What the house knows. Weekly.
Issue #01 | June 1, 2026
The Lead
Minnesota became the first US state to make operating prediction markets a felony when Gov. Tim Walz (D-MN) signed SF4760 on May 18. Within days, both Kalshi and the CFTC filed separate lawsuits to block it — the same week Kalshi closed a $1B Series F at a $22B valuation. The federal vs. state jurisdiction fight is now openly adversarial, and it’s the defining regulatory story in US gaming this year.
The Book
US iGaming, Sports Betting & Prediction Markets
- Online Sports Betting (Q1 2026) — Handle: $40.47B (-7.0% YoY vs. Q1 2025’s $43.52B). GGR: $3.82B (-10.5% YoY vs. Q1 2025’s $4.27B). The revenue decline reflects both softer hold rates and meaningful prediction market competition on marquee events — Kalshi alone attracted an estimated $630M in Super Bowl bets, accounting for ~80% of wagering YoY growth for the event. DraftKings is down ~25% YTD; Flutter down ~50% YTD, its longest losing streak in 23 years. Both stocks jumped briefly in April on reports Congress may move to exclude sports betting from prediction market contracts.
- iGaming (Q1 2026) — Revenue: $3.04B (+20.7% YoY vs. Q1 2025’s $2.52B). 8 states live; Maine became #8 in January after Gov. Janet Mills (D-ME) let the bill pass unsigned. iGaming is the one segment outperforming structurally.
- iGaming – New York (SB/AB, Addabbo/Woerner) — Sen. Joseph Addabbo Jr. (D-NY) and Assemblywoman Carrie Woerner (D-NY) reintroduced parallel bills proposing 30.5% GGR tax to authorize digital slots, table games, live dealer, and poker statewide. NY is the largest untapped iGaming market in the US; passage would add an estimated $1B+ in annual incremental GGR nationally. Note: New York’s existing mobile sports betting tax rate is 51%, making the proposed 30.5% iGaming rate relatively operator-friendly.
- iGaming – Illinois (HB 4797 / SB 3723) — Introduced February 2026 by Rep. Edgar Gonzalez Jr. (D-IL) and Sen. Cristina Castro (D-IL). Proposes 25% adjusted GGR tax; would authorize up to 51 platforms across the state’s 17 land-based casinos. Identical bill failed committee in 2025. Virginia and Maryland also active but stalled.
- Prediction markets — escalation with context — The regulatory arc over the past two years: In 2024, a federal court upheld election contracts, prompting the CFTC to reverse a prior ban. In May 2025, the CFTC dropped its appeal entirely — election contracts confirmed lawful under the CEA. Through spring 2025, federal courts in Nevada and New Jersey sided with Kalshi on sports contracts, finding CFTC preemption; in August 2025, a Maryland court ruled against. In January 2026, Massachusetts ruled against. April 2026, the Third Circuit ruled for Kalshi. The score: 3 federal courts for Kalshi, 2 state courts against. Now: Minnesota Gov. Walz (D-MN) signed SF4760 (May 18) making prediction markets a felony; both Kalshi and the CFTC filed suit within days. CFTC has now filed against AZ, CT, IL, WI, MN, and RI across 2026. Separately, Sens. Adam Schiff (D-CA) and John Curtis (R-UT) introduced federal legislation to ban sports event contracts on prediction market platforms. Kalshi: $5.42B April taker volume (+173% YoY vs. Polymarket’s $1.99B). Series F: $1B at $22B valuation. DraftKings responded by launching its own prediction market product (April 1, 2026).
- Sports betting – Colorado (SB26-131) — Sponsored by Sens. Matt Ball (D-CO) and Byron Pelton (R-CO). Passed both chambers; awaits Gov. Jared Polis’s (D-CO) signature. Bans credit card deposits, caps deposits at 6x per gaming day, prohibits push notification solicitations.
So what? The Q1 OSB revenue miss is the first fundamental confirmation of what the stocks have been discounting for months. Flutter at -50% YTD is pricing in structural market share loss, not a bad quarter — and that’s probably the right frame. The critical variable isn’t this year’s numbers; it’s the Supreme Court. A Kalshi win on CFTC preemption eliminates state gaming taxes on sports event contracts entirely — at 51% in NY, that’s not a pricing disadvantage, it’s a business model disadvantage for every US sportsbook. DraftKings going long its own prediction market product is the correct strategic move; the question is whether they can build volume fast enough to matter before Kalshi owns the category. NY iGaming at 30.5% is a genuine growth catalyst for the online names if it passes — material enough to re-rate the sector.
The Strip
Las Vegas
- Strip Revenue — Q1 2026 Strip GGR: $2.22B (+1.9% YoY). Monthly: Jan $747.7M (-11.0%), Feb $696.3M (+0.9%), Mar $780.0M (+14.4%). Most recent: April $689.4M (+6.6% YoY). MGM Q1 LV net revenue $4.5B (+4% YoY) — first Strip growth since Q3 2024. CEO Bill Hornbuckle: “Q1 was driven by solid group and convention bookings… we expect this momentum to continue into Q2 despite macro headwinds.” Casino-specific GGR fell 5% YoY to $513M as table volume softened.
- Visitation — Q1 total: 9.74M visitors (-0.2% YoY). Air passengers YTD through April: -5.6% YoY — clearest proxy for international weakness. International arrivals -4.8% YoY; Canada -17.4% YoY (Hornbuckle: “Canadian traffic down 30-40% at our properties”); Mexico +1% YoY. Convention attendance Q1: 1.997M (+13.2% YoY) — March +33.4% YoY driven entirely by CONEXPO-CON/AGG (Mar 3-7), a triennial show absent from Q1 2025 and Q1 2027 calendars. F1 Grand Prix: November 2026 (Q4 only).
- Hotel Trends (Strip, Q1) — Occupancy: Jan 82.9% (-2.2pp YoY), Feb 84.7% (+1.2pp), Mar 87.4% (+1.6pp). ADR: Jan $216.0 (+1.9%), Feb $207.3 (+4.3%), Mar $223.6 (+14.0%). RevPAR: Jan $179.0 (-0.8%), Feb $175.5 (+5.8%), Mar $195.4 (+16.1%). Q1 YTD Strip ADR: $213.36 (+5.3% YoY); Strip RevPAR: $181.78 (+4.9% YoY). Strong reversal from full-year 2025: ADR -5%, RevPAR -8.8%. Wynn CEO Craig Billings: “Las Vegas achieved record performance in March, with a 9% YoY increase in casino revenues. The premium segment continues to demonstrate its resilience.”
- Labor / Operators — Culinary Union 32% wage hike (5-year deal, Nov 2023) flowing through all Strip P&Ls — structural margin headwind. Leisure & Hospitality employment: -2,800 jobs in March 2026. LV metro unemployment: 5.8%, among the highest nationally. Sphere Q1 revenue: $386M (+38% YoY).
So what? Strip GGR at +1.9% on a quarter that included CONEXPO is underwhelming — strip that out and the underlying gaming trend is flat to down. The bull case here is entirely in the hotel/non-gaming line: RevPAR +4.9% YTD and ADR +5.3% suggest operators still have pricing power, which protects EBITDA even when gaming revenue disappoints. Canada is the near-term swing factor; -17.4% on international arrivals is material for Wynn and MGM specifically — any diplomatic thaw is an unmodeled upside. Labor costs from the 2023 union deal are baked in and not going away; Street estimates that haven’t fully adjusted for the ongoing drag are still too high on margins.
The Local
US Regional
Las Vegas Locals
- Red Rock Resorts Q1 net revenue: $507.3M (+1.9% YoY, record Q1). Adj. EBITDA: $212.6M (-1.2% YoY). SG&A $114.4M (+9.1% YoY) — construction disruption at Durango, Sunset Station, and Green Valley Ranch pressuring margins; management flagged as temporary. Development pipeline to watch: Red Rock holds 454 acres of developable land across six LV parcels. Active projects include a 123-acre site south of South Point on Las Vegas Blvd (conceptual, roughly Red Rock Casino scale) and a 63-acre Inspirada/Henderson site, in addition to ongoing Durango expansion. 2026 capex guidance: $375-425M. Land monetization or development announcements are a key catalyst for the stock.
- Strip employment as a locals indicator: Leisure & Hospitality shed 2,800 jobs in March; LV unemployment sits at 5.8%, the highest in years. Strip employment is the primary income base for the LV locals market — sustained job weakness would be a meaningful demand headwind for Red Rock and locals operators.
New Jersey
- Q1 2026 total gaming revenue: $725.6M (-0.6% YoY). Casino gross operating profit: $104.7M (-22.9% YoY). Borgata led: $352.7M total ($177.7M casino + $174.2M iGaming). Slot revenue grew; table games declined.
- NYC cannibalization risk: With all 3 NYC casino licenses now awarded — Resorts World Queens (Genting), Hard Rock Metropolitan Park, and Bally’s Bronx — a mature NYC gaming market is projected to generate $4.7-$5.6B in annual GGR post-2031. Atlantic City’s 9 casinos generated $2.89B in 2025. The tristate catchment area that currently drives AC’s drive-to market will have a local option for the first time. Resorts World’s live table games are already operating as of May 5.
So what? NJ’s -22.9% EBITDA compression on flat revenue is a cost story, not a demand story — but with NYC tables now live at Resorts World, the demand story deteriorates from here. Atlantic City doesn’t have a credible answer to $4.7-5.6B of GGR opening up 90 minutes away; the AC operators that don’t have a strong iGaming offset are the most exposed. On the locals side, Red Rock’s land optionality is genuinely underappreciated — 454 acres in a market with effectively no new supply is a scarce asset. The South Strip site alone could be a $1B+ development decision. Watch for management commentary on site timelines; any announcement accelerates the re-rating thesis.
The Orient
Macau & Asia
- Macau GGR (April) — April: MOP 19.89B (~$2.46B USD), +5.5% YoY / -12.0% MoM vs. March’s MOP 22.61B (~$2.8B). Q1 2026: MOP ~66.5B (~$8.2B USD), +14.0% YoY. YTD 4-month total: ~$10.6B. April’s MoM decline reflects VIP hold softness — the YoY trend is the more durable signal. May forecast: analysts project +6.6% to +8.5% YoY (~MOP 22-23B) on Labour Day holiday tailwinds (632,951 visitors May 1-3, +5.0% YoY).
- Market share (Q1 2026, JP Morgan) — Sands China: 26.2% (+1.5pp QoQ), largest gainer — record Londoner Macao contribution. Galaxy: ~20.3% (-1.6pp QoQ). MGM: ~16.2% (-0.4pp QoQ). Melco: ~15.1% (+0.9pp QoQ). Wynn: ~13.4% (+1.2pp QoQ). SJM: ~9.9% (-0.6pp QoQ).
- Premium mass / consumer — Average wager per premium mass player: HKD 28,424 (+41% YoY). Base mass still ~15% below 2019 levels. LVS CEO Robert Goldstein (Q1 earnings): “Macau delivered $608M of EBITDA for the quarter — we are disappointed with that number. We will continue to focus on making the assets work harder to achieve $700M per quarter.” Goldstein said Sands’ Macau properties “will deliver better results in 2026.”
- Margins — Morgan Stanley: Macau GGR to outpace LV and Singapore in 2026 (+~6% YoY), but EBITDA flow-through “weak.” Jefferies: Q1 adj. EBITDA margin “challenging.” Concession reinvestment and rising opex compressing returns across all six operators.
So what? Q1 YoY +14% is a strong print; April’s -12% MoM is hold noise, not a trend break. The Sands story is the most interesting in the sector right now — Goldstein essentially guided to $700M quarterly EBITDA and delivered $608M, a 14% miss that the market is rightfully focused on. The Londoner is taking share and the asset is working, but the margin gap is real. For investors, the cleaner way to play premium mass recovery is Wynn Macau — smaller, higher-margin, gaining share without the same capex drag. Base mass at -15% vs. 2019 is the sector’s most underappreciated upside: if Chinese domestic travel normalizes, it’s worth 10-15% incremental GGR industry-wide and flows disproportionately to operators with strong mass-market floor layouts.
The Number
-10.5% — OSB GGR YoY decline in Q1 2026 ($3.82B vs. $4.27B in Q1 2025), the first hard data point confirming prediction market competition is denting sportsbook revenue. Flutter is down ~50% YTD and DraftKings ~25% — the stocks were early; the revenue is now confirming.
The Projects
Global Greenfield & Development Watch
- NYC Casinos — Resorts World (Genting), Hard Rock, Bally’s — All 3 NYC licenses approved December 2025 ($500M license fee + $500M minimum capex each). Tax structure varies significantly by operator and product type: Resorts World pays the highest rate — 56% on slots, 30% on tables; Bally’s: 30% slots, 10% tables; Hard Rock Metropolitan Park: 25% slots, 10% tables. For context, NY mobile sports betting is taxed at 51% and the proposed iGaming rate is 30.5% — the slot tax disparity creates a structural disincentive to invest in the highest-taxed format. Resorts World Queens (Genting): first live tables opened May 5, 2026. Full buildout still years away. Hard Rock Metropolitan Park (Queens, Willets Point): construction started April 2026, full opening 2030. Bally’s Bronx (former Trump Golf Links at Ferry Point): 2030.
- MGM Osaka (Japan) — ~$10B IR on Yumeshima Island, 2030 target. 470 gaming tables, 6,400 EGMs, 2,500 hotel rooms, 730K sqft MICE. Japan government approved second-round IR application window (May-Nov 2027) — new licenses unlikely before 2028 per MGM management.
- Wynn Al Marjan Island (UAE) — $5.1B project, 67% spent or contracted. Topped out at 283m (December 2025); Spring 2027 target opening. Construction briefly halted early 2026 due to Iranian conflict disruption, now resumed. CEO Craig Billings confirmed timeline intact. UAE’s first and only licensed commercial gaming venue.
- Sands Marina Bay Sands IR2 (Singapore) — $8B expansion; construction contract awarded to Woh Hup (March 2026). Fourth tower (570+ rooms), 15,000-seat arena, expanded casino/MICE. Completion 2030. LVS management: project expected to “exceed company return thresholds.” Additional ~$1B upfront premium under second supplemental agreement.
- Thailand Entertainment Complex Bill — Cabinet-approved draft heading to Parliament. Coalition agreed on 17% GGR tax (down from feared 30%); up to 3 licenses, at least 1 outside Bangkok. Parliamentary vote possible Q3/Q4 2026; first opening pre-2030 is optimistic but 17% makes the unit economics work.
So what? Resorts World’s 56% slot tax versus Hard Rock’s 25% is the most important competitive asymmetry in the NYC market — Genting is being asked to compete with one hand tied behind its back. That disparity is almost certainly what drives Resorts World toward lobbying aggressively for iGaming; at 30.5% proposed GGR tax, online is their ROI path in New York. For the broader Macau names, Osaka and UAE represent 10-year option value, not near-term earnings — but they matter to valuation multiples. Thailand is the one catalyst with a realistic 2026 trigger: if Parliament passes the bill this year, expect Hard Rock, Sands, and MGM to file expressions of interest within 60 days. A 17% GGR tax on a $3-5B annual market opportunity is investable.
The Shift
Moves & Shakers
- Kevin McCrystle named CEO, Gambling.com Group — COO succeeds founder Charles Gillespie, who moves to Executive Chairman
- Lyle Randolph named EVP US Operations, Century Casinos — 30-year regional veteran stepping into top ops role
- Andrew Walter joins High Roller Technologies as Chief Legal & Compliance Officer — previously Director of Sports Betting at the Connecticut Lottery Corporation
Sources: AGA State of the States 2026, AGA Commercial Gaming Revenue Tracker (Q1 2025 & Q1 2026), LVCVA YTD Summary (May 29, 2026), Nevada Gaming Control Board, NJ Division of Gaming Enforcement, Macau DICJ, GGRAsia, AGB, JP Morgan research, MGM Q1 2026 earnings release, Wynn Q1 2026 earnings call, LVS Q1 2026 earnings call, CFTC press releases, Legal Sports Report, iGaming Business, Fortune, Boston Globe, SBC Americas, CDC Gaming, Bettors Insider
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