First-quarter earnings season for the gaming industry kicks off this week with a backdrop that is decidedly more complicated than a year ago. According to Bank of America, gaming stocks are down 6% for the year through April 2026, with U.S. operators roughly flat at up 1%, Macau operators down 14%, and digital and online gaming stocks down 36%. The sector that has come under the most pressure is also the most relevant to sports bettors: digital gaming, which is dealing with a combination of slowing handle growth and the very real narrative that prediction markets are cannibalizing betting activity.
Earnings reports will start arriving in the final week of April, with Caesars and Rush Street reporting Tuesday, April 29, followed by MGM Resorts and Red Rock Resorts on Wednesday, April 30. Wynn Resorts follows on May 7.
The Las Vegas Strip: How Bad Was Q1?
The Strip entered 2026 on soft footing. Las Vegas Convention and Visitors Authority data shows approximately 3.27 million visitors came to Las Vegas in January 2026, a 2.2% decline from January 2025. Hotel occupancy dropped roughly 2.4 percentage points to 79.5%, though average daily rates rose 6.7% to $200.15. Strip gaming win dropped 11% year-over-year in January.
J.P. Morgan analyst Daniel Politzer estimates first-quarter Strip EBITDAR at $420 million for Caesars and $740 million for MGM, both representing declines of roughly 3% year-over-year. Revenue per room has been tracking up about 5% versus a decline of 8% in the fourth quarter, which is encouraging, and visitation has been roughly flat versus Q4’s 6% decline. Politzer describes this as a “path of least resistance” where Strip estimates may move higher, though soft leisure demand and higher airfares remain headwinds.
Caesars’ commentary will be particularly watched. Investors want to know whether leisure demand has bottomed, what group bookings look like for Q2 and Q3, and what the company has to say about ongoing merger and acquisition speculation. Bank of America has removed its investment opinion on Caesars stock altogether, noting that the discussion around the company has become more about M&A than about fundamentals. J.P. Morgan set a $35 price target for Caesars, down $1 from prior.
Digital Gaming: The Prediction Market Question
The most consequential theme for sports bettors is what operators say about digital. First-quarter industry sports betting handle is tracking down 2% year-over-year, or down 4% excluding Missouri. Bank of America analyst Shaun Kelley said prediction markets and slowing digital gaming trends “continue to dominate our conversations.”
J.P. Morgan’s estimates for DraftKings come in at $151 million EBITDA against a consensus estimate of $174 million. Flutter (FanDuel’s parent company) is estimated at $618 million versus a $630 million consensus. The underperformance versus consensus is driven by the handle softness and the concern that operators cannot credibly argue the industry is still growing when the data shows prediction markets may be pulling activity away.
That said, online sports betting hold is tracking at 9.9% versus 8.9% in Q1 2025, which should provide some revenue offset. And iGaming revenue is tracking up 19% year-over-year, a bright spot that operators will lean on. BetMGM, which reports as part of MGM’s earnings, will face questions about its market share trajectory and the continued impact of the promotional environment that has defined the competitive landscape.
What to Watch For
Beyond the raw numbers, there are several specific questions that will define how the market reacts to this earnings cycle. First, how explicitly will operators quantify prediction market impact? The handle data suggests real cannibalization, but operators have been reluctant to put a firm number on it. Second, what does the forward guidance look like for Q2 and Q3? The Strip has easier comps in the second half of the year and a strong convention and events calendar. If operators can convincingly argue the worst is behind them, stocks could respond positively even on soft Q1 results.
Third, will Caesars provide any clarity on the M&A speculation? The company’s discussions with potential partners have been the dominant driver of its stock movement, and any commentary on that front will overshadow fundamentals entirely. Finally, watch for what operators say about customer acquisition costs in digital. If prediction market competition is driving up the cost to acquire and retain sports bettors, that is a structural problem that goes beyond one quarter.
Gaming sector earnings this cycle are less about whether operators beat or miss on specific line items and more about whether they can shift the narrative. The question investors are asking is whether the current pressure on digital gaming is cyclical or structural. Operators will have one of their best opportunities of the year to make that case when they take the earnings call podium over the next two weeks.
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