Analyst Warns of Market Slowdown in Rest of 2024

In his investor report, Greff noted that economic slowdown and lower consumer spending are weighing on the gambling market outlook. He emphasized that these factors, along with other important changes in the industry, are leading to lower forecasts for the remainder of the year.

Greff noted the negative sentiment dominating the US gambling sector, where the outlook remains muted. However, the analyst noted that the impact on Macau could be even more significant given the ongoing macroeconomic and geopolitical tensions between Macau and China.

However, Greff pointed to positive results for the Las Vegas Strip in the second quarter, where EBITDAR beat expectations due to strong non-gambling spending. However, the analyst cautioned that expectations for Las Vegas Strip operators are tempered by the expected decline in consumer activity and weak sales for the upcoming Formula 1 race, as previously noted by MGM Resorts.

Greff also touched on the performance of several large operators. In addition to MGM Resorts, he noted Caesars and Red Rock Resorts. According to him, MGM and Caesars have strong positions on the Las Vegas Strip and attractive valuations, with MGM having untapped growth potential and Caesars having significant opportunities to increase free cash flow and reduce its debt load. He also emphasized the importance of iCasino's profit growth and asset monetization. Greff also highlighted the stable development of Red Rock Resorts, which is showing positive dynamics thanks to the successful launch of the Durango casino and resort, as well as the favorable situation in the local Las Vegas market and recent insider share purchases.