Vegas Loses, but Sports Betting Still Wins

Not the headline you normally expect from the city of glitz and glamour, the renowned gambling mecca continues to experience a significant visitation downturn in 2025.  While this epicenter of American gambling suffers from multiple factors creating its current challenging environment, we note the sports betting industry continues its remarkable expansion apace.  Part of the paradox appears to be a fundamental shift in how consumers engage in entertainment and gaming.  We look for this transformation to continue.

Expressing cautious optimism, many analysts projected 2025 would be the year Las Vegas returned to pre-pandemic levels of more than 42 million visitors.  After the pandemic-induced dramatic decline in 2020, numbers recovered steadily with 2024 totaling 41.7 million tourists, hinting at a new high mark in 2025.  Ah, but visitor numbers declined on a year-over-year basis in each of 2025’s first six months.  Tariff anxiety may have contributed to the 11.9% year-over-year fall in February 2025 attendance, as well as weakness in April and May following “Liberation Day” tariffs on April 2^nd. But despite the equity market’s recovery and US economic resilience, we’re seeing little bounce back with Vegas’ June gambler numbers still off 11.3% from 2024.  Business convention attendance remains a relative bright spot, growing 1.45% in the first half of the year, but total visitor volume notably dropped, falling 1.5 million over the six months ending June.  You can blame multiple headwinds, but a more cautious and wary consumer should probably be near the top of the list.  Increasingly concerned about high prices, more expensive hotel rooms, ever-growing resort and parking fees, plus more costly restaurant tabs no doubt influenced many to choose an alternative vacation destination.  Particularly true of international travelers, especially Canada and Mexico, the geopolitical trade-engendered tension resulted in less interest in a Vegas casino trip despite the weakening US dollar.

Before you pronounce the death of Las Vegas, however, we note that although the number of people trekking to Vegas dropped, gaming revenue registered a small increase in the first half of 2025 over 2024.  Admittedly, one month does not make a trend but amazingly, despite June’s double-digit foot traffic decline, gaming revenue increased 3.5%.  While this can be influenced by the casinos’ hold (basically the house win percentage), we believe a change in the American gambling landscape is increasingly responsible.  Specifically, online bets are taking up a larger piece of the pie.  To understand the numbers, it’s important to highlight Nevada does not currently allow online casino gaming known as iGaming.  In other words, it’s not legal to play games like slots, blackjack, and roulette online in Nevada.  Online sports betting, however, has been legal in Nevada for several years.  Thus, while the bricks-and-mortar venues struggle to attract players, the online sports betting operators appear to be enjoying big payoffs.  These digital platforms have transformed consumer behavior.  Gamblers, once enticed by glittering casinos, now appreciate the convenience, accessibility, and ease of play offered by advanced mobile apps.  These apps also pull in a new type of gambler, typically younger, less interested in traveling to a casino city, appreciating the home gambling capability.  Interestingly, in the online sports betting realm, Nevada lagged other states due to its unique regulatory requirement of in-person registration.  New Jersey and New York, for instance, created a streamlined online registration process and still enjoy a bigger online sports betting “handle” (total amount wagered) compared to Nevada.  You have to first register in person at a Las Vegas or other Nevada casino to start online sports betting.  This slowed the state’s initial uptake, but Nevada appears to be catching up with mobile sports books, having increased 78% year-over-year in June, and online sports books now account for over 60% of the total sports betting handle.  (It’s over 94% in New York).  Notably, Nevada’s June 2025 mobile sports betting revenue exceeded all online sports betting revenue in June 2024.  This demonstrates that a change in venue does little to diminish America’s appetite for wagering on sports.  The new sports gambling epicenter appears to be moving off the strip and onto the digital screen.  Next time you look at your computer, realize you’re seeing the new face of American gambling.

To participate in the online sports betting theme, we’ve recently added Flutter Entertainment, the owner of FanDuel Group to the International and Global Growth portfolios.  Although Flutter does not offer FanDuel as a standalone sportsbook app in Nevada (it partners with Boyd Gaming), the branded FanDuel offering experienced rapid growth in states like New Jersey, New York, and Arizona, currently positioned with leading market share in 15 of 18 states.  We believe the company’s multi-decade experience in other markets, including the UK, Ireland, and Australia, gives the company an advantage as it grows in newer markets like the US and Italy.  Offering products in over 100 countries, Flutter enjoys hard-to-duplicate, unique technology, and unsurpassed product expertise.  Punters (bettors) commend the company for its application interface, and Flutter typically leads the market with new product offerings, developed by leveraging its extensive customer data.  It holds a leading share in most markets while many smaller peers have already closed down operations due to Flutter’s superior offering.  While regulation always represents a threat to the industry, we believe states and countries will continue to seek new gaming-based revenue sources.  Moreover, their regulators appreciate Flutter’s extensive safeguards against problem wagering, adding additional credibility to the company’s brand.  As sports betting migrates away from the casino floor, we believe Flutter appears well positioned for the transformation.

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