Summary:
- January casino visits fell as snow and extreme cold kept people home, especially in hard-hit US states.
- Despite lower foot traffic, casino winnings are expected to come in slightly higher than last year.
- Analysts still see long-term risks in online casino expansion, but some operators stand out as well-positioned.
Regional casinos got off to a slow start in January, and the weather is largely to blame. In a February 4 investor note, J.P. Morgan analyst Daniel Politzer reported that visits to regional casinos fell 5.4% year over year.
The drop, apparently, didn’t hurt casino winnings, which are expected to come in about 2% higher. According to Politzer, the result is better than expected, given the rough month.
Foot Traffic Affected by Cold and Snowfall
The first month of the new year was marked by severe cold and heavy snowfall across much of the country, both taking a serious toll on foot traffic.
Still, Politzer noted that the month included an extra weekend day and followed what he called a “fairly challenging” January in 2025, making the year-over-year comparison closer to flat when adjusted.
Jefferies analyst David Katz reached similar conclusions but took a slightly more cautious view. In a separate report, he said weather was a major drag and warned that
Heightened competition remains the overarching risk for land-based operators and the latest snow/ice could cause downward revisions to 1Q26 Street estimates.
Katz also flagged the steady march of online casino legalization as another pressure point for traditional operators.
While Politzer expects modest growth in winnings, Katz projects that regional casino revenue could decline by 3% to 5%. Despite that, he still sees opportunity in certain names, highlighting Boyd Gaming, Churchill Downs, and Station Casinos, and pointing to their solid management teams and near-term developments expected to support performance.
Online Gambling to Affect
Katz also acknowledged the long-term impact of online gambling, primarily focusing on states like Virginia, where legalization seems to be close, Maine, which recently approved iGaming, and active bills in Indiana and New York.
While he said rollout timelines mean limited impact in 2026, he was blunt about the longer-term effect.
“Still, once launched, the outcome is definitively negative for brick-and-mortar properties” he wrote. Based on past examples outside the COVID period, Katz said physical casinos typically see about a 3.5% drop when online gaming launches.
Finally, Katz struck a cautiously optimistic tone. With gaming stocks down about 7%, he said,
We still believe there are investible stories for firms that offer a clear growth pathway
He cited Boyd’s development pipeline, Churchill Downs’ favorable Derby comparisons and new electronic table games, and Station Casinos’ focus on Las Vegas locals, where weather is less of a factor.
About the Author
