The Las Vegas locals gaming market shows a 6% increase in gross gaming revenue (GGR) year-to-date, but this growth may be misleading according to Deutsche Bank analyst Carlo Santarelli. When excluding Red Rock's new Durango Casino & Resort, the local market actually shows a 3% decline in 2024.

The Durango property, which opened in December 2023, has reportedly cannibalized business from other Red Rock venues, particularly the Red Rock Resort in Summerlin. While Red Rock executives maintain that local population growth will offset this cannibalization long-term, concerns persist about market dynamics.

Boyd Gaming, despite its geographic diversification, faces skepticism from analysts. Santarelli projects a 1.5% revenue decline and 3.3% cash flow reduction for Boyd in 2025, challenging the widespread expectation of positive revenue growth.

Red Rock Resorts, currently favored by most analysts with "buy" or "strong buy" ratings, may also face challenges. Santarelli suggests that achieving necessary cash flow growth to offset planned expenditures, including Durango expansion, could prove difficult given current market conditions.

Key concerns for both operators include:

• Weakening regional gaming markets
• Cannibalization effects from new properties
• Challenges in maintaining same-store growth
• Potentially optimistic Wall Street forecasts

Despite analyst concerns, Red Rock executives remain confident that continued Las Vegas Valley population growth will support their expansion strategy, particularly as planned new casino locations are positioned away from existing properties.

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