Casino Mergers and Acquisitions Could Surge in 2025

Supported by declining interest rates and a more favorable regulatory regime, gaming industry, including casinos, mergers and acquisitions activity could perk up in 2025.

That was one of the takeaways from Truist Securities’ recent Wicked Good 12th Annual GLLR Summit in Boston. Since September, the Federal Reserve has pared interest rates several and it’s believed President-elect Trump will push the central bank to continue doing so. Lower financing costs could make it more appealing for prospective buyers to issue debt to make acquisitions.

The velocity of discussion has improved since the Fed started down the path of rate cuts, and further, operators are positive on a more favorable Federal Trade Commission (FTC) administration,” wrote Truist analyst Barry Jonas in a report to clients. “After a theorized and actualized year of M&A in gaming tech to right-size valuations, we think 2025 has the potential to be the year of gaming operator M&A. That being said, valuation expectations and bid/ask spreads will be key determinants.”

The analyst didn’t elaborate on potential buyers and takeover targets, though the 2024 rumor mill was active and ultimately short on large-scale casino deals.

New FTC Could Help Casino Mergers and Acquisitions

Trump has nominated current FTC Commissioner Andrew Ferguson to chair the commission — a move the investment community and some political observers believe is conducive to more consolidation activity.

With new leadership soon to takeover at the FTC, the climate could become more conducive to large-scale consolidation across all industries, including gaming.

Of the casino industry consolidation rumors that popped up this year, only Boyd Gaming (NYSE: BYD) potentially moving on rival Penn Entertainment (NASDAQ: PENN) would have been likely to invite antitrust scrutiny. That was just speculation with neither company confirming talks were ever held and Penn acting as though it’s not interested in selling itself.

Online Gaming Spinoffs Possible

In his client note, Jonas highlighted another theme that could loom large in 2025: the possibility of iGaming/online sports betting spinoffs.

The analyst said management at Caesars Entertainment (NASDAQ: CZR) is disappointed regarding the lack of credit its digital operations garner related to the overall share price and could consider unlocking value by spinning out that unit. It might not be surprising to see ESPN Bet parent Penn consider a similar move because the interactive business has been an overhang on the operator’s land-based casino unit.

“We think standalone iGaming could be an underappreciated opportunity, given Penn’s extensive land-based portfolio,” added Jonas. “We continue to see state tax revisions as the largest threat to Interactive gaming. Still, despite the real prospect of more tax increase bills next year, management teams thought the prospect for the bills succeeding was low.”