Regional Casino Consumers Proving Resilient as Gas Prices Surge, Says Analyst
Posted on: March 20, 2026, 12:39h.
Last updated on: March 20, 2026, 12:39h.
- Even consumers on the low end are showing strength
- Analyst likes Churchill Downs, Penn Entertainment
- The national average gas price is $3.91 per gallon, according to AAA
The conflict in Iran sent the national average gas price to $3.91 a gallon today, up nearly $1 in just a month, according to AAA, but that’s not hampering business at regional casinos.
In theory, higher gas prices should be a drag on regional casinos because those venues are largely dependent on customers that live within driving distance of the properties, usually two hours away or less. Conversely, destination markets such as Las Vegas generate significantly more revenue from fly-in customers. Macquarie analyst Chad Beynon sees reasons for optimism regarding regional casinos and other leisure destinations consumers drive to.
While some express concerns around oil prices, particularly for lower-end customers and properties requiring travel, operators haven’t seen an impact and don’t expect a major deceleration,” said the analyst in report to clients released today.
He points out that regional casino gross gaming revenue (GGR) increased 3.5% year-over-year in January and the February data that’s been released thus points to another strong month, indicating solid first-quarter trends.
Churchill Downs, Penn Preferred Regional Casino Ideas
Macquarie recently held its 11th Annual Consumer Bright Ideas Conference where analysts met executives from approximately 20 consumer companies. On the regional casino side, Beynon met with management teams from Churchill Downs (NASDAQ: CHDN) and Penn Entertainment (NASDAQ: PENN), among others, coming away constructive on those two names.
Last year, Churchill Downs posted record earnings before interest, taxes, depreciation, and amortization (EBITDA) and revenue, With the Kentucky Derby right around the corner, the operator could benefit from enhancements made at its namesake racetrack. Beynon adds Churchill Downs expects consumers to see benefits from the One Big Beautiful Bill Act (OBBBA) and they’re displaying “resiliency in the face of higher gas prices.”
He rates the stock “outperform” with a $150 price target. As for Penn Entertainment, which he rates “outperform” with a $21 price objective, he believes the largest regional casino operator will benefit from new/refreshed properties, some of which are showing early signs of success. Prediction markets (PM) and free cash flow (FCF) were also on the docket in the Penn conversations.
“Management also talked about its view on PM which remains in-line with other retail companies with Gaming licenses,” observes Beynon. “Next on FCF, investors remain focused on PENN’s ability to begin generating FCF, deleveraging and changing the PENN narrative. Lastly, while the calendar works against us in March (strongest month of the three), OBBB should benefit the consumer.”
Regional Casino Real Estate Outlook
Strength at regional casinos is good news for landlords Gaming and Leisure Properties (NASDAQ: GLPI) and VICI Properties (NYSE: VICI) because they’re owners of significant amounts of real estate on which those gaming venues reside. The strong operating environment implies operators are able to cover their lease obligations.
On a related note, Beynon touched on the evolving situation with VICI and the Caesars Entertainment (NASDAQ: CZR) regional master lease, which has long been a source of concern for investors of both companies.
“The bulk of the meetings focused on the Caesar’s lease (30% of rent roll), the Master Lease and change of control terms,” concludes Beynon. “As a reminder, the lease has healthy coverage, but the Regional rent has increased 13% since ’21, while the EBITDAR for that segment has declined by 28%.”
He rates VICI “outperform” with a $36 price target.
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