Wall Street Bets: Prediction markets, Las Vegas Strip, Light & Wonder, Caesars
Summary
This roundup captures recent analyst notes across the gambling sector. JP Morgan and Jefferies weigh in on the growing debate over prediction markets and the legal/regulatory noise around Kalshi. Truist reports a soft Las Vegas summer with signs of modest improvement heading into November. Fitch assigns Light & Wonder subsidiary notes a BB rating while highlighting a conservative leverage profile. Texas Capital is upbeat on Caesars, saying Las Vegas and digital segments look better than sentiment implies.
Key Points
- JP Morgan: DraftKings and Flutter (FanDuel) face rising legal and stakeholder opposition over prediction markets despite a larger potential addressable market.
- Jefferies: Early court indicators in Kalshi vs New Jersey tilt favourably for Kalshi operating nationwide, but any legal resolution could ultimately help incumbent operators like DraftKings and Flutter.
- Truist (Barry Jonas): Las Vegas had a soft summer; early November reads suggest modest improvement and a potential Q4 inflection, though week-to-week data remains limited.
- Fitch: Light & Wonder International’s proposed eight-year senior unsecured notes rated BB with an RR4 Recovery Rating; company benefits from top-three supplier status and conservative pro forma leverage (~3.6x).
- Texas Capital (David Bain): Caesars’ LV, digital and regional segments are trending to grow year-on-year into 4Q25 and CY26; digital EBITDA could surprise positively, supporting valuation upside.
Why should I read this?
Short version: if you care about gambling stocks, Vegas footfall or who wins the next regulatory tussle, this saves you time. Analysts flag legal risk around prediction markets, early signs of a Vegas rebound, a steady credit view on a big supplier, and a possibly underrated Caesars — all of which matter to investors and operators.
Context and relevance
The pieces tie into three ongoing industry threads: regulatory scrutiny and how it shapes new product launches (prediction markets); consumer demand patterns on the Las Vegas Strip after a softer summer; and capital/credit dynamics for suppliers and operators that influence mergers, refinancing and investment decisions. Together they provide a snapshot of near-term risks and potential catalysts for shares in operators (DraftKings, Flutter, Caesars) and suppliers (Light & Wonder).