Leaders from several U.S. major gaming operators said during recent earnings calls they weren't seeing broader economic fears pan out, remaining optimistic their financial bottom lines would remain steady or exceed the year prior.
Key takeways
- Gaming executives remain optimistic despite broader economic fears and recent global tariffs, reporting stable Q1 2025 visitation and revenues, and expect continued performance.
- Online gaming is emerging as a growth engine, with companies like Caesars, MGM, and Rush Street Interactive reporting strong sportsbook revenue and profitability gains, helping buffer potential declines in physical operations.
- Online casino legalization is gaining traction as executives argue it could help states facing budget shortfalls, offering higher profit margins and tax potential despite political resistance and competition with brick-and-mortar casinos.
Executives from Nevada-based Caesars, MGM, and Boyd Gaming dismissed concerns in recent days that a feared economic downturn was hurting them financially. The companies saw roughly similar hotel room attendance in Q1 2025 as they did the year prior. Visitor numbers were stable into April, and projected to remain at estimated levels through the rest of the quarter.
President Donald Trump announced a sweeping set of global tariffs April 2, setting off concerns of a worldwide economic downturn and leading to massive stock market drops. Many of the tariffs were adjusted or otherwise suspended since the announcement.
Caesars CEO Tom Reeg said during his company’s earning call Tuesday these worries were being played out more so in financial media than in the average customer’s wallets.
International spending at Las Vegas casinos remained steady, corporate figures show, even as visits to the city’s Harry Reid International Airport dipped. International visits stayed fairly stable, executives said, with declines from Canada a notable exception.
Gaming execs also dismissed fears tariffs would increase capital costs. The trio of Nevada-based operators, which combined operate several dozen other properties across much of the rest of the U.S., said most of the materials for future brick-and-mortar projects in the coming months were already accounted for.
Digital gaming as a backstop
Executives reiterated this week that online gaming also remains a growing asset that could offset any potential brick-and-mortar cost increases or visitor declines.
Major U.S. online sports betting operators started showing positive revenues and adjusted EBITDA in recent quarters after billions of dollars in combined losses. Companies drastically curtailed spending after investing hundreds of millions in promotions, free bets and other player acquisition tools in the years since the Supreme Court struck down the federal wagering ban in 2018.
Though online gaming still generates a fraction of the revenue as hotel stays and in-person gaming win for major operators, corporate stakeholders see it as an increasingly significant growth vertical for the future.
MGM echoed Caesars exec's sentiments yesterday that their companies don't see a significant threat from increased tariffs, per today's $MGM earnings call; MGM officials said they've already purchased all new slot machines for the year, don't foresee major capital expenditures
— Ryan Butler (@ButlerBets) April 30, 2025
MGM and Caesars saw net revenue from their respective online sportsbooks grow 68% and 8.7%, respectively, in 2025's first quarter compared to Q1 2024. BetMGM grew its AEBITDA from a $132 million loss in Q1 2024 to $22 million during 2025's first three months. Caesars increased AEBITDA from $5 million to $43 million during that same time.
Chicago-based Rush Street Interactive, which doesn’t operate brick-and-mortar properties, also reported significant gains from its BetRivers mobile sportsbook during its first quarter earnings call.
Online casino gaming remains opportunity for further growth
Many of the same executives see online casino gaming as an even greater opportunity.
Online casino offerings such as slots and table games generate significantly higher profit margins than sportsbooks. Despite legalization efforts in more than a dozen statehouses in recent years, only four states – New Jersey, Pennsylvania, Michigan, and West Virginia – legalized competitive iGaming markets.
A potential economic downturn could help speed up that process, casino execs said.
“The increasingly challenging economic realities faced by states, combined with the proven financial and consumer protection benefits of our regulation and the fact that unregulated online casinos in the form of online casino sweep stakes and offshore casino sites already exist in the states, creates a compelling case for the legalization, regulation, and taxation of online casinos,” Rush Street CEO Richard Schwartz said during his earnings call Wednesday.
Most states are facing tightening budget situations as federal funds from the COVID-19 pandemic largely stopped and governments project dwindling financial aid from Washington under the Trump Administration. A significant economic decline could curtail tax revenues and lead to even more dire budget situations.
Online casino gaming is less politically palatable, partially over fears it takes away tax dollars from in-person gaming.
Some brick-and-mortar casino operators including Live! Casinos parent Cordish Companies have opposed legalizing iGaming. Even iGaming supporters acknowledge that while iGaming generates more tax dollars than sports betting, it represents a minuscule potential revenue source for multibillion-dollar annual state budgets.
But even that potential remains a catalyst for new states to legalize iGaming in the coming years, Reeg said during his recent earnings call, echoing the sentiment of rival MGM as well as digital-focused companies including Rush Street, FanDuel and DraftKings. In any economic scenario, gaming executives have taken the stance so far this year that online gaming of all varieties remains a critical growth vertical going forward.
