Earning Our Keep
How the Best Operators Will Win in 2026
by Howard McAuliffe, Partner, Pinnacle Entertainment Group
Well, we made it. We’re closing the books on 2025, and as we stand on the threshold of 2026, the industry-wide numbers are telling a story some of you already know.
The post-pandemic “revenge spending” boom is officially over. The easy money is gone.
Let’s not sugarcoat it: most locations are reporting that they are down 5% to 10% from the highs of the last couple of years. The inflationary pressures on the consumer, the return of student loan payments, the simple fact that a family’s discretionary income is being squeezed from every direction – it’s all finally caught up to us. Tariffs are increasing business expenses making it tougher on business owners.
The operators who are crying into their cash boxes or iTellers are the ones who thought 2023’s numbers were the new normal. They were not.
However, I’m seeing a fascinating split in the market because not everyone is down. We have clients who are flat, and some who are even up against last year’s numbers. What are they doing differently? They are getting obsessed with the details. They are tailoring their offerings to the new macroeconomic reality, driven by industry wide data. They are taking direction from us more intently and really learning how to operate at the highest level.
Winning in a “Value” Economy
This 5-10% downturn isn’t a recession; it’s a re-focusing. The customer hasn’t stopped spending, but they have become intensely critical of where they spend. They are looking for value, and I don’t just mean “cheap.”
In 2019, a family might go out for a casual dinner one night, go bowling the next, and hit the movies on the weekend. In 2026, they are choosing one of those. Our job is to be that one, non-negotiable choice.
This is where the “great integration” I talked about last year becomes critical. The FECs that are winning are the ones where the food and beverage operation isn’t an afterthought – it’s part of the draw. The game room, the bowling, the VR… that’s the engine that extends the stay and increases the total guest spend, and if done right will be an attraction driving more traffic. Cleanliness, game maintenance, and friendly staff are no longer “details” – they are the base-level requirements for survival.
The Strong Get Stronger
I’ll tell you a secret: I love times like these.
Tough times are when the best operators get stronger. The weak operators, the ones who were riding the wave of “revenge spending” without investing in their business, without updating their game mix, and without training their people – they are the ones who will struggle. The best operators are going to gain market share in 2026.
For our street operators, this is your moment to prove your value. Your bar and tavern locations are feeling the pinch, too. The “gray market” machine in the corner isn’t running leagues, it’s not part of a networked music program, and it’s not bringing in crowds on a Tuesday. You are the partner who can do that. You are the consultant who can help that bar owner reverse their 5% downturn.
Why I’m More Excited Than Ever
This all sounds tough, I know. But the truth is, I have never been more excited about our industry.
It’s a business for the operators who live and die by their data. The ones who use their cashless system not just for payments, but for loyalty programs, dynamic pricing, and targeted promotions that give customers the value they crave. It’s for the operators who obsess over the details, who know that a clean bathroom is as important as a new game.
The technology is finally mature. The data is at our fingertips. The “easy mode” is over, and the challenge is back. 2026 will be the year the professionals take back the game.
Let’s get to work.
Howard McAuliffe loves to imagine and implement new products, business models, and ideas, and is CEO and president of Pinnacle Entertainment Group Inc. He’s an industry veteran who got his start in the business when he was just 16 and has 20 years of expertise in product development, as well as FEC and route operations. Howard’s wife Reem and young son Sami are the center of life outside of work. When he’s not working, Howard can be found enjoying the outdoors, hiking, fishing and mountaineering. Traveling anywhere new or to old favorites like the American West is a passion. Readers can visit www.grouppinnacle.com for more information or contact Howard at howardmc@grouppinnacle.com, he welcomes positive as well as constructive feedback and counterpoints.