Prospects of tax cuts, less overtime pay for employees and tariffs had gaming-industry executives in a sunny mood in Miami as they attended the Deutsche Bank Gaming, Lodging, Leisure, & Restaurant Conference last week.

One of the causes for optimism, as enumerated by Deutsche Bank analyst Carlo Santarelli, was a Texas judge’s blocking of the Fair Standard Labor Act. As of July 1, employees were disqualified from overtime pay if they made $44,000 a year or more. On January 1, 2025, that cap would have been raised to $59,000.

Industry leaders also were described as upbeat about an expected extension of high-income tax cuts that had been incepted in 2017. Also, despite there being less of a “clear positive” in the abandonment of a federal tax on tips, Las Vegas casino operators anticipated saving as much as $15 million a year and seeing a $200 million injection into the Nevada economy.

The assembled executives didn’t fret much about the prospect of double-digit tariffs unless they were reliant upon Asia for components. Santarelli allowed that the impost could be “somewhat of a headwind” for the manufacturing sector.

Companies attending the summit included Wynn Resorts, Gaming & Leisure Properties Inc., Sportradar, Boyd Gaming, Station Casinos, MGM Resorts International (and partner Marriott International), Accel Entertainment, Light & Wonder, Penn Entertainment, Caesars Entertainment, Las Vegas Sands, Golden Entertainment and DraftKings. Several hoteliers also attended.

Pride of place in discussion went to Macau.

“Operators were broadly constructive, though [they] acknowledged the rather gradual and, at times, uneven recovery in the market,” Santarelli observed.

Signs for hope included a recent increase in gambling revenue, although November was characterized as “sluggish.” Crackdowns on illegal money exchanges were described as an impediment to business. An anticipated visit by Chinese Premier Xi Jinping was expected to dampen an otherwise promising December.

Santarelli believed Wynn and MGM would be mainly defending their Macanese market share, while Sands would be looking to enlarge its percentage. He added that “the market remains competitive, though we don’t sense competition, as measured by reinvestment, as having changed materially of late.”

Given the dynamic of reinvestment versus slow gambling-revenue growth, Santarelli deemed potential cost creep as manageable but worth keeping an eye on. The fourth quarter, he said, would be expensive for operators, given a preponderance of holidays and non-gambling events.

Las Vegas was, however, the hottest topic, it was reported. Las Vegas Grand Prix-related room rates were described as “soft,” with 2024 looking flat overall from a hotel revenue perspective. He anticipated even less from gambling win, for which Santarelli predicted  7 percent decline like seen in the third quarter.

High-rolling gamblers were said to be seeing even more generous rebates on losses from casinos, a key promotional strategy. Otherwise, “the competitive environment has been more or less stable, with operators focused on maintaining margins and investing in their portfolios to stimulate incremental demand”

The Las Vegas Strip was described as being healthy, with high occupancy rates through year’s end. A post-electoral bounce was anticipated by some, “given improved consumer psychology, particularly from small business owners.”

Operators were likewise bullish on group business in 2025. Santarelli was skeptical, believing the real uptick would come a year later.

Locals-casino trends were seen to be down, a phenomenon rationalized as renewed seasonality in player activity.

“Moreover, operators believe the cost dynamics have quelled, with utility and insurance expense increases having softened, while labor wage pressures have also become more benign.”

As for Formula One weekend, 2023 was proving a tough act to follow. Dynamics seen as unlikely to repeat themselves were 209 percent increases in baccarat win, along with 90 percent higher play and 19 percent hold.

However, mid- to low-end casinos, Santarelli believed, would be dealt into the F1 game. He cited lower room rates at top-tier properties and reduced ticket prices, both of which he expected would draw more middle-class customers.

Debate raged over the role of mergers and acquisitions. Interest-rate cuts by the Federal Reserve initially fueled M&A talk but “the recent rate market action has seemingly cooled these sentiments. Overall, while some management teams remain optimistic around a more active transaction market, these sentiments were not shared by all, with some noting that bid ask spreads remain very wide.” Still, Santarelli thought, there would be more M&A talk next year than in some time.

Attendees also argued about the prospects for igaming and whether it would devour terrestrial casino play. Santarelli opined, “we stopped taking this ‘debate’ seriously long ago. The data, in our view, is and has been overwhelmingly obvious for some time.”

His conclusion? Based on data from Michigan, New Jersey and Pennsylvania, in states with robust igaming, brick-and-mortar operations are lagging their counterparts in states that haven’t gone digital.

Regional casinos were deemed largely stable, “though growth remains, and in our view is likely to remain, elusive,” because of cost creep and new competition. Markets soon to be affected by such factors were said to be Bossier City in Louisiana, Chicagoland and the Iowa/Nebraska border.

Trends regionally were observed to be flat at best or slightly downward. New supply was said to be benefiting Illinois, while Detroit casinos were rebounding from 2023 labor actions. “Overall, we see little change in the results, despite operator commentary around an improved environment in October,” Santarelli remarked.

Operator expectations were high for statewide growth in online sports betting and igaming. Priorities included reducing promotional warfare and, in the case of Penn and Caesars, increasing market share.

Casino operators pinned their hopes for conquest of Texas on the elevation of Lt. Gov. Dan Patrick to a federal post, “though recent comments from the Lieutenant Governor likely cools this speculation … given the process in Texas, an inability to get sports betting across the line in 2025, sets the initiative back another two years.”

Upbeat Global Gaming Expo commentary on Florida and California online sports betting was said to be cooling off, much to Santarelli’s surprise. He said talks between tribes and online sports betting providers had lost momentum.

“Operators continue to take the approach that numerous shots on goal will yield something in the near term” was Santarelli’s phrasing of the prospects on further igaming legalization. Maryland, New York State and Illinois were perceived as targets of opportunity, although the analyst deemed it unlikely that more than one state would act positively.

Coming on the heels of an attempt to treble the Louisiana tax on online sports betting to 51 percent, “the tax environment was a pronounced topic of discussion. With the threat in Louisiana having been neutralized, we believe the market is left with the same dynamic that has been around for some time.”

Aside from a one-off attempt to lower online sports betting taxes in Ohio, “states seem more than willing to come to gaming, specifically online sports betting, to fill what are increasingly obvious tax holes. We don’t expect this theme to abate, and we believe it will be more pronounced in calendar 2025.”

Santarelli minced no words about October online sports betting results, calling them “disastrous,” but allowing that relief had come in the form of mid-November sports outcomes, “with a slew of underdogs covering.” Still, he called those results “undoubtedly incremental.”

Under the heading of “colorful anecdotes,” Santarelli placed the revelation that punters weren’t spending money on long-shot bets, preferring to place those with their free-play wagers. Also, Sunday and Monday night games were garnering triple the number of wagers as afternoon NFL tilts were.