Stability persists in local and regional casinos, according to Deutsche Bank analyst's assessment.
Deutsche Bank analyst Steven Pizzella has taken over the gaming coverage following the departure of Carlo Santarelli, and he presents a cautiously optimistic but selective bullish outlook on the gaming industry. In his analysis, he highlights both opportunities and challenges across the sector.
General Industry Outlook
Pizzella sees sports betting data providers (e.g., Genius Sports, Sportradar) as "long-term secular winners" with strong growth potential due to increased take rates, stable long-term contracts, and solid balance sheets. These firms are less exposed to consumer wagering volatility, making them attractive investments.
However, consumer-facing B2C gaming stocks (e.g., DraftKings) will likely experience short to medium-term volatility due to difficult expansion of online casinos, possible tax increases, and unpredictable online betting handle growth. He advises holding DraftKings but notes their adjusted EBITDA forecasts have been lowered due to tax headwinds and industry upsides in Q2 2025.
Commercial Casinos and Gaming Operators
Pizzella is bullish on MGM Resorts with a $50 price target (buy rating), reflecting confidence in casino operators with solid brand equity and diversified business models.
Regarding Wynn Resorts, Pizzella raised price targets amid signs of a strong recovery in Macau’s gaming market, marked by growing Gross Gaming Revenue (GGR), ongoing property upgrades, and strategic diversification into entertainment. Wynn benefits from Macau’s rebound and global tourism trends.
While there is no direct mention of Caesars Entertainment and Station Casinos in the search results, Pizzella’s positive outlook on major casino operators like MGM and Wynn suggests an overall positive stance on established commercial casinos.
iGaming and Sports Betting
For online casino and sports betting, Pizzella notes a mixed but generally positive outlook:
- He raised 2026 EBITDA estimates for DraftKings despite near-term tax-related earnings pressures, signaling long-term confidence tempered by volatility.
- Sports betting data companies Genius and Sportradar are highlighted as attractive investments due to their scalable data products and strong contracts.
Summary Table
| Segment | Outlook Summary | Notable Companies & Ratings | |-----------------------------|-------------------------------------------------|----------------------------------------------------| | Sports Betting Data Providers| Long-term winners, less volatile, secular growth | Genius Sports ($13, Buy), Sportradar ($34, Buy) | | Consumer-facing Sports Betting| Volatile, shorter-term challenges, hold DraftKings| DraftKings ($37, Hold), EBITDA forecasts raised with caution | | Commercial Casinos | Positive on operators with Macau/Las Vegas exposure | MGM Resorts ($50, Buy), Wynn Resorts (raised targets) | | Macau Gaming Market | Strong recovery with substantial GGR growth | Wynn Macau leading resurgence |
In conclusion, Steven Pizzella at Deutsche Bank identifies sports betting data providers as the best long-term plays, favors major casino operators benefiting from Macau recovery and entertainment expansion, and recommends a cautious hold on consumer sports betting companies like DraftKings due to near-term volatility and tax impacts.
The sports betting data providers, such as Genius Sports and Sportradar, are seen as long-term, secular winners with strong growth potential by Deutsche Bank analyst Steven Pizzella, due to their scalable data products and solid balance sheets.
In contrast, consumer-facing B2C gaming stocks, including DraftKings, will likely experience short to medium-term volatility according to Pizzella, as a result of difficult expansion of online casinos, possible tax increases, and unpredictable online betting handle growth.
