CEO Andy Rubenstain said that Accel Entertainment’s 2024 third quarter, with reported revenue of $302.2 million and adjusted EBITDA of $45.9 million, along with income of $4.9 million, was “proof of the resiliency of our convenient local-gaming offering.”
During Wednesday’s investor’s call, Rubenstein also mentioned the pending acquisition of Fairmount Park in Collinsville, Illinois, and the market-wide revenue growth in Illinois of 5% year over year, outperforming the rest of the state, which was down 1% on a comparable basis.
“We’re proud of the foundation we have built across the state, leading in a model that’s a win-win-win for our state, our customers, and local convenience-based gaming providers like us,” Rubenstein said.
Some headwinds were reported. Rubenstein noted there was a “modest drag” from some tax increases and location count was down sequentially. Rubenstein cited two mitigating factors: strategic closures of 22 underperforming locations in Illinois and the cancellation of the July meeting of the Illinois Gaming Board meeting, delaying the opening of some locations.
“It’s not a question if now is the time,” said Rubenstein regarding the closures. “We’re constantly evaluating. In the last years we’ve seen the continuation of inflation, and wages and the cost of goods sold and assets we deploy. Most recently, the biggest hit was the tax hike. In the last legislative session, the state took an additional one percent, half of it hitting us, half of it hitting the establishment owners.
“In many of the situations, it pushed us into a lower profit margin than we’d like. We’ve reacted to that by taking a closer look at those locations and whether we can make adjustments in our cost structure. When we couldn’t get it back to the level we saw fit, we had to make the difficult decisions to redeploy our equipment, either in other locations or to bring to the actual location.”
Rubenstein added, “Regarding our strategic closures in Illinois, we continue to review our portfolio and look for opportunities to prove we’ve identified a subset of our locations … that we’ll phase out over coming quarters. This improvement in the composition of our portfolio will help both top line and bottom line, driven by choiceful segmentation and resource allocation.”
Rege Behe is lead contributor to CDC Gaming. He can be reached at rbehe@cdcgaming.com. Please follow @RegeBehe_exPTR on Twitter.
