{"id":229896,"date":"2022-09-01T15:26:53","date_gmt":"2022-09-01T20:26:53","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=229896"},"modified":"2022-09-01T20:10:33","modified_gmt":"2022-09-02T01:10:33","slug":"regional-casinos-getting-lift-from-declining-gas-prices","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/regional-casinos-getting-lift-from-declining-gas-prices\/","title":{"rendered":"Regional Casinos Get July Boost from Lower Gas Prices"},"content":{"rendered":"

The national average gas price is $3.829 per gallon, according to AAA, well above levels seen in late 2020, but off the highs set earlier this year. Those declines provided some support to regional casinos\u2019 July gross gaming revenue (GGR) figures.<\/p>\n

\"regional
Century Casinos co-CEO Peter Hoetzinger, left, and other executives ring the bell at the Nasdaq market site in 2020. An analyst says lower gas prices are helpful to regional casino operators. (Image: Colorado Springs Gazette<\/em>)<\/figcaption><\/figure>\n

GGR at regional casinos declined 1% last month compared with a 2% drop in June. In a note to clients today, Roth Capital analyst Edward Engel said that modest improvement is likely attributable to a pullback in gas prices. The core customer base for many regional gaming venues usually make day trips to those properties and usually drives to get there, making them sensitive to gas costs<\/a>.<\/p>\n

Even amid current macro pressures, we still model stable GGR through YE2022. While we acknowledge GGR is bound to eventually decline in a U.S. recession, regional demand trends seem to be lagging the broader economy,\u201d<\/strong> wrote Engel.<\/p><\/blockquote>\n

The analyst added that comparables should be easier for operators to manage by the end of 2022. That’s because no major hurricanes were affecting South casinos this year, and the COVID-19 Omicron variant outbreak of December 2021 is unlikely to repeat this year.<\/p>\n

Regional Casinos Could Be Durable Earlier in Recession<\/h2>\n

Due in large part to political spin, there\u2019s currently an unprecedented debate regarding whether or not the US economy is in a recession. The textbook definition of a recession is two consecutive quarters of declining GDP data — a condition the US meets.<\/p>\n

\n

On the other hand, market observers rightfully argue that employment data don\u2019t jibe with traditional economic contraction scenarios. Still, the share prices of casino operators<\/a>, including those with extensive regional portfolios, are pricing in a recession.<\/p>\n<\/div>\n

Engel points out that regional casinos could be durable in the early stages of a recession and may not be vulnerable until a material increase in unemployment data arrives.<\/p>\n

\u201cRather, we don’t expect GGR to soften until unemployment picks up, which is typically a late-cycle event. As economists generally forecast a recession starting 2H23, we still see at least 3-4 quarter of GGR resiliency,\u201d <\/strong>said the analyst.<\/p>\n

Regional Casino Equities Inexpensive<\/h2>\n

With market participants fretting about the specter of recession, shares of regional casino operators are inexpensive across the board<\/a>.<\/p>\n

\u201cGiven the uncertainties towards the timing\/magnitude of a recession, the YTD slide in stock prices has been multiple driven, as investors price in EBITDA declines in 2023-24. As such, EV\/EBITDA multiples remain near trough lows. In a scenario where economic concerns subside, we’d expect investors to quickly flock towards gaming stocks, given headline valuations trade near cyclical lows,\u201d concludes Engel.<\/p>\n

Among the regional operators the analyst rates \u201cbuy\u201d are Century Casinos (NASDAQ: CNTY), Full House Resorts (NASDAQ:FLL) and Golden Entertainment (NASDAQ: GDEN). He has a \u201cneutral\u201d grade on Penn Entertainment (NASDAQ:PENN), the largest regional casino company.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The national average gas price is $3.829 per gallon, according to AAA, well above levels seen in late 2020, but off the highs set earlier this year. Those declines provided some support to regional casinos\u2019 July gross gaming revenue (GGR) figures. GGR at regional casinos declined 1% last month compared with a 2% drop in […]<\/p>\n","protected":false},"author":46,"featured_media":229903,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[62,10],"tags":[81897,81903],"acf":[],"yoast_head":"\nRegional Casinos Getting Lift From Declining Gas Prices<\/title>\n<meta name=\"description\" content=\"Regional casinos benefit from lower gas prices, could be steady in recession, says analyst.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/regional-casinos-getting-lift-from-declining-gas-prices\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Regional Casinos Getting Lift From Declining Gas Prices\" \/>\n<meta property=\"og:description\" content=\"Regional casinos benefit from lower gas prices, could be steady in recession, says analyst.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/regional-casinos-getting-lift-from-declining-gas-prices\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-09-01T20:26:53+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-09-02T01:10:33+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/09\/cc.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/regional-casinos-getting-lift-from-declining-gas-prices\/\",\"url\":\"https:\/\/www.casino.org\/news\/regional-casinos-getting-lift-from-declining-gas-prices\/\",\"name\":\"Regional Casinos Getting Lift From Declining Gas Prices\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/regional-casinos-getting-lift-from-declining-gas-prices\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/regional-casinos-getting-lift-from-declining-gas-prices\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/09\/cc.jpg\",\"datePublished\":\"2022-09-01T20:26:53+00:00\",\"dateModified\":\"2022-09-02T01:10:33+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Regional casinos benefit from lower gas prices, could be steady in recession, says analyst.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/regional-casinos-getting-lift-from-declining-gas-prices\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/regional-casinos-getting-lift-from-declining-gas-prices\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/regional-casinos-getting-lift-from-declining-gas-prices\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/09\/cc.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/09\/cc.jpg\",\"width\":1200,\"height\":800,\"caption\":\"Century Casinos co-CEO Peter Hoetzinger, left, and other executives ring the bell at the Nasdaq market site in 2020. 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