Date Published: January 29, 2026, 06:18h.
Last Modified: January 29, 2026, 06:18h.
- December GGR report raised concerns among investors
- Analyst warns of potential earnings risks for Caesars and MGM in Las Vegas
- Alternative casino stock options appear more promising for investors
The December gross gaming revenue (GGR) report published on Wednesday revealed that operators on the Las Vegas Strip garnered $828 million in sales, reflecting a 6% decrease year-over-year. This decline could indicate potential challenges in the forthcoming earnings reports for Caesars Entertainment (NASDAQ: CZR) and MGM Resorts International (NYSE: MGM).
In a communication to clients, analyst Chad Beynon from Macquarie highlighted that the disappointing December GGR figures present risks to the fourth-quarter earnings of Las Vegas operators, which is why the firm has placed the region in its least favorable gaming category.
“We expect premium properties to show better performance, particularly Wynn Resorts (NASDAQ: WYNN) compared to MGM and Caesars,” the analyst notes. “While we believe the long-term outlook for Las Vegas remains positive, we are concerned that a downturn in leisure and international clientele may persist this year following three years of post-COVID growth.”
Caesars, the second-largest operator on the Strip, will release its fourth-quarter results on February 17, after the US market closes, while competing giant MGM will report on February 11.
Weakness in Las Vegas Affects Caesars and MGM
Both casino giants are emerging from an underwhelming 2025, and if there isn’t a substantial turnaround in Las Vegas soon, investors may choose to steer clear of these stocks.
This trepidation is understandable, as both companies have extensive holdings across the US yet are significantly reliant on Las Vegas. Notably, MGM relies on this casino hub for approximately 47% of its revenue, slightly more than Caesars’ 45%, according to Macquarie data, which is substantially higher than Wynn’s 23% share from Las Vegas.
This reliance is one of the main reasons some analysts on Wall Street are hesitant about investing in Caesars and MGM. As 2026 begins, MGM faced a downgrade from a sell-side analyst who pointed to still slow earnings trends (EBITDAR) as potential obstacles for the stock.
Investors optimistic about Caesar’s and MGM might focus on signs of a rebound in visitor numbers in Las Vegas, falling interest rates, and the hope of improving middle-income consumer sentiment.
Positive Outlook for Certain Segments in Las Vegas
While the December GGR report may not forecast well for the earnings of Strip operators, it does not reflect the entire Las Vegas market. There’s evident strength in the local market segment, suggesting that stocks like Boyd Gaming (NYSE: BYD) and Red Rock Resorts (NASDAQ: RRR) could outperform in the year ahead.
“Our analysis of the fourth quarter 2025 market data suggests that RRR and BYD are poised to exceed current consensus expectations for their retail segments,” Beynon adds.
He maintains a “neutral” rating on Boyd with a price target of $92 and an “outperform” rating on Red Rock with a $70 price target.