Acquisitions help Boyd grow Q3 revenues as Nevada properties flourish

Acquisitions help Boyd grow Q3 revenues as Nevada properties flourish

  • Howard Stutz, CDC Gaming Reports
October 23, 2019 10:09 AM
  • Howard Stutz, CDC Gaming Reports
  • Other

Boyd Gaming’s third quarter revenues grew almost 34 percent due to the company’s acquisition a year of five casinos in Midwest. But CEO Keith Smith touted the company’s legacy properties in Nevada with boosting the overall results.

Boyd, which has 29 properties in 10 states, kicked off the casino industry’s third quarter earnings season by reporting cash flow numbers in the Las Vegas locals market that were the highest the company has experienced since 2005.

“Economic strength and growing visitation helped drive continued growth in gaming revenues,” Smith said in prepared remarks. “We also saw double-digit gains in our hotel revenues, with strong improvements in room occupancy and rates across the segment.”

Boyd’s total revenues grew 33.9% in the quarter that ended Sept. 30, primarily due to the five casinos purchased at the end of last year. Four of the properties came through a transaction with Pinnacle Entertainment and real estate investment trust Gaming and Leisure Properties.

Total revenue in the quarter was $819.6 million and included 2.5% increases in both the Las Vegas locals and downtown Las Vegas markets.

Smith said Boyd Gaming is benefitting from a healthy southern Nevada economy. He cited job and population growth statistics and $13 billion in major construction projects across the Las Vegas Valley.

“Southern Nevada’s economy remains on solid ground, giving us confidence in the future of our locals business,” Smith said.

He equally touted downtown Las Vegas, where Boyd has three properties. The segment benefits from Hawaiian business and strong overall visitation. He said “much-needed” room inventory will soon come online with two new properties, including the new Circa Resort, will add 1,300 rooms.

“The outlook is bright for downtown Las Vegas, and we are well-positioned to continue participating in this market’s growth,” Smith said.

The company’s largest revenue jump, 58 percent, came in the Midwest/South region, where Boyd’s newest resorts – Ameristar Kansas City and Ameristar St. Charles in Missouri, Belterra Resort in Indiana, Belterra Park in Ohio, and Valley Forge Casino Resort near Philadelphia – are all located.

“Our newly acquired properties produced strong results under our ownership,” Smith said.

During the quarter, Boyd expanded its sports-betting partnership with FanDuel Group, opened sports books at four company locations in Iowa and Indiana while launching a mobile betting app in Pennsylvania.

The company’s net income jumped 232.9% to $39.4 million, while earnings per share was 35 cents. Total cash flow for the was $213.5 million, up 43.5%.

Over the last eight years, Boyd has acquired 15 casinos in seven different transactions. The company now operates 29 casinos in 10 states, including three in downtown Las Vegas and seven in the Las Vegas locals market.

Smith said Boyd’s planned hotel-casino in Northern California with the Wilton Rancheria tribe “celebrated a significant milestone” when a federal court dismissed a legal challenge to the property near Sacramento.

“We share the tribe’s excitement for the potential of this resort,” Smith said.  “As the closest gaming resort to both Sacramento and the south Bay area, the Wilton resort will be ideally positioned to capture a significant share of the northern California gaming market.”

Union Gaming Group analyst John DeCree told investors in a post-Global Gaming Expo research note that “it is increasingly probable this project will ultimately get built and opens sooner than later. This would be an asset-light and high-margin cash flow stream for Boyd.”

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at Follow @howardstutz on Twitter.