Bank of America convention highlights power in regional casinos and digital gaming — CDC Gaming

Las Vegas’s loss is the regional on line casino operator’s achieve. That was one of many messages that got here out of the fifteenth annual Bank of America 2025 Gaming, Lodging & Leisure Conference in New York City.

The convention hosted 34 administration groups that included Penn Entertainment, Caesars Entertainment, MGM Resorts International, DraftKings, and BetMGM.

Regional operators have been constant of their appraisal of the regional client as wholesome and that properties can profit from offering worth to these staying nearer to residence, in line with B of A analyst Shaun Kelley.

“Overall, it seems like the regional consumer is stable or good in most markets,” Kelley stated. “The recent improvement in unrated play appears to be continuing into the third quarter, while 2026 could see less new supply.”

That compares to Las Vegas, the place visitation has been impacted by weak drive-in prospects from neighboring states, the Spirit Airlines chapter, and weak Canadian and abroad journey.

“Any recent improvement sounded modest, but there’s optimism for the fourth quarter, given the event and group calendar,” Kelley stated. “MGM pointed to recent initiatives to improve the value messaging for Las Vegas (both branding and select pricing), while Caesars is leaning into its database.”

The digital firms sounded assured of their merchandise going into the NFL season, Kelley stated. DraftKings highlighted higher than anticipated progress in driving parlay combine, whereas current new merchandise like stacks and ghost legs ought to maintain momentum going. They additionally see additional alternative to regulate mounted prices with AI.

BetMGM and Caesars have improved their apps considerably, permitting extra deal with prospects and personalization and fewer on product catchup, Kelley stated.

Operators with land-based publicity have been cautious about prediction markets. In igaming, operators proceed to see above-market progress, with DraftKings noting a possibility to slim the hole between its robust table-game share and its present slot share.

“Consistent with messaging in the second quarter, we think DraftKings is focused on increasing casino-first play,” Kelley stated. “Management highlighted the material gap between their current table and slot shares, with room to focus on marketing and merchandising for the slot-oriented customer across both their DraftKings and Golden Nugget brands. Management still feels confident in 30%+ EBITDA margins. To offset increasing state gaming-tax rates, DraftKings sees material opportunities for fixed cost control through deployment of AI tools.”

Earlier this yr, BetMGM refined their sports activities technique to deal with the premium mass section. That has enabled them to optimize their promotion and reinvestment charge they usually appear pushed by ROIs and long-term worth, Kelley stated.

Week One of school soccer was the very best revenue-generating week for BetMGM, regardless of NFL and NBA not in season but, Kelley stated.

“Assuming a stable tax environment, it seems like BetMGM still thinks 30% EBITDA margins are attainable, but getting there might take longer than initially expected. It’s our sense that when BetMGM reaches their goal of $500 million in EBITDA, margins will be mid-teens.”

Penn administration believes they’ve closed the competitors hole, Kelley stated. ESPN Bet’s Fan Center integration is an enormous focus and may provide parlays customized to a consumer’s fantasy soccer lineup. “Our sense is Penn and ESPN will likely remain in active dialogue about their partnership as we approach the three-year anniversary next August,” Kelley stated.

Caesars administration sounded “very confident” of their product, noting that each NFL sport this season can have 175 markets in comparison with 50 final season, Kelley stated. The incremental markets are pushed by elevated live-betting choices, particularly reside same-game performs.

“While Caesars has publicly said they are exploring optionality for digital, we think they realize the importance of the companywide rewards program and benefits to an omnichannel approach,” Kelley stated.

When it involves regional casinos, Penn administration highlighted the worth of regional gaming, utilizing the instance {that a} $10 hand of blackjack nonetheless prices $10 and the leisure worth hasn’t modified.

Penn is investing in growth-capital expenditures, together with their lately opened land-based on line casino in Joliet and different ongoing tasks in Aurora, Nevada, Columbus, and Council Bluffs, Kelley stated. “Early Joliet trends sound encouraging, with more new customers visiting than anticipated. We think project capex will decline year-over-year in 2026. Management is also committed to returning capital to shareholders and plans to buy back $350 million of shares this year. We raise our Penn price outlook to $21 from $18 to reflect improved regional trends.”

As for Caesars and its regional properties, Kelley talked about client stability, enchancment in unrated play, and rated play stays good.

As for Las Vegas, Kelley admitted summer season softness, although tendencies are bettering by way of the quarter and September ought to be the very best month.

“Caesars still sounds optimistic about the fourth quarter, driven by a strong group and convention calendar and improving leisure trends,” Kelley stated.