Casino industry mergers and acquisitions (M&A) activity is expected to increase in 2025, driven by declining interest rates and a more favorable regulatory environment. This outlook emerged from Truist Securities' 12th Annual GLLR Summit in Boston.

Key factors driving potential M&A activity include:

• Federal Reserve's recent interest rate cuts making financing more accessible
• Expected continuation of rate cuts under President-elect Trump
• More favorable Federal Trade Commission (FTC) administration under nominated Chairman Andrew Ferguson
• Improved velocity of M&A discussions since Fed rate cuts began

Industry analysts note that while 2024 saw numerous rumors but few major casino deals, 2025 could bring significant operator consolidation. However, successful deals will depend heavily on valuation expectations and bid/ask spreads.

Online Gaming Developments

Several major developments are expected in the online gaming sector:

• Caesars Entertainment may consider spinning off its digital operations
• Penn Entertainment could separate its interactive business from land-based operations
• iGaming opportunities remain strong, despite potential state tax revision concerns

Management teams remain optimistic about the industry's prospects, with most believing the likelihood of successful tax increase bills remains low. The combination of favorable regulatory conditions and improved financing options suggests 2025 could mark a significant year for gaming industry consolidation.

The changing leadership at the FTC, coupled with lower interest rates, creates an environment more conducive to large-scale mergers and acquisitions across the gaming sector, potentially leading to significant industry restructuring in 2025.

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