Regional Casino Revenue Slowed in August, Goldman Sachs Reports

Regional casino revenues decelerated in August, with several key states reporting year-over-year declines after months of modest growth, according to a new report from Goldman Sachs. The investment bank attributed some of the softness to unfavorable calendar shifts, including the timing of weekends and the Labor Day holiday.

Statewide Declines

The August data revealed a notable reversal from trends seen earlier in the summer. Across most states it tracks, Goldman Sachs noted that revenue, which had grown 4% in May, 2% in June, and 1% in July, turned negative in August.

Key state-level performance includes:

• Iowa: Gross gaming revenue fell 13% year-over-year, a significant drop from the 6% decline seen in July.
• Indiana: Revenue declined 5% in August, reversing a 3% gain from the prior month.
• Kansas: A 2% revenue drop was recorded, compared to 3% growth in July.

Impact on Major Operators

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The slowdown had a varied impact on the sector's largest companies, based on properties in states that have reported August results so far.

Caesars Entertainment (NASDAQ:CZR) saw revenues fall 8% year-over-year across its reporting regional properties. The decline was driven by significant drops at properties like Horseshoe Hammond in Indiana, which was down 30%, and its two Iowa casinos, which both fell 19%.

Boyd Gaming (NYSE:BYD) recorded an aggregate revenue decline of 3% year-over-year. Its properties in Iowa saw declines ranging from 7% to 15%, while its Belterra Casino in Indiana dropped 10%. The Kansas Star Casino & Resort's revenue remained flat.

Penn Entertainment (NASDAQ:PENN) was an outlier, with its reporting properties showing a collective revenue increase of 1% year-over-year. However, performance was mixed, with its Ameristar properties in Iowa and Indiana declining 20% and 17%, respectively, while Hollywood Lawrenceburg in Indiana grew 4%.