Stock Market Forum Wall Street Bets Discusses New York OSB, Monarch Casino, Trade Tariffs, and Foot Traffic
In the ever-evolving landscape of the gaming industry, a notable trend has emerged: the surge in online sports betting volumes and revenues in key states across the US. This expansion, particularly in states like New York, is providing significant opportunities for casino and resort companies with sports betting operations or partnerships.
Comparatively, traditional casino foot traffic continues to show mixed results. For instance, Atlantic City's casino foot traffic was down -19.5% compared to 2019 levels, reflecting the ongoing normalization of traffic trends post-COVID. On the other hand, Massachusetts' casino foot traffic is up +7.5% compared to the same period last year, while Pennsylvania's casino foot traffic is up 22.2% compared to 2019 levels. However, Illinois' casino foot traffic is running -13.1% lower than 2019 levels.
The strength of the online sports betting market is undeniable. New York consistently records over $2 billion in monthly betting handle and generates substantial sportsbook revenue. The hold rates, which represent the percentage of the total amount wagered that is retained as revenue, have been steadily increasing, with the current hold rate for New York's online sports betting standing at 10.7%, albeit a slight decrease of -61 basis points year-over-year.
This growth is benefiting companies like Monarch Casino & Resorts and Red Rock Resorts, as their sportsbook platforms and associated gaming businesses see increased revenue. For instance, Monarch Casino & Resorts' second-quarter Adjusted EBITDA of $51.3 million exceeded expectations of $51.1M. Following the beat, Jefferies analyst David Katz raised their estimates for Monarch Casino & Resorts, primarily in Reno, to reflect the expected ramp.
Other states also show robust betting amounts. Pennsylvania's online sports betting handle is tracking +3% year-over-year, and the hold rate for the week ending July 13 was 10.6%, slightly lower than the 2024 comparable period's 11.3%.
However, volatility remains in the monthly performance due to competition and renovations in specific locations. For instance, the quarter presented upside from early strength from the renovations in Reno and from gaining share in Black Hawk.
Regulatory developments and increased advertising oversight in states like New York can influence market dynamics and corporate strategies for these gambling companies. J.P. Morgan analyst Daniel Politzer reviewed New York State's online sports betting on July 17.
In summary, the trend toward rising online sports betting volumes and revenues in major states directly benefits companies like Monarch Casino & Resorts and Red Rock Resorts by expanding their market opportunities and revenue streams in regulated environments. This growth is expected to continue enhancing corporate earnings potential and shareholder value for these companies involved in the sports betting and casino sectors.
- In the casino-and-gambling scene, while physical casino foot traffic has exhibited varying results across different states, the online sports betting market, particularly in states like New York, has registered unprecedented growth.
- Notably, the rise in online sports betting volumes and revenues is creating substantial opportunities for casino-personalities and companies, such as Monarch Casino & Resorts and Red Rock Resorts, with sports betting operations or partnerships.
- Concurrently, within the casino-culture, sports betting and sports-betting-related operations are emerging as significant contributors to company earnings and shareholder value, given their increasing popularity and regulatory support.
