The Las Vegas locals gaming market is expected to see modest growth in 2025, as operators face headwinds from softer same-store revenue trends and rising operational costs, according to a year-end analysis by Deutsche Bank.
Gaming revenue is anticipated to grow at a favorable cadence, said Deutsche Bank analyst Carlo Santarelli. However, he cautioned that market forecasts could prove “aggressive” without broader growth in the sector.
Durango Casino & Resort, which opened in December 2023, has emerged as a major growth driver for the locals market. The property is projected to deliver $160 million in EBITDAR in 2024, with annual gross gaming revenue estimated at $260 million.
Despite Durango’s strong performance, its impact on the wider market has been double-edged. Same-store gaming revenue is down 3% year-to-date through October, partly due to cannibalization from the new property. Market-wide EBITDAR for 2024 is expected to decline by high single digits year-on-year.
The locals market has seen robust post-pandemic growth, with gaming revenue rising at a 5.1% compound annual growth rate (CAGR) since 2019, outpacing the 0.9% CAGR in workforce growth.
“Gaming revenue per member of the workforce is up 4.2% over the last 12 months, primarily driven by the impact of Durango,” Santarelli said. However, he noted concerns stemming from slowing workforce growth and challenging comparison in 2025.
Key operators in the locals market, including Boyd Gaming and Red Rock Resorts, are focusing on capital projects to drive future growth.
- Boyd Gaming: Ongoing renovations include a room refresh at The Orleans and a major overhaul at Suncoast, which features a new food hall and expanded meeting space. These projects are expected to enhance non-gaming revenue in 2025.
- Red Rock Resorts: The company is undertaking $53 million in renovations at Sunset Station, causing a $5.4 million EBITDA disruption, and a $150 million room remodel at Green Valley Ranch, which will disrupt $11.5 million in EBITDA. The benefits are expected to materialize in 2026.
- Golden Entertainment: The operator has experienced lower stock performance in 2024 and is lagging alongside Red Rock Resorts in regional comparisons.
Operators have moderated expense growth following sharp increases in 2022, with labor, insurance, and energy costs continuing to rise.
“Operators have done a solid job curbing aggressive expense growth while responding to a softer same-store revenue environment,” said Santarelli. Modest revenue growth in 2025 is expected to maintain margins, though profitability will likely hinge on revenue performance.
Non-gaming revenue trends appear mixed for 2025. While Boyd’s capital spending is likely to be additive to revenues, Red Rock’s renovations could weigh on performance during the year, with benefits expected the following year.
Looking ahead, Deutsche Bank sees the Las Vegas locals market as “frothy,” with post-COVID growth trends exceeding historical norms. However, Santarelli highlighted the importance of sustainable growth, adding: “A favorable and growing gaming revenue cadence in 2025 would go a long way toward outperformance in both Red Rock and Boyd.”
Original article: https://www.yogonet.com/international/news/2025/01/03/90608-las-vegas-locals-gaming-market-poised-for-modest-growth-in-2025-says-deutsche-bank
