LAS VEGAS (KLAS) Concerns about the Las Vegas economy specifically, slow business on the Strip have been simmering this year, and it seems no one has an answer to what’s going on.

Financial analysts are asking if it’s tariffs, or the weather, or is there something structurally shaky with how Las Vegas works. Caesars Entertainment CEO Tom Reeg, who has offered theories about consumer behavior in the past, doesn’t have an answer this summer.

“It’s tough to put your finger on that,” Reeg said last week. “This is kind of normal seasonality that we haven’t seen in awhile.”

Las Vegas has been on a hot streak coming out of the pandemic. The state saw casinos win record amounts from gamblers three years in a row before the run ended in June, the end of the fiscal year (July 1-June 30). But this year is different.

A few interesting observations have emerged over the past weeks as leaders from Station Casinos, Caesars and MGM Resorts International have been peppered with questions about what’s wrong with Las Vegas this year.

Younger customers

The declines in revenue and earnings aren’t universal. “Easily the best quarter in our company’s history,” said Stephen Cootey, executive vice president, CFO and treasurer at Red Rock Resorts (the publicly traded face of Station Casinos).

Improvement projects at Green Valley Ranch, Durango Casino & Resort and Sunset Station show the company’s continued investment in the locals market. Executives say local customers are happy, particularly at the oldest of those three properties.

Frank Fertita III, CEO and chairman of the board, said renovations at Sunset Station are turning it into the Red Rock Resort of the east valley, and he notes that it is accomplishing a long-term goal that is crucial to the company’s future.

“We really have been able to lower the age group we’ve been able to attract to the property,” Fertitta said.

For years, that has been a goal at casinos as the age of their core customer has continued to go up.

Renovations at all the Stations properties over the years have added something new: casino areas devoted to high rollers. High-limit slots and VIP gaming areas aren’t just on the Strip now. Jackpots hit by players who bet a lot are happening at neighborhood casinos, too.

That’s one of the things being added at Durango, with 120 high-limit slots part of the plan as the casino adds 25,000 square feet on the gaming floor. That addition is expected to be complete in December.

“Durango continues to expand the locals market,” Cootey said. Since opening in late 2023, the casino has added 108,000 customers to its database.

New players

Several of the big companies have noticed an increase in uncarded players. They call them “retail” players, and the numbers have increased over the past year.

MGM, Caesars, Red Rock and Boyd Gaming all mentioned them.

Player databases are valuable to casinos. They track “rated play” to keep track of their best customers. When you get a player’s card, you’re in the system.

Who are these retail players that fly under the radar? Maybe they aren’t interested in earning points toward comps, or they don’t want the casino knowing their business. Whatever the motivation, casinos are noticing that they are opting out.

It’s kind of the opposite of casinos’ efforts to create a “digital wallet” that would be convenient maybe too convenient for some gamblers.

Timing of the downturn

“Vegas started leaking as a market, kind of end-of-May. That leak accelerated into June,” Reeg said.

Caesars revenue from Las Vegas dropped by 3.7% over the April-June second quarter. Net revenues of $1.054 billion were down from the $1.095 billion reported in the second quarter of 2024. Net income dropped from $268 million last year to $212 million this year.

MGM saw a 4% drop in Las Vegas over the three months. But it wasn’t just the big companies.

Blake Sartini, chairman and CEO at Golden Entertainment, saw hotel occupancy at The STRAT Hotel, Casino & Tower plunge to 60% in June. That was far lower than the June average of 82% on the Strip. Last year, June occupancy was 88.3% on the Strip.

The decline follows the drop in visitation (as compared to the same months in 2024) reported by the Las Vegas Convention and Visitors Authority (LVCVA): Down 7.8% in March, 5.1% in April, 6.5% in May and 11.3% in June. So far this calendar year, visitation is 7.3% lower than last year.

Early suggestions that the drop in travel from Canada was to blame only explain part of the decline this year. Overall, Canadian tourists make up only 3-4% of the customers at MGM and Caesars. Reeg acknowledged that it’s an important segment, but he also noted the absence of two big-name entertainers this year: Adele and Garth Brooks.

Another factor: People may not be traveling, but more and more of the U.S. population has access to gambling closer to home. In addition to local casinos, there’s online gambling in some states.

“We think this is a temporary phenomenon in Vegas, but make no mistake, the summer is soft in Vegas,” Reeg said. He expects third-quarter results to be similar to the second quarter, but he has a positive outlook on the fourth quarter and 2026.

Another interesting observation that Reeg spoke of: The ends of the Strip started to weaken in March and April. He didn’t name the resorts.

Tough ‘comp,’ but steady wins

It’s a familiar refrain on earnings calls: When records are set, sometimes it creates a comparison later that doesn’t always look good. Super Bowl in 2024? February 2025 might now measure up. F1 in 2023? November 2024 will have a tough comp.

But there wasn’t a Super Bowl in Las Vegas in 2025, and the debut race for F1 won’t ever be repeated.

Those two events stacked in a four-month time period created momentum for tourism that carried through all of 2024. Las Vegas took full advantage.

Clearly, tourism is down this year, and it is taking a toll. But last year was exceptional, and the comparison looks worse partially because of success in 2024. A comparison of the gaming win over the first six months of the two years show that after February, casinos have been consistent.

In January, statewide 2025 numbers reflect the third-highest gaming win of all time. In February, the Strip’s 2024 numbers are higher because of the Super Bowl.

“The gaming win numbers month-over-month have been overall consistent,” Shelley Newell, senior economic analyst for the Nevada Gaming Control Board, said.

“We continue to monitor the data and find out what led to large wins or large losses for the licensees. In addition, we look to see what entertainment is offered throughout Nevada and good entertainment also drives the numbers,” Newell said.

She pointed to the volatility of high-stakes baccarat and other casino games, but said results have remained consistent and stable despite lower visitor counts.