In the neon-lit corridors of the Las Vegas Strip, casino operators are facing a paradox. While their stocks present themselves as potential value investments in the gaming equity landscape, industry analysts caution that brighter prospects may lie elsewhere. This article delves into the current state of Las Vegas gaming stocks, offering a nuanced perspective on their investment potential amidst a challenging revenue environment.

The Downtrend in Gaming Revenue: A Closer Look

Recent data paints a concerning picture for Las Vegas’ gaming sector, with gross gaming revenue (GGR) experiencing a three-month year-over-year decline. This trend signals a growing apprehension among investors eyeing stakes in the city’s leading casino ventures. Macquarie analyst Chad Beynon provides a balanced outlook, suggesting that while some companies boast attractive valuations, being inexpensive is not enough to guarantee investor interest. Notably, Caesars Entertainment and MGM Resorts International, which together with Wynn Resorts command 75% of Las Vegas GGR, have seen their stock prices dip by 21.90% and 10%, respectively.

“In Vegas, the combined revenue performance of WYNN, MGM, and CZR has been underwhelming, with growth rates fluctuating between -5% and +1% over the past five quarters. Our projections indicate a modest 0.4% decrease in 2025 for these entities,” notes Beynon.

Ranking Low in the Gaming Equity Pecking Order

When placed in the broader spectrum of gaming equity segments, Las Vegas stocks find themselves in a less favorable position, ranking fourth out of five categories. They sit above Macau concessionaires but trail behind online betting platforms, gaming suppliers, and regional casino operators. This positioning underscores the challenges Las Vegas stocks face, including diminished GGR and visitor numbers, a decrease in international tourism, and a stagnant mergers and acquisitions scene.

Challenges and Opportunities: A Dual-Edged Sword

1. Decreased GGR and Visitor Numbers: A concerning trend that casts doubt on growth prospects.
2. Diminishing International Tourism: A significant blow to the overall revenue stream.
3. Stagnant M&A Landscape: The lack of significant transaction announcements among Strip operators adds to the uncertainty.

Despite these hurdles, investments in Las Vegas’ iconic attractions hint at a continued effort to bolster the city’s appeal, suggesting that not all hope is lost for investors.

EBITDA Forecasts: A Lukewarm Outlook

The earnings outlook before interest, taxes, depreciation, and amortization (EBITDA) remains tepid for traditional Las Vegas venues. Beynon remarks, “Despite our cautiously optimistic stance, only four out of our 25 covered Gaming companies received raised ’25 EBITDA estimates—a telling sign of the sector’s overall underperformance.” This contrasts sharply with the more impressive forecasts for online platforms and suppliers, highlighting a shifting landscape within the gaming industry.

Seeking Silver Linings: Beyond the Strip

While some of the Strip’s traditional powerhouses grapple with current headwinds, others like Boyd Gaming and Red Rock Resorts have managed to post gains in 2025. This mixed performance underscores the complex and dynamic nature of the Las Vegas gaming market, where opportunities still exist for those willing to look beyond the immediate challenges.

“Despite current challenges, the resilience shown by entities off the Strip underscores a complex but dynamic landscape within which savvy investors can find opportunities if they know where to look,” Beynon adds.

Conclusion: Navigating the Uncertain Waters of Las Vegas Gaming Stocks

In conclusion, while Las Vegas gaming stocks currently rank low in the gaming equity pecking order, the landscape is nuanced with both challenges and opportunities. Investors must navigate this terrain carefully, balancing the allure of value investments against the backdrop of a challenging revenue environment. As the city continues to evolve, staying informed and agile will be key to capitalizing on the dynamic opportunities that Las Vegas has to offer.