In spite of construction disruption that should have dampened revenues, Station Casinos beat Wall Street expectations for 4Q25. Cash flow of $213 million came in 4% above Wall Street’s consensus projection. Not to be outdone, revenues of $512 million were also ahead of forecasts. Investors were further pleased with $48 million in share repurchases and a $1/share special dividend. For one, Barry Jonas of Truist Securities was moved to boost his price target from $75/share to $80.
Revenue and cash flow alike set 4Q revenues for Station. Hotel revenues plummeted 10% (fewer tourists, remember) but casino winnings were up 5% and F&B was 1% higher. Green Valley Ranch hotel work may have further impaired the numbers, but not enough to spoil the party. Peak Green Valley disruption is yet to come, not so much at Sunset Station. The company is planning to spend as much as $425 million on expansions and upgrades this year, including a big chunk of Phase II at Durango Resort, which will cost $385 million over 18 months.
A poor Super Bowl weekend for Las Vegas in general seems not be hurting 1Q26 numbers: Station execs said their casinos were “buzzing.” Construction is full speed ahead on Station’s North Fork Rancheria project in California. Station expects to have it open late this year. Bad news for Golden Entertainment is that Station has three operational taverns in the Las Vegas Valley and, per Jonas, “has seen success capturing a younger, male-skewing demographic.” Ouch. Three more taverns are coming soon.
“Solid as a rock” was J.P. Morgan analyst Daniel Politzer‘s take on the 4Q report. Station, he wrote, “has yet to see any signs of softness in its business, as its properties tend to attract higher income/higher net worth customers, and … Nevada continues to attract affluent California/West Coast transplants.” So exuberant was Politzer that he saw Jonas’ $5 and raised him $5 more, bringing his price target up to $76/share.
“It’s well understood that [Station] is a pure-play operator in the LV Locals market, but it’s less appreciated that this market is effectively one of the last frontiers in brick/mortar gaming,” Politzer continued. “There’s low risk of online cannibalization (Nevada has been among the most successful states fighting online/prediction markets), de minimis brick/mortar gaming supply risk ([Station] owns most of the remaining gaming-entitled land), and minimal risk of higher taxes … we think [Station’s] scarcity value warrants a premium valuation within Gaming.“
Politzer projected steady revenue ($511 million) in 1Q26 and cash flow of $222 million. Chimed in David Katz of Jefferies Equity Research, “Capital projects remain on time and on budget, complemented with a newly announced next phase at Sunset Station.” The latter “includes enhancements to the movie theaters, relocation of the bingo area, and conversion of the buffet space to a high-end steakhouse and high-limit table games room.” The year-long project will cost $87 million.
Even if hotel revenues were down, Deutsche Bank analyst Steven Pizzella picked up on a management comment that Station was capturing market share from the Las Vegas Strip. So things could be a lot worse—especially since Station says it’s capturing high-end customers, the very ones the Strip thought it had locked up. “Overwhelmingly positive” are user comments on Phase I of the Durango enlargement. Phase II entails another 400 slot machines, a bowling alley (a must in Las Vegas) and “incremental amenities.” Station, Pizzella concluded, “will continue to drive strong returns, and is largely isolated from competitive new supply.”
CHEERS & JEERS …
Cheers to the Department of Defense, a purveyor of slot machines, for permitting the study of problem gambling among our brave servicemen and -women. A little-noticed provision of the latest DoD authorization adds disordered gambling to the list of diseases eligible for scrutiny under the Peer Reviewed Medical Research Program. This is a win for the National Council on Problem Gambling, MGM Resorts International, FanDuel and BetMGM, all of which laudably advocated for the adjustment. Over 1.5% of our active-duty forces and even more of our reserves self-report gambling addictions. Considering that the Pentagon deploys 3,000 slot machines, from which it derives $100 million a year, it’s not too much to ask for it to look into the less-salubrious side effects of on-base gambling. Currently, there are only two treatment centers (one in Cleveland and the other in Las Vegas) and gambling disorders will have to fight for a slice of a $370 million Pentagon pie … but it’s a good start.
Jeers to Polymarket, which demonstrated yet again why prediction markets are the toxic slime of the gambling industry, worse even than offshore iGaming operators. Showing its ability to find new depths of depravity, Polymarket started taking wagers on the Nancy Guthrie kidnapping. Turning a buck off the grief of Savannah Guthrie and her family is so vile that words fail us. Don’t look to the Commodity Futures Trading Commission for relief: sock puppet Michael Selig has thrown up his hands in mock-impotence. And, as GamblingHarm.org posted, “some U.S.-facing prediction markets have embraced shock value, sometimes posting inflammatory or false content on social media.” If there is to be any decency in event contracts, the pressure will have to come from irate state legislators and brave congressmen. We’re not holding our breath, alas.
Cheers to Bally’s Corp. for finding new liquidity. This was done partly by dint of selling one of the company’s few remaining assets, Bally’s Lincoln, in Rhode Island, for $700 million. And it was partially accomplished by taking out a $1.1 billion loan from a consortium of lenders. Bally’s will put some of the newfound lucre toward retiring $1.5 billion in debt, and some of it finishing $1.7 billion Bally’s Chicago and starting $4 billon Bally’s Bronx. The official press release begged the question of what will happen to $2.2 billion Bally’s Las Vegas, which was supposed to be already underway but which has not a penny of capital to its name. Bally’s had tried to divert attention with a flurry of Clark County paperwork, mistaking movement for progress.
Jeers to the Mississippi Lege for an abhorrent, Big Brother provision that is headed to the governor’s desk. The bill would turn casinos into instruments of the government. How? By empowering/burdening them with the collection of delinquent child support, to be extracted from the jackpots of any deadbeat parent who happens to win more than $2,000, thereby piggybacking governmental intervention onto the “IRS lockdown” that is already in place. This bad idea has been floated at the federal level before, and beaten back, but the Deep South was never known for a shortage of village idiots. To prove our point, only names on the delinquency list would be checked, not Social Security numbers or other telltale markers. Gee, what could go wrong? Mistaken identity much? If left unchecked, this mental fungus is going to spread to other statehouses, so Big Gaming and the American Gaming Association need to get off their duffs, and get active in opposition.
Cheers to the loathsome Adelson family … if they carry through with selling the Dallas Mavericks, the NBA team they have ruined. This bunch of deadbeats (the Adelsons, that is) has been dining off Papa Sheldon’s legacy for far too long. As Texas lawyer Chris Kratovil explained, “casino gambling is not coming to Texas anytime soon, and the only reason the Adelsons bought the Mavs was to serve as the anchor of a massive new casino-resort-arena … But they misread the Texas Legislature, and despite tens of millions of dollars in political donations and lobbyist fees, casino gambling is no closer to coming to Texas than the day the Adelsons bought the team.” Indeed, Dr. Miram G. Adelson‘s repeated, losing wagers on the Texas GOP have become a running definition of throwing good money after bad. Unfortunately, the Adelsons told their pet newspaper, the Las Vegas Review-Journal that they’re not only NOT selling but they’re doubling down on the Mavericks instead. Dallas sports fans have a right to ask what they’ve done to deserve this. Let’s hope for an Adelsonian change of mind.
Jeers to Michigan Gov. Gretchen Whitmer (D), the mother of Wolverine State iGaming, now trying to smother it in the cradle, evidently. When budgets are tight, where do state governments go for more money? Gambling, of course. So gambling is earmarked for tax increases. Operators who gross more than $185 million per year off iGaming would see their rate ratcheted up from 28% to 36%. Yes, it’s true that other states tax iGaming far more but that’s not a good excuse. Whitmer is also looking to scare up $39 million with a handle tax: $0.25 per wager for the first 20 million bets, $0.50 a bet beyond that. This is a terrible idea from all standpoints. Whitmer might profitably look to Illinois, where the same thing has been implemented and it’s been a small fiscal disaster for Gov. J.B. Pritzker (D), strangling the goose that laid the golden egg. Of course, the ultimate losers are players, because it’s not like FanDuel, DraftKings and BetMGM aren’t going to pass the increased fees onto John Q. Consumer. You can bet on it.