Boyd Gaming touts online gaming entry as the regional casino operator moves past 2020

Boyd Gaming touts online gaming entry as the regional casino operator moves past 2020

  • Howard Stutz, CDC Gaming Reports
February 17, 2021 12:52 PM
  • Howard Stutz, CDC Gaming Reports
  • Other

Boyd Gaming said Tuesday its entry into the online gambling world could become a growth vehicle that helps the Las Vegas-based casino operator recover from the economic devastation the company saw in 2020 due to the COVID-19 pandemic.

During its fourth quarter conference call, Boyd CEO Keith Smith said the company is already generating “solid returns” from its online gaming operations, predominately mobile sports betting in partnership with FanDuel in Pennsylvania, Illinois, Indiana, and Iowa. He said the cash flow from online sports betting contributed $10 million in 2020.

Boyd owns 5% of FanDuel, but the sports betting provider does not operate the company’s Nevada sportsbooks.

 width=

Boyd Gaming CEO Keith Smith

Smith said Boyd is planning to launch an online casino in Pennsylvania by spring which could generate $20 million in cash flow in 2021.

“Online gaming is clearly a compelling growth opportunity for our industry and our company,” Smith said. “By partnering with a proven market leader like FanDuel to pursue these opportunities, we are generating immediate and growing profits from digital gaming today while maintaining flexibility to explore the many opportunities available to us to ensure that we are well-positioned for the future.”

Smith told analysts that lawmakers in Louisiana, Kansas, Missouri, and Ohio – states where Boyd operates casinos – are considering retail and mobile sports betting legislation in their upcoming sessions.

“Looking beyond this year, we see further potential from online gaming,” Smith said.

Closing the books on 2020

For all of 2020, Boyd Gaming’s net loss was $134.7 million, compared to a net income of $157.6 million. Total revenues of $2.18 billion was a decline of 34.5% from 2018.

The company said COVID-19 adversely impacted the company’s results throughout the year, from casino closures that began in mid-March, year-long health and safety operating restrictions, and fourth quarter closures of the Par-A-Dice in Illinois and the Valley Forge in Pennsylvania.

At the end of 2020, Boyd Gaming had cash on hand of $519.2 million, and total debt of $3.95 billion.

Fourth quarter challenges  

During the three months that ended Dec. 31, Boyd’s overall revenues declined 23.7% to $635.9 million, which included a 73.9% revenue decline in downtown Las Vegas. Smith said the market was slowed by lack of business from Hawaii – its primary feeder market – and not from the opening of Circa Resort Casino.

He said it could take three to six months for the business to return.

Meanwhile, Smith noted the company’s off-Strip Orleans Resort is heavily dependent on destination and group business for its convention space, generated by the property’s 1,900-room hotel.

“As a result, this property was more significantly impacted by declines in tourism to Las Vegas,” Smith said.

Boyd’s regional operations accounted for 71% of the company’s overall revenue total in the quarter and was down just 15.5% from a year ago.

Boyd operates 28 casinos in 10 states. Two properties in Las Vegas, Eastside Canary and downtown’s Main Street Station, have remained closed. In December, Boyd sold the small Eldorado Casino in Henderson, Nevada for an undisclosed price.

Smith told analysts that January visitation to its properties across the U.S. made the company optimistic. He said December and the first six weeks of the new year provided encouraging trends for both Las Vegas and regionally.

“Our core customer remains resilient in Las Vegas and across our regional operations,” Smith said. “Operating restrictions are being eased across the country, and the deployment of vaccines is accelerating.”

Digital growth

On Monday, Boyd said it was testing a mobile wallet at the Aliante Casino in North Las Vegas that is connected to its player loyalty card. The wallet, known as “Boyd Pay,” is being used at Boyd’s Blue Chip Casino in Michigan City, Indiana, and Belterra Park in Cincinnati.

Smith said the company anticipates adding the mobile wallet to its casinos in Kansas, Louisiana, and Pennsylvania by the end of March, subject to regulatory approvals.

Eventually, the goal is to add the digital wallet to Boyd’s expanding online gaming ventures.

“This integration will allow us to create a seamless experience for our guests between digital gaming experiences and our traditional properties, creating the opportunity to stay engaged with our customers wherever they choose to play with us,” Smith said.

He told one analyst online casino growth could enhance the customer base company’s retail casino operations.

Boyd’s online casino product is themed after the former Stardust Casino, the Rat Pack-era Strip resort the company operated until it was demolished in 2007. Boyd has long retained the Stardust name and trademarks.

Shares of Boyd, traded on the New York Stock Exchange, closed at $54.61 on Tuesday, up 52 cents or 0.96%.

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