ZACKSยท2025-09-17 15:56Industry Overview - The Zacks Gaming industry is experiencing growth due to increased gaming revenues in Macau, strong demand for sports betting, and robust U.S. commercial gaming revenues [1][3][4] - The industry includes companies that operate integrated casinos, hotels, and entertainment resorts, as well as those providing technology products and services in gaming markets [2] Key Themes - Macau's gross gaming revenues (GGR) reached MOP 22.15 billion ($2.76 billion) in August, marking a 12.2% year-over-year increase and a 0.1% gain from July [3] - U.S. commercial gaming revenues rose 9.8% year-over-year in Q2 2025, totaling $19.44 billion from traditional casino games, sports betting, and iGaming [4] - The legalization of sports betting across multiple states has significantly contributed to industry growth, with popular gaming applications including DraftKings and FanDuel [5] Economic Factors - Ongoing economic uncertainty, rising inflation, and geopolitical tensions pose challenges to the gaming industry, potentially reducing consumer discretionary spending [6] Industry Performance - The Zacks Gaming industry ranks 96, placing it in the top 39% of over 245 Zacks industries, indicating positive near-term prospects [7][8] - The industry has outperformed the S&P 500 Index, rising 37.3% over the past year compared to the S&P 500's 19.9% growth [10] Valuation Metrics - The industry has a trailing 12-month EV/EBITDA ratio of 21.45, which is higher than the S&P 500's ratio of 18.35, reflecting a premium valuation [13] Notable Companies - Boyd Gaming: Benefits from a diversified business model and operational efficiencies, with a 4.9% increase in 2025 earnings estimates to $6.89 [17][18] - Red Rock Resorts: Strong performance from Durango Casino Resort and Las Vegas operations, with a 12.7% increase in 2025 earnings estimates to $1.77 [20][22] - Melco Resorts & Entertainment: Strong momentum in Macau operations, with a 69% surge in 2025 earnings estimates to $0.49 [24][25]