Published on: March 20, 2026, 12:39h.
Updated on: March 20, 2026, 12:39h.
- Consumers across various income levels are displaying resilience
- Analyst has favorable views on Churchill Downs and Penn Entertainment
- Current national average gas price stands at $3.91 per gallon, according to AAA
The ongoing situation in Iran has pushed the national average gas price to $3.91 a gallon today, marking an increase of nearly $1 in just a month, as reported by AAA. However, this doesn’t appear to be impacting business at regional casinos.
Typically, high gas prices could negatively affect regional casinos, which primarily rely on patrons who are within a short driving distance, generally no more than two hours away. In contrast, popular destinations like Las Vegas benefit significantly from travelers flying in. However, Macquarie analyst Chad Beynon perceives positive signs for regional casinos and other driving-accessible leisure spots.
“While there are concerns regarding oil prices, particularly for lower-income customers and properties that require travel, operators have not noticed any adverse impact and do not anticipate a significant slowdown,” Beynon remarked in a report shared with clients today.
He highlights that gross gaming revenue (GGR) at regional casinos grew by 3.5% year-over-year in January, with February’s early data indicating another robust month, signifying solid trends for the first quarter.
Churchill Downs and Penn Entertainment: Regional Casino Opportunities
Macquarie recently convened its 11th Annual Consumer Bright Ideas Conference, where analysts engaged with executives from about 20 consumer companies. Regarding regional casinos, Beynon met with leaders from Churchill Downs (NASDAQ: CHDN) and Penn Entertainment (NASDAQ: PENN), returning with a positive outlook on both companies.
Last year, Churchill Downs achieved record earnings before interest, taxes, depreciation, and amortization (EBITDA) as well as revenue. With the Kentucky Derby approaching, the operator anticipates benefits from developments at its flagship racetrack. Beynon mentions that Churchill Downs is expected to see gains from the One Big Beautiful Bill Act (OBBBA) and is showing remarkable “resiliency in the face of rising gas prices.”
He assigns an “outperform” rating to the stock with a target price of $150. Meanwhile, he also rates Penn Entertainment as “outperform” with a target of $21, believing that the largest regional operator will gain from new and refreshed properties, some of which are already demonstrating early success. Discussions about prediction markets (PM) and free cash flow (FCF) were also included in the conversations regarding Penn.
“Management also shared its perspective on PM, which aligns with other retail sectors possessing Gaming licenses,” Beynon observes. “Regarding FCF, investors are focused on PENN’s capacity to initiate free cash flow generation, reduce debt, and shift the narrative around PENN. Finally, while March presents challenges (as it is typically the strongest month), OBBB is expected to aid consumers.”
Outlook for Regional Casino Real Estate
The continued strength of regional casinos benefits landlords such as Gaming and Leisure Properties (NASDAQ: GLPI) and VICI Properties (NYSE: VICI), which own significant real estate where these gaming venues operate. A robust operating environment suggests that operators can meet their lease commitments.
Additionally, Beynon touched upon developments involving VICI and the Caesars Entertainment (NASDAQ: CZR) regional master lease, which has raised investor concerns for both firms for some time.
“The majority of our discussions focused on the Caesars lease (accounting for 30% of rent roll), the Master Lease, and the terms of change of control,” Beynon concludes. “It’s worth noting that this lease has strong coverage, but regional rent has risen by 13% since 2021, while EBITDAR for that segment has declined by 28%.”
He rates VICI as “outperform” with a target price of $36.