Harsh winter conditions impacted visitation at regional casinos in the US, leading to a decline of 5.4% in January, as reported by analysts. They anticipate revenue drops of up to 5.7% in the regions most affected, despite predictions suggesting a rise in overall winnings.

Daniel Politzer, an analyst at J.P. Morgan, highlighted this decrease in visitation in a note to investors on February 4, linking the underperformance in January to severe cold and snow across various areas. Nonetheless, he predicted a 2% increase in casino winnings.

Federal emergencies and visitation challenges

Notably, Jefferies Equity Research’s David Katz pointed out that 12 states received federal emergency declarations in January, out of which seven host casino operations: Indiana, Kentucky, Louisiana, Maryland, Mississippi, Virginia, and West Virginia.

Katz estimated that with about 40% of gambling taking place on weekends, if visitation remained at 65% of typical levels, gaming revenue would likely experience a 3.1% drop. In regions facing the harshest weather, where casino attendance may have dropped to 35% of normal levels, revenue losses could reach as high as 5.7%.

In a contrasting example, Katz mentioned that New York, which was not subjected to an emergency declaration, saw a 1% rise in its video gaming venues during the same timeframe.

Revenue projections and calendar impacts

According to Politzer, January’s results were better than originally forecasted, given the extreme weather conditions. He noted that a 2% growth would exceed initial expectations. He also pointed out that January 2026 included an additional weekend day compared to the previous year, which followed a “somewhat difficult” January 2025, leading to a year-over-year comparison that, when adjusted for timing, appeared flat.

Katz, on the other hand, projected a decline in regional gaming revenue between 3% to 5%, attributing this to continuous competition in the market among brick-and-mortar operators. “Increased competition poses a substantial risk for land-based operators, and the recent adverse weather could lead to downward adjustments for Q1 2026 estimates,” Katz remarked.

iGaming regulations intensify challenges

Katz also referenced legislative developments concerning iGaming, mentioning recent legislation in Maine and forthcoming bills in Virginia, Indiana, and New York. “Given that implementation for Virginia and Maine is several months away at the earliest, we believe the impact on land-based operators in 2026 will be minimal,” Katz observed. “However, once operational, the implications will undoubtedly be adverse for brick-and-mortar facilities.”

Excluding states that embraced iGaming during the COVID phase, Katz indicated that land-based casinos typically face a 3.5% revenue drop following the introduction of online gambling. “Further legalization seems inevitable, suggesting operators should develop a clear iGaming strategy to ensure long-term growth potential,” he articulated.

While near-term pressures persist, Katz expressed that some operators are still considered top picks. He mentioned Boyd Gaming, Churchill Downs, and Station Casinos, highlighting effective management and near-term progress.

Gaming stocks experienced approximately a 7% drop, according to Katz, but he believes select companies remain worth investing in. “We continue to identify investible narratives for firms that present a clear growth trajectory,” he emphasized. He noted that Boyd is working on two ongoing projects and maintains a relatively less leveraged balance sheet that could be used for new ventures or enhancing existing assets.