The Las Vegas locals gaming market's apparent 6% year-to-date growth in gross gaming revenue (GGR) may be masking underlying weaknesses, according to Deutsche Bank analyst Carlo Santarelli.

When excluding Red Rock's new Durango Casino & Resort, which opened in December 2023, the local market actually shows a 3% decline in 2024. The Durango property has notably cannibalized business from other Red Rock venues, particularly the Red Rock Resort in Summerlin, offsetting Durango's favorable margin profile.

Red Rock management maintains that Las Vegas Valley population growth will help counteract this cannibalization effect, particularly as planned new casino locations are strategically positioned away from Durango.

Boyd Gaming, another major player in the locals market, faces similar challenges. Despite having geographic diversification, Santarelli projects a 1.5% revenue decline and 3.3% cash flow decrease for Boyd in 2025, contrasting with more optimistic Wall Street forecasts.

For Red Rock Resorts, despite strong analyst support with 9 out of 14 analysts rating it "buy" or "strong buy," Santarelli anticipates slight declines in both cash flow and revenue for 2025. The company faces additional pressure from planned spending, including Durango expansion, which would require significant cash flow growth to offset these investments.

These market dynamics suggest a more cautious outlook for the Las Vegas locals gaming segment than current mainstream analyst consensus indicates.

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