Published on: December 27, 2024, 02:40h.
Last updated on: December 27, 2024, 02:40h.
With declining interest rates and a more favorable regulatory landscape, the gaming industry, including casinos, could see increased mergers and acquisitions activity in 2025.
Truist Securities’ recent Wicked Good 12th Annual GLLR Summit in Boston indicated that the Federal Reserve’s rate cuts and potential future cuts by the central bank could encourage more M&A activity in the gaming industry.
The pace of discussions has increased with the Fed’s rate cuts, and operators are optimistic about a more favorable FTC administration,” said Truist analyst Barry Jonas. “After a year of M&A in gaming tech, we believe 2025 could see an increase in gaming operator M&A. Valuation expectations and bid/ask spreads will be crucial factors.”
No specific buyers or targets were mentioned, but the potential for increased consolidation in the gaming industry was highlighted.
New FTC Leadership Can Impact Casino M&A
With Trump’s nomination of Andrew Ferguson as FTC Chair, there is anticipation of a more consolidation-friendly environment in the industry.
Under current Chairwoman Lina Khan, the FTC did not hinder significant casino mergers recently. However, under Khan’s leadership, there were legal actions against other large-scale mergers.
Changes in FTC leadership could pave the way for more significant consolidation in various industries, including gaming.
Rumors of casino industry consolidation in 2024 did not materialize, with only speculation around Boyd Gaming potentially acquiring Penn Entertainment, which did not progress.
Potential Online Gaming Spinoffs
Truist analyst Jonas also mentioned the possibility of iGaming and online sports betting spinoffs in 2025.
He noted that Caesars Entertainment could consider spinning off its digital operations to unlock shareholder value, and Penn, the parent company of ESPN Bet, might also explore a similar move to address challenges in its interactive business.
Despite potential tax increases affecting the industry, standalone iGaming could present growth opportunities for companies with a strong land-based presence.