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

In a June 27 statement, Truist Securities analyst Barry Jonas wrote that Las Vegas Strip revenue in May jumped 4% year over year “despite baccarat win down ~7% year-over-year and Nevada slot accounting headwinds, demonstrating strong underlying demand. Normalized/ex-baccarat revenue was up a healthy +10%/+6% year-over-year. Visitation trends were very healthy (+5%) with Strip revenue per available room up a strong +11%.

“Strip operators are well positioned heading into Q2 earnings (also supported by our most recent room survey). Locals revenue was up +5% in May (+10% quarter-to-date), though we think this is mostly driven by Red Rock Resort’s (Hold) Durango. Still, with Street expectations for same-store Locals properties to be soft, quarter-to-date Locals revenue results are minimally in-line.”

J.P. Morgan analyst Joseph Greff also covered Las Vegas Strip revenue, noting that the Las Vegas Convention and Visitors Authority reported that visitation for the month reached 3.66 million, up 4.6% year over year.

“Citywide occupancy was 86.1%, down 470 basis points versus May 2019 on a room inventory base that was 3.4% higher than in 2019, reflecting 154,035 open rooms. Convention attendance was 461,900 attendees in May, up 1.8% year over year,” Greff wrote.

“Las Vegas Strip revenue per available room for the month was $188, up 11% year-over-year. Las Vegas Strip average daily room rate for the month was up 9% year over year, while occupancy was up 150 basis points year-over-year.”

In a June 30 note, Jefferies analyst David Katz stated that DraftKings “has been the most active topic in our coverage, following our cut of Q2 numbers earlier this week. The estimate change came after DraftKings experienced an elevated number of app downloads in the quarter, specifically in Golden Nugget Online Gaming in response to a previously noted increase in marketing post the migration of GNOG to the DraftKings tech stack.

“Our impression is that the downloads and sign-ups have been greater than anticipated, which are associated with sign-up promos. As a consequence: 1) igaming monthly unique players should noticeably increase; 2) increased promos associated with new customer sign-ups should impact quarterly profitability; 3) long-term earnings power should be increased.”

In a June 28 note, J.P. Morgan’s Greff looked at recent and historical gaming revenue and foot traffic through data supplied by geolocation services provider Placer AI.

For U.S. regional operators in the 2Q24, Greff wrote, “We expect revenue to be modestly positive in aggregate. Monthly state results are impacted by the number of weekend days compared to the same month of the previous year, so April’s soft results are largely explained by an unfavorable calendar (eight weekend days versus nine in April 2023), while May is better from a favorable calendar comparison and June has a neutral comparison. Based on year-to-date results (through April) across a basket of mature markets and the average historical seasonality since 2017, we think the balance of the year can result in low-single-digit revenue growth (note that this is not on a same-store basis).”

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