Analysts say locals casino companies are strong, will outperform Strip properties

Two gaming industry analysts, in separate reports, say the Las Vegas locals market will continue to be strong and financially outperform Strip properties.

John DeCree, director of equity research for Las Vegas-based CBRE Group Inc., and Kim Noland, of Gimme Credit LLC of Westchester County, New York, both conclude in reports issued Tuesday that the locals market will stay strong thanks to companies that are reinvesting in their properties and because of tax cuts offered in President Donald Trump’s One Big Beautiful Bill.

“Although comparisons get more difficult for the locals market in 2026, there are still several catalysts on the horizon that should fuel moderate growth, including tax cuts under the One Big Beautiful Bill Act and recent capital reinvestment from major operators such as Boyd Gaming Corp. and Red Rock Resorts,” DeCree wrote in his equity research report.

“Across our coverage universe, the Las Vegas Locals market should benefit the most from the OBBB Act given the concentration of tipped employees and number of retirees living in Las Vegas, coupled with the city’s propensity to gamble.”

Red Rock expansion

Noland pointed to Red Rock’s massive expansion program at its Durango property as an economic driver.

“The company owns seven major locations and 12 smaller properties, and its profit growth recently has been driven by its popular new casino Durango as well as upgrades at Green Valley Ranch and Sunset Station expected to be completed this year,” Noland wrote. “Red Rock’s largest and most significant peer, Boyd Gaming, owns casinos nationwide, and while its profit margins may be slightly superior to Red Rock, its overall performance in the locals market has lagged recently due to the success of Durango. Red Rock is outselling the competition in part because Durango has grown the market since it opened and also because Red Rock is taking share with its major expansions.”

Comparing the Strip to the locals market, DeCree said the locals have tended to have better recoveries during economic downturns.

“Since 1984, annual gross gaming revenue on the Strip declined 11 times compared with six times for the locals market,” DeCree wrote.

“Of those six years, three were related to the global financial crisis (2008-10), decreasing 21 percent from peak-to-trough vs. 19 percent on the Strip. One was due to the COVID-19 pandemic (2020), down 23 percent vs. 43 percent on the Strip. The other two years (2013-14), locals gross gaming revenue declined less than 0.3 percent compared with a 2 percent decline on the Strip. In other recessionary periods like the dot-com bubble, locals gross gaming revenue increased 8 percent despite a 3 percent decline on the Strip. Moreover, the locals market has decoupled significantly from the Strip with a more diversified economy and a more favorable supply-demand balance with the number of gaming positions per 100,000 residents down over 47 percent since 2007.”

Noland believes Trump’s economic plan will work favorably for locals customers.

“Administration tax policies on tips, overtime and a senior citizen tax deduction will continue to assist the company’s core customers in the locals market,” he wrote.

Golden downgraded

Another company with a strong locals presence, Las Vegas-based Golden Entertainment Inc., was downgraded by DeCree as the company transitions to being privately held.

“We are lowering our Golden price target to $28 (a share, from $32) based on the current exchange ratio for the stock portion of the transaction with Vici Properties Inc.,” DeCree wrote. “While The Strat will likely remain challenged amid softer visitation and leisure demand on the Strip, we expect Golden’s locals business (Arizona Charlies) to benefit similarly to Boyd and Red Rock Resorts. Although GDEN will be delisted after its transaction, we believe the company’s balance sheet will position it for growth. We wouldn’t be surprised if Golden became more front-footed with its growth strategy as a private company. Without the concern of a public valuation, Golden could be more nimble or aggressive in pursuing mergers and acquisitions and-or larger developments as a private company.”

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on X.