Anticipated "slight" development in the local real estate sector of Las Vegas by 2025, as per the predictions of an analyst.

In the vibrant world of Las Vegas gaming, 2024 has proven to be an "interesting year" according to analyst Carlo Santarelli. The year has seen a mix of growth, disruptions, and standout performances from various casinos.

One of the standout performers has been the Fontainebleau Las Vegas, the casino that opened its doors in 2023 and is estimated to generate an EBITDAR income of about $160 million in 2024. Meanwhile, Durango Casino & Resort, which came online in December 2023, has also shown strong returns.

However, the year has not been without its challenges. Same-store gaming revenue was down in 2024, while operating expenses edged higher. This trend was particularly noticeable in casinos like Red Rock, which has planned renovations at Sunset Station for $53 million and a room remodel at Green Valley Ranch for $150 million, causing EBITDA disruptions of $5.4 million and $11.5 million respectively in 2025. Durango too has planned parking, gaming, and food and beverage expansions at a cost of $116 million, causing about $5.9 million EBITDA disruption in 2025.

Santarelli estimates Durango's annual net revenue for 2024 will be approximately $340 million, with Durango delivering about $160 million of property-level EBITDAR. Boyd Gaming, on the other hand, served as a clear standout in the regional group, while both Red Rock and Golden Entertainment lagged in 2024.

The growth in gaming revenue since 2019 has been impressive, with a 5.1% compounded annual rate (CAGR), but it is worth noting that this growth is a material discount to the 23% inflation experienced since 2019. If the 3% CAGR had continued post-2019, the last 12 months would have been about $2.82 billion, relative to the $3.12 billion achieved over the last 12 months.

Through October, the locals-market gaming revenue is up about 6%, but this growth is attributed solely to the addition of Durango. Market-wide EBITDAR is likely to be down high single digits year-over-year in 2024. External expense pressures are expected to subside a bit from a rate of change perspective in 2025, but still grow, and modest revenue growth is likely enough to maintain margins in 2025.

Looking ahead to 2025, casinos in Las Vegas are expected to grow modestly according to Deutsche Bank year-end analysis. Boyd Gaming, for instance, is planning a room refresh at the Orleans and the completion of the ongoing Suncoast overhaul, which includes a new food hall and expanded meeting space.

In conclusion, while 2024 has been an interesting year in the Las Vegas locals market, with its share of challenges and successes, the outlook for 2025 remains promising, with modest growth expected for the casinos in the city.