Las Vegas casinos face a rocky long-term future, says a Wall Street analyst, with Sin City’s growth looking “scarce” despite indications operators will post strong second-quarter results.
The warning came from the Jefferies Equity Research analyst David Katz in a note to investors, CDC Gaming reported.
“Increasing headwinds” await both Las Vegas and Macao casinos, Katz said, adding: “We believe growth in the sector is scarce.”
The prediction comes as several major US casino stock prices continue to stagnate following an 80% drop in strip casino income in 2025.
MGM Resorts’ share price is down almost 1% over the past five days, while the S&P 500 index of leading shares climbed over 2%. Wynn Resorts fell even further, dropping almost 3% over the same time period.
Sin City Slump: Las Vegas Casinos Face Challenges
Despite the share price stagnation, financial figures from Las Vegas casino floors all point to good news for operators at the end of the second quarter.
Katz spoke of a “positive Q2 amid longer-term uncertainty.”
“Longer-term growth durability is less certain absent a more pronounced recovery in leisure demand, given the inherent cyclical nature of group travel and evidence that all-inclusive promotional offerings are stabilizing lower-end consumer spend,” said Katz
MGM Resorts’ most recent quarterly report presented investors with a mixed financial picture. While year-on-year net Strip revenues rose to $2.18 billion, pre-tax earnings dropped 8% over the same period.
In the financial year 2025, net income dropped by over 70%.
While the firm’s online and Asian arms continue to boom, its Strip operations face challenges amid takeover discussions and talk of a wider Sin City downturn.
Katz, however, said that MGM Resorts’ second-quarter trends indicated solidity, although he said other casino players could face a stock market “pullback” despite recent share price rises.
Another major Strip player, Las Vegas Sands “remains in transition,” the analyst said. Katz said that Sands was “reorienting toward premium mass customers.” This, he said, would likely put pressure on margins over the medium term.
The data all point to a short-term “apparent Vegas recovery,” said Katz, with April-May gambling wins up 10% and a number of Las Vegas conventions helping to drive up customer spending.
Baccarat revenues climbed over 15% in April and skyrocketed by almost 59% in May.
Sustained Slowdown
Tumbling visitor numbers, however, suggest a more sustained slowdown for Las Vegas.
Last week, the Clark County Department of Aviation said May passenger traffic at Harry Reid International Airport fell by over 8.4% year-on-year. That was despite an almost 15% rise in convention attendance and sold-out BTS concerts.
Air arrivals are down over 6% this year, following 2025 reports of a broader drop in international visitors and social media videos showing largely empty casino floors.
While some are skeptical about the Strip’s future in a casino sector that is becoming increasingly digitized, Katz said possible takeovers could have a “catalyst” effect.
The Barry Diller-led media giant People Inc is aiming to complete a $18 billion takeover of MGM.
Diller has called MGM’s ownership of around 40% of the Strip the firm’s “key asset,” and has also called the Strip an “entertainment nucleus.”
Fertitta Entertainment, meanwhile, has already penned an agreement to snap up the Las Vegas behemoth Caesars in a deal worth $17.9 billion.
Macao Suffering World Cup Hangover
Most Macao casino share prices have dropped over the past month and continued to stagnate after peaking in late February.
June has been a poor month for Macao casino revenues, with gambling spend dropping 12% to reach its lowest levels since December 2022.
The falls come as something of a surprise, particularly as tourist arrival numbers continue to soar.
Katz, like many other analysts, said the World Cup is partly to blame. Experts say they expect a turnaround when the tournament ends.
