Accel Entertainment, Inc.

What they do

Accel installs, maintains, and operates gaming terminals and related equipment at local businesses like bars, restaurants, convenience stores, truck stops, and fraternal organizations. The company also designs and manufactures gaming terminals through its Grand Vision Gaming unit and operates Fairmount Park Casino & Racing in Illinois, which includes a thoroughbred racetrack, casino, and sportsbook. It offers amusement devices such as jukeboxes and dartboards, and operates cash redemption devices and ATMs.

Revenue drivers

• Illinois distributed gaming (excluding Fairmount Park) — Largest market; revenue increased 6% year-over-year in Q2 2026, driven by improved hold-per-day and customer mix.
• Fairmount Park Casino & Racing — Casino with ~260 gaming positions and 7 table games; generated its highest quarterly gross profit since acquisition; second racing season began April 2026.
• Developing markets (Nebraska, Georgia, Nevada, Louisiana) — Nebraska and Georgia Adjusted EBITDA increased significantly in Q2 2026; completed acquisition of Rice Palace Truck Stop Casino in Louisiana and added ~600 terminals in Southern Nevada.

Recent performance

In Q2 2026, Accel reported record quarterly revenue of $368 million, up 10% year-over-year, and net income of $13 million, up 72%. Adjusted EBITDA rose 11% to $59 million. Operating cash flow was $20 million and free cash flow $10 million, but excluding a $17 million tax credit purchase, operating cash flow would have been $37 million and free cash flow $26 million. The company ended Q2 2026 with 4,676 locations and 29,281 gaming terminals, up 6% and 7% year-over-year, respectively.

Strategy

Accel plans to capitalize on the opening of video gaming in Chicago, where 17 of 38 approved locations are Accel locations. The entire Illinois installed base is now ticket-in, ticket-out (TITO)-enabled, and management expects benefits to build over time. The company is developing a permanent casino at Fairmount Park and pursuing accretive acquisitions and route expansions in new markets. It also returned capital to shareholders, repurchasing approximately 500,000 shares for $5.6 million in Q2 2026, and maintains a low-leverage balance sheet with an undrawn $300 million revolver.

Risks

• Regulatory dependence — Operations require obtaining and renewing complex licenses in each jurisdiction; changes in regulation could limit growth or impose fines.
• Geographic concentration — Heavy concentration in Illinois, Montana, and Nevada heightens exposure to local economic or regulatory conditions.
• Location partner contract renewals — Dependence on winning and renewing contracts with bars, restaurants, and other venues; loss of key locations could hurt revenue.
• Expansion execution risk — Entry into casino and horse racing operations may not succeed; new markets like Louisiana and Nevada carry integration and competition risks.

Outlook

Management expects continued benefits from TITO enablement and the rollout of Chicago video gaming as licenses are issued. Fairmount Park's table games and racing are gaining traction, and the company remains committed to a permanent casino there. Accel plans to continue disciplined acquisitions and route expansions, particularly in Nevada and other developing markets, supported by a strong balance sheet and its undrawn credit facility.