Gaming stocks have performed well in 2023 as Las Vegas travel trends have normalized and Macau gaming has surged following the lifting of China's COVID-19 restrictions.
Casino fundamentals remain positive heading into the summer travel season, according to Bank of America analyst Shaun Kelley.
The Numbers: Overall U.S. travel trends were somewhat soft in April — up just 5% from a year ago, Kelley says. Growth in international travel helped offset weakness in domestic travel in the month.
Related Link: Gold Rush to Big Bucks: Top Executives To Appear At Benzinga Titans Sports Betting Summit
In Las Vegas, Strip credit card spending was up 22% in April compared to pre-pandemic 2019 levels. Hotel room rates were also up 30% in April compared to 2019 levels. May Las Vegas room rates are up just 1% from a year ago, but June and July room rates are up 12% and 8%, respectively.
In China, hotel revenue per available room (RevPAR) was still 4% below 2019 levels in April but was up 9% during the Golden Week holiday, which is good news for Macau stocks. Macau reported $1.83 billion in GGR, up 15.6% from March and up 449.9% from a year ago.
One of the biggest growth trends in the gaming industry in recent years has been sports betting, particularly online sports betting. In the first quarter, Bank of America estimates iGaming and OSB gross gaming revenue was up 10% on a quarterly basis.
Related Link: 2023 NFL Schedule: Betting Odds For Wins By Team, Which Teams Could Have Biggest Rebound From 2022
How To Play It: Bank of America has the following ratings on top sports betting and gaming stocks:
- DraftKings Inc DKNG, Neutral rating, $25 target.
- Las Vegas Sands Corp. LVS, Neutral rating, $66 target.
- Wynn Resorts, Limited WYNN, Neutral rating, $120 target.
- Caesars Entertainment Inc CZR, Neutral rating, $55 target.
- MGM Resorts International MGM, Neutral rating, $50 target.
- PENN Entertainment Inc PENN, Neutral rating, $32 target.
Benzinga's Take: The sports betting industry will be a $140 billion market by 2026.
For more on the sports betting landscape and what could be next for popular betting segments and legislation, register and secure a spot for the Benzinga Sports Betting Titans virtual event on May 24.
Image by Peter Lomas from Pixabay
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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