Barry Jonas called it. His report on MGM Resorts International‘s 3Q25 earnings was headlined “The Summer the Strip Turned Pretty … Bad.” Ouch. But true. He kept a “Buy” rating on the stock but shaved a dollar off his price target, now $47/share. Jonas reported that MGM is leaning on high-end business, hoping for stabilization in 4Q and growth next year. Is CEO Bill Hornbuckle seeing the same indicators we are? Because the latest “Beige Book” for the Upper Midwest was pretty dire. If the rest of the U.S. is suffering comparably, MGM is going to feel the pain.
Long story short, MGM missed cash-flow projections on the Las Vegas Strip, which was offset by a 7% beat in Macao. Overall revenue was $4.3 billion, so don’t look for Hornbuckle to start modeling hair shirts. In Las Vegas, MGM’s mass-market business remained soft, especially at Excalibur and Luxor. Vegas room rates sagged to $78/night. Since nothing fazes the wealthy, luxury business was up but bread-and-butter trade was not, even on weekends. A good thing MGM had the foresight to partner with Marriott International, which has filled 900K room nights to date and was going strong through last month. MGM claims that convention business is coming back and that Las Vegas Grand Prix ticket sales have improved. (If nobody else benefits from Formula One, MGM will.)
On the regional-casino side, Borgata continues to set the Atlantic City pace, achieving its best-ever slot win and table game wagering. Not surprisingly, MGM will heat up its pursuit of high-end players. Management flirted with additional regional-casino sales following a $546 million payday for Northfield Park. Hornbuckle has long since washed his hands of MGM Springfield, so it is probably next on the chopping block. Noting that consumer sentiment overall is “bearish,” Deutsche Bank analyst Steven Pizzella opined that MGM is dogged by “a pattern of negative Las Vegas earnings revisions, that we believe has to be reversed, before investors will buy the bad-to-less-bad Las Vegas story.”
Analyst Salvatore diPietro minced zero words, dismissing MGM’s quarter as “weak.” J.P. Morgan analyst Daniel Politzer, however, saw “brighter days ahead.” That would constitute flat revenue and a continued cash flow slump. Can you say “lowered expectations”? We thought you could. Politzer predicted that 4Q25 Vegas revenues and cash flow would be off 3% and 6% respectively. He continued, “we would love to get more positive here, but for now, we continue to err on the more cautious side,” citing an 8% dent in Vegas visitation. He was particularly concerned for MGM’s lower-end operations in Sin City. None of the analysts mentioned the sad fate of MGM’s New York City aspirations, for which a big-ass writeoff is expected. For that matter, MGM has lumbered Vici Properties with a lame-duck asset, as nobody is likely to want MGM Empire City and its Class II gaming now that MGM has opted out of Class II, meaning that Empire City will soon be, by definition, obsolete. Nice going, guys.
“Vegas Weaker Than Weak” was Jefferies Equity Research analyst David Katz‘s verdict on Caesars Entertainment‘s quarter, happy talk from CEO Tom Reeg notwithstanding. Katz put a “Buy” rating and $39/share target on the stock. Caesars’ online operations also sucked wind, which doesn’t surprise us, given the lackluster performance of Caesars Sportsbook. Katz expected much better from Caesars than he got, including $884 million in cash flow compared to the $959 million he anticipated. The Roman Empire was unlucky in its hold, blowing a $43 million hole in its projections. The Caesars Digital miss was particularly bad, with $70 million in cash flow expected and $28 million delivered. (Regional casinos were largely on the money.)
Caesars obviously has been doing heavy promotional activity at the regional properties and its expects the resultant business to hold up, although players have been shown to be fickle when promos go away. Mergers and acquisitions are largely off the table (Whew!), while mooted stock repurchases should shore up the share price. “We believe investors continue playing for a positive inflection in estimates, which has been slow in coming. Las Vegas is setting up well for 4Q, Digital should have its strongest quarter and Regionals is showing signs of turning a positive corner,” Katz concluded.
“Strip leisure demand remains soft,” said Politzer, adding that 4Q25 looks relatively better. He added that CZR’s reinvestment in its properties (a big no-no in the Gary Loveman days) is working well. Politzer continued, “we’d say OSB sentiment is the only area more negative than the LV Strip right now. With CZR fundamentals a mixed bag and estimates still edging lower, investor appetite remains subdued.” He noted improving trends on the Las Vegas Strip, while allowing that “the macro outlook remains uncertain.” Regionally, both Caesars New Orleans (above) and Caesars Virginia were said to coming through big-time. Hence the importance of flashing the Caesars brand … which Loveman valued so highly he kept it hidden in the cupboard.
Pizzella kindly called the Caesars results “mixed,” saying of a big revenue miss in Las Vegas, “operating trends improved sequentially throughout the quarter, as July was the worst month, August got better, and September also got better, being the strongest month of the 3Q25.” Even so, customers were betting less, whether at the tables or the slots. F&B was down 5% and room revenues swooned 12%. Jonas noted that an expected promo war out in the provinces had yet to materialize and added that CZR “has been a challenging stock to own, but we see risk reward skewed positive at this valuation, esp. with the prospect of improving Vegas trends, and Regional/Digital growth.“
Management is pinning its 4Q25 hopes on the recent Oracle conference (20K souls) and the upcoming BravoCon (27K heads in beds). F1 is said to be better than last year but not as good as Year One, which doesn’t strike us as how that business model was supposed to work. Reeg “also expects a record 2026 back on the strength of group business.” Inflation being what it is, we don’t know where consumers are going to find all those discretionary dollars, but so be it. Caesars brass also claims it “does not intend to engage in any sort of promotional battle.” Uh-huh. At least they shouldn’t need to prime the pump for Caesars Republic in Lake Tahoe, which ought to be ready by June at the latest.
No Dice. If feckless Bally’s Corp. was hoping to stampede Gaming & Leisure Properties Inc. into financing its $3 billion Las Vegas pipe dream by announcing an April start of construction, it failed signally. Although GLPI CEO Peter Carlino professed to love Soo Kim‘s jumbled concept for the Tropicana Las Vegas site, he wasn’t to be budged. In yesterday’s 3Q25 earnings call, Carlino said GLPI might “participate” in development of the land … and might not. Likewise, he made it crystal clear that GLPI might put some money into Bally’s New York, should it get the nod from New York State, but that GLPI would not be the sole financier of that $4 billion pipe dream. GLPI execs added that there is a lot of potential investment chasing New York City. Translation: Kim should have no trouble finding the scratch elsewhere. In other words, the financing ball is in Kim’s court and GLPI has no intention of lugging his sorry ass from one metro market to another.
Speaking of which, GLPI brass hinted that construction of Bally’s Chicago might roll on into 2027, which seems entirely reasonable, given the hiccups to date. However, Bally’s being Bally’s, it is planning to rush into that most dreaded of casino phenomena: the soft opening. They want that casino open ASAP. Well, if Chicagoland has been quantifiably underwhelmed by temporary Bally’s Casino, how disappointed will it be if Bally’s trots out a half-finished megaresort 10 months hence?
Finally, has anybody else noticed something daffy about the Bally’s Las Vegas rendering? By building it right up to the sidewalk in the fashion depicted, Bally’s guarantees that there will be NO street views of what is supposedly its drawing card: the vanity park being built for the Sacramento Athletics. Then again, no credible source with whom we have talked expects this failsino to happen.
Gridiron Grumbles: They are who we thought they were. That’d be the Miami Dolphins, who were eviscerated 28-6 by the Lamar Jackson-led Baltimore Ravens on Thursday The Dolphins obligingly self-destructed, giving chance after chance to the Ravens, a team so talented it hardly needs the extra opportunities it got—and capitalized upon. Miami’s Sunday demolition of the Atlanta Falcons looks like a fluke, a mirage, an aberration. Meanwhile, next Thursday’s game sees the Las Vegas Raiders offered as a sacrifice to the resurgent Denver Broncos, a team that should carve up the hapless Silver & Black like a Thanksgiving turkey. Speaking of resurgent, with the New England Patriots an unlikely 6-2 and sitting atop their division, is it too soon to anoint Mike Vrabel as Coach of Year? We think not.