AI Could Unlock Big Earnings Upside for Casinos
Posted on: May 19, 2026, 04:19h.
Last updated on: May 19, 2026, 04:19h.
- Casino industry has been a slow AI adopter
- But the technology could unleash significant long-term earnings growth
- Gaming companies experimenting with various AI use cases
Relative to other industries, casino gaming is proving to be a slow adopter of artificial intelligence (AI), but as the gaming world ramps up its embrace of this technology, it has the potential to garner substantial long-term earnings growth.
Clayton Peister of Differential Labs, a company that works with land-based casino and iGaming operators on AI adoption, recently joined Truist Securities analyst Barry Jonas to discuss AI trends in the gaming industry. Two clear takeaways from the conversation: the AI/gaming intersection is still in its infancy, but when it matures, it could stoke massive earnings before interest, taxes, depreciation and amortization (EBITDA) growth.
Net-net, most early AI initiatives haven’t yet reached their potential as operators have focused largely on technical wiring rather than vision,” observes Jonas. “Over time, Mr. Peister sees a real opportunity for AI to unlock ~20-30% EBITDA upside for both land-based and digital casinos.”
Unleashing that earnings growth potential is a different matter.
Casino Industry Needs to Bridge AI Gaps
Gaming companies have multiple ways of deploying AI and while that versatility is a plus, the industry needs to close some chasms to harness the true potential of the technology.
As Peister noted in the Truist conversation, casino industry usage of AI currently relies heavily on machine learning technology, but that results in not tapping into the full capabilities of generative AI (GenAI) and large language models (LLMs).
“Peister stated that the industry has tried and failed to adopt AI by forcing the line-level team to radically change process, but through LLMs, Differential Labs are adapting the AI to the existing processes,” notes Jonas. “Net-net, LLMs working with machine learning brings the 10-20% EBITDA uplift within reach.”
The Differential Labs is executive said LLMs can improve casino operators’ real-time marketing, risk management, asset optimization, patron-level strategy and reinvestment objectives — all of which can pave the way for increased EBITDA.
Legacy Systems Hinder Casino AI Efforts
Some asset-light gaming companies, including DraftKings (NASDAQ: DKNG) and FanDuel owner Flutter Entertainment (NYSE: FLUT), are already emerging as AI adoption leaders and there’s evidence suggesting some casino operators in Asia are making AI strides.
In the US, realizing earnings upside and other AI benefits is undoubtedly attractive to land-based operators, but they’re contending with headwinds created by legacy management systems.
“A significant implementation moat exists due to legacy Casino Management Systems (CMS) and market-specific regulatory constraints. Existing CMS frameworks are frequently static and highly regulated, forcing innovative operators to build an ecosystem of applications around the core to bypass data bottlenecks,” notes Jonas.
In the Truist discussion, Peister noted US-based casino operators are currently largely focused on AI is a labor cost savings tool, but that could change over time as those companies increasingly leverage cloud computing technology.
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