Las Vegas Q4 GGR Unlikely to Surprise to Upside Amid Tough Comps

Following a tepid September reading of Nevada gross gaming revenue (GGR), some analysts believe there’s limited potential for Las Vegas Strip casino operators to materially surprise to the upside in the fourth quarter.

In a new report to clients, Macquarie analyst Chad Beynon said tougher year-over-year comparisons indicate Strip revenue for the current quarter is likely to meet Wall Street estimates, not exceed those forecasts in material fashion. Last month, Strip operators notched revenue of $728, a year-over-year decline facilitated by bad baccarat luck and September having one less reporting day than it did in 2023.

With Vegas consensus coming down ~2% over the last month, we now expect Vegas segments to meet consensus,” observed Beynon. “We remain positive on the non-gaming outlook in Vegas given strong group travel and events calendar, but we are becoming more cautious on slowing leisure travel demand, which could lead to a more competitive promotional environment and hurt Vegas margins.”

Comparisons, or “comps” for the current quarter and the first three months of 2025 could be difficult to beat because enthusiasm for the Las Vegas Grand Prix isn’t on par with last year and, as Beynon noted, Las Vegas hosted the Super Bowl in February 2024, but that event is being held in New Orleans in February 2025.

Caesars Shows Risks of Tough Comps

Caesars Entertainment (NASDAQ: CZR) delivered third-quarter results today after the close of US markets and the stock faltered in after-hours trading as the operator told investors revenue fell 4% to $2.87 billion.

Specific to Caesars, that company’s fourth- and first-quarter numbers could benefit from New Orleans recently hosting several Taylor Swift concerts and the next Super Bowl coming to that city. Beynon has an “outperform” rating on Caesars with a $50 price target.

In Nevada, Caesars likely gleaned some benefit from September GGR growth in Reno, but that was offset by an 8% year-over-year drop in Laughlin. The company is among the largest operators in both markets.

Las Vegas Locals Still Strong

While September GGR growth was slack on the Strip, the Las Vegas locals segment remained vibrant with revenue in that niche growing 15%. That could be a testament to new venues such as Red Rock Resorts’ (NASDAQ: RRR) in Southwest Las Vegas as well as an elevated promotional environment among some smaller independent casinos.

Many patrons of locals gaming venues are employees of Strip casinos, indicating that while revenue growth is muted on the Strip, it’s not contracting at an alarming rate.

“We view the Las Vegas locals results as a positive read-through for Red Rock and, to a lesser extent, Golden Entertainment (NASDAQ: GDEN),” added Beynon.