Vegas tourism hit, online rivals put Caesars and MGM in play

LAS VEGAS – Whammied by the twin trends of declining visitors to Las Vegas and the growth of prediction market betting, two of the most storied names in the casino business now find themselves the subject of takeovers.

Caesars Entertainment, the largest owner of casinos across the US, has agreed to be acquired by Golden Nugget owner Tilman Fertitta. Within days, MGM Resorts International, the largest owner of properties on the Las Vegas Strip, received a bid from Barry Diller’s People.

Both deals value the respective companies at about US$18 billion (S$23 billion) each, including debt.  

A convergence of factors have put the two casino giants in play.

While both companies have built up top positions in the online sports and casino space, a new generation of prediction-market rivals such as Kalshi and Polymarket have put pressure on the traditional online operators and their stock prices.

Court and legislative challenges to the new rivals are playing out across the country. But US President Donald Trump has said he continues to back the federal Commodity Futures Trading Commission as the sole regulator of prediction markets, hampering the ability of states to tax and control the fast-growing business. 

“The US is behind the 8 ball not being able to keep pace with changes that are taking place,” said Michael Pollock, a senior policy adviser at Spectrum Gaming Group, in an interview. “It’s ground breaking and frankly a little scary.”

Other factors have contributed to the poor performance of casino stocks in recent years.

Visitors to Las Vegas, America’s gambling capital, began declining in January 2025. A fall in international tourism, particularly from Canada, has been attributed to Trump’s trade and immigration policies. Las Vegas casino operators have also been accused of raising their prices too much, turning off budget minded customers.

Nationwide, revenue from land-based casinos rose 2.3 per cent to US$50.9 billion in 2025, according the American Gaming Association trade group. Revenue from sportsbooks and online casino games rose 23 per cent and 28 per cent respectively. 

To combat the sluggish results at physical casinos, operators have been offering promotions, such as all-inclusive stays that provide meals and accommodations for one price.

There are signs of improvement. While visitors to Las Vegas declined 1.8 per cent to 3.28 million in April, gambling revenue on the Strip rose 4.7 per cent to US$1.1 billion, according to state and local officials.

After an initial bump coming out of the pandemic, shares of both MGM and Caesars declined in value over the past five years. Both companies initiated stock buybacks and management complained publicly that their businesses were undervalued. The shares of both are up since February, when Fertitta’s pursuit of Caesars first became public. 

Diller, an 84-year-old media and technology mogul, first began investing in MGM six years ago, lured by the prospects for online gambling growth as well as the company’s hard-to-replicate properties, such as the Bellagio and MGM Grand in Las Vegas. 

“We continue to believe the market materially undervalues the power and durability of MGM’s assets,” Diller, whose company is the largest shareholder of MGM, said in a statement on June 1. 

The takeover interest could act as a catalyst for more acquisitions in the casino industry, according to Jefferies Financial Group analyst David Katz. He cited Churchill Downs, Monarch Casino and Resort, Boyd Gaming and Penn Entertainment as possible candidates. 

Meanwhile, Wall Street is expecting the takeover price for MGM to go higher. The stock is already trading about 6 per cent above Diller’s US$48.30 a share offer.

While it is not clear who might step in to try and top the current proposal, analysts at Stifel Financial said MGM’s high-end assets in Macau and Las Vegas and potential expansion in Japan could make it worth as much as US$55 a share. BLOOMBERG