Las Vegas Strip properties January 9.
“November Strip gross gaming revenue fell -4% year-over-year with baccarat win down -18% year-over-year, though normalized/ex-baccarat casino win was better +2%/flat year-over-year,” Jonas wrote. “Visitation metrics were ok (+1%) but Strip revenue per available room was down -22% likely reflecting the well-known softness in this past year’s F1 event. Locals GGR was down -5%, though Nevada slot accounting has a larger impact with normalized +12%. Despite the headline softness, we note better normalized results while Strip operators sound positive for growth in 2025 looking past tough Q1 comps (Super Bowl).”
J. P. Morgan analyst Joseph Greff also looked at gaming in Nevada.
“November Las Vegas Strip gross gaming revenue (GGR) of $788.7 million decreased 3.9% year-over-year, Las Vegas locals GGR of $245.2 million was down 4.7% year-over-year, and statewide (Las Vegas Strip, Las Vegas locals, Reno, Tahoe, and other) gaming revenues of $1.32 billion were down 4.2% year-over-year,” Greff wrote January 9. “Relative to November 2019 levels, Strip GGR increased 52%, locals GGR increased 35%, and statewide GGR increased 40%.
“For the LV Strip, table game hold was 15.6% versus 15.0% the prior year and a 15% average over all of 2023. Baccarat hold was 17.0% versus 19% in the prior year, 13.7% in 2019 and the normalized 13-14% range. Table games drop was down 9% year-over-year (up 39% versus 2019), table games drop ex-baccarat was down 9% year-over-year (up 31% versus 2019), slot drop was up 6% year-over-year (up 46% versus 2019), and locals slot drop was up 8% year-over-year (up 16% versus 2019). Because November ended on a weekend, slot win for Saturday (11/30) will be reported in December results, understating November 2024 slot revenue (a quirk in Nevada reporting; slot handle, table drop, and table win are unaffected). There was no such impact in 2023, while November 2019 had a similar impact.”
Rege Behe is lead contributor to CDC Gaming. He can be reached at [email protected]. Please follow @RegeBehe_exPTR on Twitter.
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