Big Week for Vegas But Well Off the Strip

In light of recent buzz about the plight of Las Vegas, it seems fitting that DraftKings is set to report earnings this week on Wednesday evening.

After all, on top of rising room rates/resort fees in Vegas as well as a multitude of other factors, the rise of legalized online gambling across the country is surely one of several reasons for Las Vegas suffering year-over-year revenue decline every single month of this year so far. Without question, being able to place a sports bet or even bet table games from the comfort of your own smart phone seems like a more economical choice, let alone one of convenience, than arranging a big trip out to Las Vegas. 

Thus, how DKNG measures up in this coming earnings report seems even more significant since the bar for growth is rather high. You are talking about triple digit earnings per share growth on a year over year basis. 

The reason why DKNG is so key is due to the Las Vegas loyalists arguing that the decline is due to a normal consumer pullback. If that is true then it should also be reflected in DKNG earnings. Inversely, if DKNG continues to grow at a rapid clip then it can be seen as damning evidence against Vegas and its entire business model. 

Ultimately, with the younger generations less inclined to grind at the tables all day while drinking, the Vegas casino operators will need to stop chasing back pandemic losses (ironic, indeed) and roll out of the red carpet for virtually all bonafide gamblers.

As an example, WYNN, on the second quarterly chart, below, is trading at the same prices levels now as it did eighteen years ago. Mind you, WYNN has some of the best kept, gorgeous properties in the world appealing to the very high end. 

Meanwhile, DKNG, on the first monthly chart, is coiled up into earnings, seemingly hell-bent on burying the Las Vegas Strip in a big hole out in the middle of the desert.