Colorado-based Century Casinos did not lay out a timeline for completing its $195 million acquisition of the Nugget Casino Resort in Sparks, but the company’s co-CEO said the Northern Nevada resort won’t need a massive overhaul.
In prepared remarks during Century’s third-quarter earnings conference call last week, Peter Hoetzinger told analysts the Nugget’s 75,000-square-foot casino floor would see some upgrades, such as new slot machines, while small improvements are planned for other areas.
“With the Nugget, we are purchasing an existing operation with a long operating history,” Hoetzinger said of the 1,382-room resort that is currently operated by Marnell Gaming. “We do not expect any extraordinary replacement (capital expenditures) for the first year.”
One of the goals is integrating the Nugget, Marnell Gaming’s single casino, into Century’s company-wide systems.
The Nugget is one of Northern Nevada’s largest hotel-casinos with 110,000 square feet of meeting space, nine restaurants, a 700-seat showroom and other amenities.
Once the deal is finalized, the Nugget will become Century’s flagship resort. The company operates two casinos in both Colorado and Missouri and one casino in West Virginia. Century is also in the process of acquiring the operations of the Rocky Gap Casino Resort in western Maryland from Las Vegas-based Golden Entertainment as part of a $260 million deal with real estate investment trust VICI Properties.
Century also operates four casinos in Canada and is attempting to sell its casinos in Poland. Hoetzinger said the Nugget and Rocky Gap deals allow the company to focus on North America with a portfolio “that reaches from east to west.”
In an interview in August, Century Executive Vice President Andreas Terler, who oversees the company’s U.S operations, said the company is focused on finalizing the Nugget acquisition.
“If you’re a gaming company, wouldn’t you want to be in Nevada?” Terler said. “It’s basically been a dream for us and we’ve been looking for the right opportunity.”
Stifel Financial gaming analyst Jeffrey Stantial told investors in a research note that Century may not be finished acquiring available “small-to-mid-size” casinos in the U.S.
“Management continues to see attractive acquisition targets being marketed in the U.S., with favorable supply-demand dynamics given limited competitors,” Stantial wrote.
Century had operating revenue of $112.6 million in the quarter that ended Sept. 30, a decline of 4 percent from a year ago, with cash flow of $20 million, a 22 percent drop.
The company is in the process of moving the gaming operations at its property in Caruthersville, Missouri, from a riverboat to a land-based facility. The location was also affected by low water levels along the Mississippi River, requiring the casino to be downsized and moved to a temporary location while the permanent site is constructed.
Century added a hotel to the Caruthersville casino and is also building a hotel at its second Missouri casino in Cape Girardeau.
JMP Securities gaming analyst Jordan Bender expects 2023 to be “another busy year” for Century, telling investors in a research note he also expects the company will continue to expand.
“Given the timeline of closing a transaction in gaming, the company could look to acquire another asset in mid-2023 and close in early 2024,” Bender said.