Second-quarter earnings season is about to hit full throttle, and the spotlight’s firmly fixed on the casino sector. Reports kick off this Wednesday, and expectations couldn’t be more divided—especially when comparing the bullish outlook for Macau and regional operators to a more muted forecast for the Las Vegas Strip.
Bank of America’s early projections are stirring the pot, with research analyst Shaun Kelley saying the firm is seeing some upside for Macau and regional casinos. But Strip numbers? Not so much. Kelley suggests softness in revenue per room and slumping hotel rates may dent Vegas returns.
Vegas Strip Slips as Room Rates Falter
Las Vegas has always been a bellwether for the U.S. gambling industry. But if Kelley’s analysis proves right, Q2 might leave Strip operators with a mild headache.
Room rates—typically a solid indicator of Strip strength—aren’t looking great. BofA’s forward three-month room rate survey shows a concerning 11% dip. That’s not a blip. That’s a trend.
And that’s not all. According to Kelley, June was a particularly rough month. “Very soft,” as he puts it. Visitor numbers, show ticket sales, and even foot traffic metrics all underperformed expectations. It’s not quite panic time, but investors won’t be cheering.
One-sentence paragraph? Here you go: The Strip’s sheen is fading—at least for now.
Interestingly, while Strip resorts might underwhelm, locals casinos in Las Vegas are expected to perform in line with Wall Street’s predictions. These venues cater more to residents than tourists, and their steadier performance hints at some economic insulation amid broader softness.
Macau’s Bounceback Is No Mirage
Macau might finally be crawling back to pre-COVID form—and Wall Street is watching closely.
After being gutted by years of lockdowns and travel restrictions, China’s gambling mecca is showing signs of meaningful life. BofA’s forecast comes in 2% above consensus, pointing to strong VIP and mass-market play.
This could be the beginning of a real turnaround.
BofA isn’t alone in the optimism either. Analysts across the board have been quietly raising their expectations for Macau this quarter.
Why the rebound?
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Easing visa restrictions for mainland Chinese travellers
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More consistent flight schedules from regional hubs
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Uptick in premium mass customer volumes
Also worth noting is how the casinos have adapted. Operators like Galaxy and Sands China have streamlined costs and shifted more toward premium offerings, giving them better margins even with smaller crowds.
For investors, Macau might just be the most promising wildcard on the table.
Regional Casinos Show Quiet Strength
Regional operators—those outside the flash and dazzle of Vegas—are holding up well, and BofA’s forecast is 1% above Wall Street consensus. That’s not a massive beat, but in this market, it’s meaningful.
Several factors are playing in their favour:
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Strong demand from drive-in customers
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Steady discretionary spending in key markets like the Midwest and Southeast
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Less reliance on international travel
These casinos may lack the glamour of Vegas, but they’re proving resilient.
Kelley notes that promotional spend hasn’t spiked, which means profitability should hold steady. For operators like Penn Entertainment and Boyd Gaming, consistency could be their best friend this quarter.
Quick sidebar: It’s also easier for regional casinos to pivot operationally—something Strip giants struggle with given their size and overhead.
Online Sports Betting Still on a Hot Streak
One area where there’s almost universal optimism? Online sports betting.
Even though Q2 tends to be a slower quarter for sports, companies like DraftKings and FanDuel continue to post strong engagement metrics.
Kelley didn’t get too deep into the betting giants this round, but others have. JPMorgan recently upped its revenue expectations for DraftKings citing higher-than-expected retention rates and “stickiness” among casual users.
Here’s how the sector’s shaping up:
| Operator | Q2 Revenue Est. (YoY Growth) | Notes |
|---|---|---|
| DraftKings | +28% | Boost from retention and promos |
| FanDuel (Flutter) | +24% | Strength in parlay bets |
| BetMGM | +17% | Gains from new state launches |
There’s still pressure to turn profitable, but the user base continues to swell.
For now, online sports betting remains a growth engine—albeit one with narrow margins and regulatory overhangs.
A Season of Divergence for Gaming Stocks
This earnings season may be less about industry-wide performance and more about individual positioning.
Not every gaming company is built the same. Strip-focused firms like Caesars and MGM Resorts may post numbers that look sluggish next to regional peers and Macau juggernauts.
At the same time, Wall Street is watching closely for commentary on Q3 booking trends. Investors want to know: is this softness temporary or the start of something more structural?
One thing’s certain: Earnings calls are going to be full of tough questions.
And that’s fair. Because when you’re betting billions on consumer travel, gaming habits, and event spending—you better be ready to answer when the numbers roll in.
