Published on: January 29, 2026, 06:18h.
Updated on: January 29, 2026, 06:18h.
- Disappointing December gross gaming revenue (GGR) report
- Analyst warns about potential earnings risks for Caesars and MGM Las Vegas
- Better investment opportunities suggested in alternative casino stocks
The December gross gaming revenue (GGR) report, released on Wednesday, revealed that Las Vegas Strip casino operators achieved sales of $828 million, marking a 6% decrease compared to the previous year. This decline signals a concerning outlook for the upcoming earnings reports of Caesars Entertainment (NASDAQ: CZR) and MGM Resorts International (NYSE: MGM).
In a communication to clients, analyst Chad Beynon from Macquarie identified the weak December GGR report as a potential risk factor for the fourth-quarter earnings of Las Vegas operators, prompting the firm to classify Las Vegas into its least favorable gaming category.
“We anticipate that higher-end properties, notably Wynn Resorts (NASDAQ: WYNN), will outperform compared to MGM/CZR,” states Beynon. “Although we believe in the long-term positive outlook for Vegas, we are concerned that the softness from leisure and international visitors may continue through this year, following three years of growth after the COVID-19 pandemic.”
Caesars, which ranks as the second-largest operator on the Strip, is set to announce its fourth-quarter results on February 17, after the US markets close, while its larger competitor, MGM, is scheduled to report on February 11.
Challenges for Caesars and MGM Amid Las Vegas Weakness
Both casino stocks recently faced disappointing performances in 2025, and without a significant turnaround in Las Vegas shortly, investors might lean towards avoiding these options.
This reaction makes sense given that while the two casino giants maintain extensive portfolios across the United States, their reliance on the Las Vegas market is substantial. According to Macquarie data, MGM generates 47% of its revenue from this casino hub, while Caesars is slightly ahead at 45%. In contrast, Wynn only derives 23% of its sales from Las Vegas.
This heavy reliance has made some Wall Street analysts skeptical regarding Caesars and MGM. As the year 2026 commenced, MGM faced a downgrade by a sell-side analyst, pointing to lackluster trends in its earnings before interest, taxes, depreciation, and amortization (EBITDA) as potential challenges for the casino stock.
Investors seeking positive signals about Caesars and MGM might focus on the potential for rebounding visitor trends in Las Vegas, decreasing interest rates, and the hope for improved sentiment among middle-income consumers.
Positive Signs Amid Negative News in Las Vegas
While the aforementioned December GGR report may not suggest a favorable fourth quarter for Strip operators, it hasn’t negatively affected all of Las Vegas. There’s clear growth in the locals segment, indicating that companies like Boyd Gaming (NYSE: BYD) and Red Rock Resorts (NASDAQ: RRR) could experience another strong year.
“Based on fourth-quarter 2025 market data, we are optimistic that RRR and BYD will surpass the existing fourth-quarter consensus estimates for their respective retail segments,” Beynon adds.
He rates Boyd as “neutral” with a target price of $92 and Red Rock as “outperform” with a forecast of $70.