Business earnings reporting commences on Wednesday, with uncertainties surrounding Macau's performance, regional dynamics, and Las Vegas' standing.
In the upcoming second-quarter earnings season, Bank of America has presented a differentiated outlook for the casino and sports betting sector. The bank expects casino and sports betting companies related to Macau and regional markets to outperform, while those primarily linked to the Las Vegas Strip face a more challenging environment.
According to Shaun Kelley, a research analyst for BofA, the online sports betting hold was solid for the second month in a row in June, with promotions remaining low. This reflects the growing market momentum in the online sports betting sector.
Bank of America projects above-consensus performance for Macau and regional casino operators, indicating optimism about their earnings potential in Q2 2025. The bank also expects strength in online sports betting companies. Conversely, the bank expects a negative or below-consensus performance for companies focused on the Las Vegas Strip.
This differentiated outlook reflects varying geographic and product dynamics within the broader gambling sector. Red Rock Resorts, a key regional casino stock, reported a strong Q2 2025 financial performance with 55.1% net income growth year-over-year, which aligns with the positive regional casino outlook by Bank of America.
In Macau, investors are getting "much more constructive" on potential second-half growth, as stated by Kelley. He also raised the price outlook for Wynn Resorts to $125. For Las Vegas Sands, Kelley raised the price outlook to $52.50.
The second-quarter earnings season starts on Wednesday, and some of the companies set to release their earnings include Monarch Casino & Resort, GLPI, Red Rock Resorts, Caesars Entertainment, MGM Resorts International, VICI Properties, Penn Entertainment, Wynn Resorts, and Full House. Churchill Downs and Boyd Gaming will hold earnings calls on July 24. Las Vegas Sands hasn't scheduled a release date for its earnings yet.
Bank of America has set a price target of $50 for DraftKings and $115 for Churchill Downs. DraftKings is expected to report second-quarter EBITDA of $250 million to $300 million, with investors leaning toward the higher end. Boyd Gaming will provide insights about the neighborhood casino market in Las Vegas and discuss its decision to sell its 5% stake in FanDuel for $1.75 billion.
Bank of America has a price outlook of $35 for Caesars Entertainment and $20 for Penn Entertainment. Analysts continue to come out on the deal, with Daniel Politzer of J.P. Morgan keeping a neutral stance and maintaining a price target of $79 for December. Bank of America has set a price target of $95 for Boyd Gaming.
Based on early June data, Kelley estimates that same-store regional-casino trends are up 1% year over year versus 5% in May. Despite some revenue miss in Bank of America’s overall Q2 2025 results, strong trading income and net interest income growth form part of their earnings season projections rather than their own earnings report.
As the second-quarter earnings season kicks off, investors and analysts will closely watch the performance of casino and sports betting companies, with a particular focus on those in Macau, regional markets, and online sports betting, as well as those facing challenges on the Las Vegas Strip.
In light of the upcoming second-quarter earnings season, the sports betting sector is anticipated to show strength, backed by Bank of America's expectation of above-consensus performance for online sports betting companies and regional casino operators. Analysts, like Shaun Kelley, also predict a positive outlook for companies in Macau and regional markets, such as Red Rock Resorts, while those focused on the Las Vegas Strip are expected to face a challenging environment.
