Wall Street Bets is a roundup of recent notes from analysts covering the gambling industry.

“Our latest leisure focused Las Strip room rate survey suggests calendar driven growth in August has been followed by softness into Q4,” wrote Truist Securities analyst Barry Jonas in a September 16 note.

“This follows trends highlighted in our last published survey and MGM’s F1 commentary at Q2 earnings, which could also have some calendar related impacts. While our survey is just one facet of the market and can change, we note continuing investor concerns around slowing growth amidst tough comps. Despite any near-term headwinds, we remain bullish on Vegas long-term while valuation for Buy rated Caesars and MGM remains undemanding.”

In a September 16 note, Jefferies analyst David Katz spoke about the company’s top picks for the next year.

“Based on our recent round of meetings and adjustments to estimates, Caesars and Churchill Downs are our top picks for the next twelve months,” Katz wrote. “Caesars is inexpensive (6.4X 2025E EBITDAR) and benefits from completed capex and increasing confidence in a digital pivot (we are Street-high). Churchill Downs continues to build out its pipeline in Virginia and Kentucky, with solid execution and group-high valuation of 12.3X is well-deserved. Conversely, MGM remains inexpensive (5.8X) but bears little near-term catalyst for change with challenging table hold and F1 comps in Las Vegas and a digital transition year.”

B Riley Securities analyst David Bain examined Inspired Entertainment’s rollout of hybrid dealer roulette in a September 15 note.

“We expect Inspired’s online hybrid dealer roulette product to proliferate to several large iGaming customers within the next ~30 days,” Bain wrote. “Roulette is the largest category of the online live dealer market. To date, Inspired has only offered a game show-like hybrid dealer game in two states with one major operator, though results have been highly encouraging—that same operator intends to offer Inspired’s roulette game across multiple jurisdictions, according to checks.”

New York online sports betting

J.P. Morgan analyst Joseph Greff looked at New York’s online sports betting market in a September 13 note.

“Following the most recent weekly online sports betting figures (week ending September 8, 2024) released by the New York Gaming Commission, quarter-to-date online sports betting GGR is tracking up 15% year over year, while handle is tracking up 26%, implying a 9.4% hold rate, versus 10.2% during the comparable 2023 period,” Greff wrote. “We note that quarter-to-date figures reflect the first ten weeks of the 3Q24.

Jeffries’ Katz also looked at Rush Street Interactive and Penn in a September 15 note.

“Our inbound calls were more focused on two names,” Katz wrote. “Rush Street was among the stronger performers in the group for the week, up 10.7%. Although it is not clear to us exactly why it outperformed, we believe there are likely multiple factors, including the increased appetite for risk, the likely strong start to football season, the considerable investor-facing activities the past two weeks and the increased attention from year-to-date performance in the shares from depressed levels. We believe there is more to go for Rush Street.

“As for Penn, the continued focus on the start of the football season for ESPN Bet and on management driving value from its current assets is the likely driver of group-leading weekly upside for the week. We expect the initial data points for Penn/ESPN Bet should be positive.”

Please fill out the form to send a message to the CDC Gaming Reports team. Alternatively, you can send an email to the address on the footer of each page.