After years of underperformance, the gambling market is poised for a strong comeback, according to this analyst.
Transcript:
CONWAY GITTENS: Whats your outlook for gambling market in 2025?
CHAD BENYON: Sure so, interestingly enough, the gambling market is underperformed five out of the last eight years. Now, this is a business. Historically, it’s a very good cash flow. Businesses where you have good growth in las Vegas. Good growth in the regional markets. What we saw in the past couple of years was a resurgence or kind of a beginnings of sports betting. So with underperformance in five out of the last eight years, we actually think 2025 will be a very strong year in all parts of of gaming here. The first area is going to be right there on sports betting, right? We just finished the Super Bowl. We had record viewership. We had really good engagement in terms of activity on some of these sites. And the growth in the U.S. for sports betting has grown 40 to 70% for the past three years. We don’t think we’re going to get there in 25, but we still expect 30% growth. And we think that’s enough for some of these high flying, slightly higher multiple stocks exposed to sports betting.
As we look around the globe, the next area would be Macau. So within China, that’s the second largest gaming market in the world. Macau has had a very difficult recovery since covid here. It’s still about 20% below those levels. So we are looking for some stimulus in China and in Macau to kind of boost some of that growth in that market. So we’re looking for 10% growth there. The big players in that market are Las Vegas Sands and Wynn resorts. And then bringing it back to the United States Las Vegas continues to evolve, shifting from gaming to non-gaming. You have a lot of really good entertainment acts, whether it’s sporting acts or concerts, bringing people to the city. 2024 was unfortunately about flat in terms of visitation and revenues, and we’re looking for a little bit of growth in 25, particularly as we get through the year. And the U.S. consumer just feels better about kind of, you know, where we are and their ability to spend on discretionary items.
CONWAY GITTENS: So tell me whats your view of the U.S. consumer – in terms of how they’re spending, gambling, traveling to Vegas?
CHAD BENYON: Sure in our sector we usually come to about 1 and 1/2 to 2% of people’s household income goes towards these types of things. When we look at cities, countries, different markets, that’s kind of the the sweet spot there in terms of where we arrive. So clearly the us economy needs to continue to improve for that customer to spend more. What we’ve seen since the us election. Now again, this is the animal spirits and, you know, really just kind of personal feelings of the individuals. We’ve seen some nice growth in the middle of the country. So in, you know, the Indiana’s the Iowa’s kind of those, those markets also Michigan.
The numbers came out today and we’re seeing some nice growth in January from a year over year perspective. We’ve also had a few companies report earnings, and they’ve said the casual gambler is starting to come back at a slightly higher frequency with a slightly higher budget. Now again, we’ll see what happens with the different policies that go into place, how, you know, that affects the consumer’s wallet, given that this is a highly discretionary item. But we do think that the baby boomer consumers particularly really like to play their slot machines. And we think that’s an area where people have more savings, more time. And that will be a nice trend in 25 and 26.
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