Accel Entertainment (NYSE:ACEL) reported third-quarter revenue of $364 million, up 10% from a year earlier, while adjusted EBITDA rose 12% to $57 million, as the company cited improving productivity in its core Illinois operations and growth across newer markets.
Net income increased to $21 million from $13 million in the prior-year quarter. Chief Financial Officer Brett Summerer said net income included a $6 million non-cash gain related to a change in the fair value of contingent earnout shares, partially offset by roughly $1 million in losses associated with fixed-asset sales.
Illinois optimization supports profitability
Chief Executive Officer Mark Phelan said Accel continued to benefit from its route-optimization strategy in Illinois, its largest market. Excluding Fairmount Park, Illinois revenue increased approximately 7% year over year, while location hold per day increased 9%.
The company achieved those gains while operating 2% fewer locations and 1% fewer machines than a year earlier, according to Summerer. Management attributed the performance to pruning lower-performing locations, investing in stronger venues and deploying better-performing gaming content.
“We’re improving location quality, deploying better content, and putting capital behind these opportunities,” Phelan said, adding that the company had not seen a material impact from broader macroeconomic pressures through the first nine months of 2026.
During the question-and-answer session, Phelan said Accel has seen weaker demand in Las Vegas, but said the company’s other markets have remained resilient. He characterized the company’s distributed, local gaming model as a differentiator, given its presence across roughly 4,800 locations in eight states and markets.
Chicago launch expected within weeks
Accel said it has received its first licenses from the City of Chicago and expects its initial locations to go live in the coming weeks. Phelan said the company expects to use much of its existing Illinois infrastructure to support the Chicago rollout, limiting incremental overhead.
Based on current plans, Accel expects to deploy approximately 4.5 machines per location and add about 100 to 200 Chicago locations annually as the market develops. Over the long term, management expects to capture about one-third of the market, consistent with its share in the rest of Illinois.
Summerer said the city could ultimately support about 2,500 video gaming locations across all operators, after accounting for businesses that can obtain licenses or choose to offer gaming. That could translate into roughly 700 to 900 locations for Accel over time, although the pace of the rollout will depend heavily on licensing activity by the Illinois Gaming Board and the City of Chicago.
Management said the company’s projected pace would imply a four- to eight-year ramp if regulators do not increase approval capacity. However, Summerer noted that the Illinois Gaming Board has at times shifted or added labor to address licensing backlogs, which could accelerate the rollout.
Growth broadens across markets
Nevada revenue increased 25.4% year over year, largely reflecting the addition of Green Valley Grocery locations earlier this year. The company said many of these convenience-store locations operate under space-lease arrangements that produce lower reported hold per day than traditional bar and tavern locations but can provide attractive economics as operations are optimized.
Summerer said the company has begun seeing encouraging performance improvements in Nevada during October as it invests in player experience, gaming content and other operating initiatives. Still, management said demand has softened in both its bar-and-tavern and convenience-store operations in the Las Vegas market.
- Georgia revenue rose 42%, while hold per day increased 25%.
- Nebraska revenue grew 42%, and hold per day increased approximately 32%, driven primarily by gaming content and sales efforts.
- Louisiana revenue increased 20%, with earnings contribution scaling faster than revenue, according to management.
- Montana remained steady, with modest hold-per-day improvement and upgrades of 51 legacy terminals for Northern Winz.
Management said Nebraska’s content strategy has provided players with an experience more comparable to casino gaming, though Summerer said the company expects the incremental benefit from newer content to normalize as it matures and competitors introduce additional offerings.
Fairmount outlook and cash generation
Gaming revenue at Fairmount Park increased approximately 84% from a year earlier in the third quarter, aided by the introduction of table games earlier in 2026. Accel now expects the planned permanent Fairmount Casino to generate approximately $20 million to $25 million in annualized EBITDA over time, compared with its prior expectation of approximately $20 million.
However, the company now expects project costs to be approximately 15% to 20% above its earlier $80 million estimate because of higher construction costs. Summerer said the revised cost outlook is not expected to affect the project’s timing.
Operating cash flow was approximately $79 million in the quarter and free cash flow was about $62 million, aided by refunds tied to tax credits purchased earlier in the year. For the first nine months of 2026, operating cash flow totaled $142 million and free cash flow was approximately $92 million.
Accel ended the quarter with $294 million in cash and cash equivalents and net debt of approximately $272 million. It repurchased about 624,000 shares for approximately $7 million during the quarter, bringing year-to-date repurchases to roughly 2.2 million shares.
Management said it will continue to weigh buybacks against organic investment, acquisitions and debt reduction. Phelan said the company is interested in local-gaming opportunities, including routes and assets similar to Fairmount, but is not pursuing regional casinos or properties that rely on customers traveling significant distances.
About Accel Entertainment (NYSE:ACEL)
Accel Entertainment, Inc is a distributed gaming operator that provides regulated gaming services and equipment to non-casino businesses. The company places and operates gaming terminals in locations such as bars, restaurants, taverns, convenience stores, truck stops, and fraternal or veterans organizations, allowing these establishments to offer legal gaming without operating a traditional casino.
Accel manages the installation, maintenance, monitoring, and regulatory compliance of its gaming equipment.
