The future is looking brighter for land-based gaming operators after a tough year, with industry leaders eyeing growth in 2025 alongside a renewed focus on mergers and acquisitions (M&A). These insights emerged from the Wicked Good 12th Annual GLLR Summit in Boston, where prominent gaming companies and analysts gathered to assess the sector’s trajectory.
A Resilient Outlook for Land-Based Gaming
After a challenging 2024, land-based gaming operators seem to be turning a corner. Barry Jonas, an analyst at Truist Securities, highlighted an uptick in performance toward the end of the year, with regional gaming operators rebounding from their lows and Las Vegas holding steady despite difficult comparisons.
“Operators are observing improved momentum in November and December,” Jonas noted, attributing the trend to lower gas prices, a post-election economic boost, and fewer impacts from new competitors. For instance, while Wind Creek faced competition in Chicagoland and Nebraska casinos rivalled Council Bluffs, performance overall held steady.
Even Caesars Entertainment, which initially predicted a “slightly down to flat” EBITDA for 2025, showed signs of optimism. Jonas speculated that if the company updated its earnings outlook today, it might anticipate flat or slightly improved results.
Las Vegas Steadies After a Rough Patch
Las Vegas operators are bracing for a potential return to growth in 2025, buoyed by a robust calendar of events and conferences. After months of year-over-year gaming revenue declines (-4% in August, -2% in September, and -3% in October), the balance of November appeared stronger.
Major upcoming events, including the return of the Con/Agg conference and the presence of State Farm for Caesars, are expected to drive footfall and revenue. Operators believe these opportunities will provide a stronger foundation for the city’s gaming landscape in 2026.
Mergers and Acquisitions Back in Focus
The conversation around M&A is heating up, with gaming companies eyeing opportunities to refine their portfolios amid changing market conditions. Analysts see potential for a wave of operator-led deals in 2025, spurred by interest rate cuts and a more favourable regulatory climate at the Federal Trade Commission (FTC).
Key points shaping the M&A landscape include:
- Improved Deal Velocity: Analysts suggest rate cuts have sped up discussions around potential mergers.
- Valuation Adjustments: Bid/ask spreads remain critical, with many deals contingent on realistic valuation expectations.
- Portfolio Optimisation: Companies like Gaming & Leisure Properties, Inc. (GLPI) emphasise growth through existing assets, reducing reliance on new acquisitions.
Digital Gaming’s Continued Growth
On the digital side, operators like DraftKings and Penn Entertainment continue to push boundaries. DraftKings is poised for another year of growth, with free cash flow improvements expected to be a standout.
Penn Entertainment plans to launch a standalone iGaming app in early 2025, complementing its existing ESPN Bet offering. This move could be a game-changer, leveraging Penn’s extensive land-based portfolio to create synergy between physical and digital experiences.
Jonas highlighted tax revisions as the biggest hurdle for interactive gaming, though most executives remain optimistic that proposed tax increases will face significant resistance.
Technology’s Quiet Yet Crucial Role
The tech sector saw less representation at the summit following a year of intense M&A activity. However, companies like Light & Wonder and International Gaming Technology (IGT) remain critical to the industry’s backbone.
Light & Wonder celebrated the success of its Dragon Train product despite subdued demand for land-based casino replacements. Meanwhile, IGT expressed cautious optimism about upcoming opportunities, including a price hike for Mega Millions and stability across its portfolio.
The focus for these tech leaders is shifting toward 2025, with ambitious EBITDA targets driving innovation and strategy planning.
