Reno-based Monarch Casino & Resort began a phased opening in November to the long-anticipated hotel and casino expansion at its Black Hawk, Colorado resort. At the same, Colorado imposed new COVID-19 restrictions, reducing occupancy to 25% through the end of the year and closing table games.
The company was also introducing two new non-gaming amenities its flagship Reno resort, just as Nevada lowered its capacity limits.
Monarch leaders didn’t view the timing as a setback in either Colorado or Nevada.
“We were unique in Northern Nevada. We grew market share following the closure and through the rest of 2020,” Monarch Chief Operating Officer David Farahi said Wednesday. “We worked hard to improve guest experience. We reinvested in our properties and we had the balance sheet to do it.”
Farahi said the Atlantis in Reno wasn’t hurt by Nevada’s loss of conventions and meetings business that dried up for much of the year. The property is near the Reno-Sparks Convention Center which went dormant after capacity restrictions put a halt on large gatherings.
The property shuffled business around because its 50,000 square feet of meeting space went vacant. Room rates were lowered since group sales dried.
Still, he said Atlantis grew market share during the and the company invested in the property, opening the Red Bloom Asian Kitchen and the Atrium Bar and Lounge.
“Those investments will pay off,” Farahi said. “We have been showing net gaming revenue growth and have grown in a tough time.”
Macquarie Securities gaming analyst Chad Beynon Monarch’s gaming revenue was down 13% during the year compared to the national average of a 35% decline.
“In 2020, despite local restrictions, Monarch’s two assets outperformed its national peers,” Beynon said.
Truist Securities gaming analyst Barry Jonas suggested the company is well-positioned for a post-COVID recovery. Monarch leadership said some “vaccine-related green shoots” are emerging along with benefits from Black Hawk’s recent expansion opening.
“In addition to the younger demographic the wider casino industry has seen through COVID, Monarch is now beginning to see some of the older core demographic return to the casino after receiving the vaccine,” Jonas told investors.
Monarch put a cap on 2020 in its fourth-quarter earnings announcement, saying its two properties – Atlantis and Monarch Black Hawk – are both located in “economically thriving markets” that are experiencing population growth.
Monarch’s net revenues declined just 6% in the fourth quarter to $58.4 million. Cashflow fell 1.7% to $13.9 million. For all of 2020, revenues declined 26% to $184.4 million while cash flow fell 30% to $43.2 million.
For the year, Monarch reported a profit of $23.7 million, or $1.25 per share.
“2020 was a year of extraordinary contrasts for Monarch as we managed through the unprecedented challenges of the COVID-19 pandemic,” CEO John Farahi said in a statement. “We believe our investments have positioned Monarch to benefit from the post-pandemic recovery.”
In Black Hawk, which is located 45 minutes from Denver, Monarch opened the property’s expanded casino, three restaurants, convention space, and 250 new hotel rooms. Construction continues in the existing facility to convert the casino’s original buffet to a new specialty restaurant, add a poker room and sportsbook lounge, and more slot machines.
John Farahi said Monarch Black Hawk will benefit from last November’s passage of Amendment 77. Colorado voters overwhelmingly supported removing the state’s $100 wagering limit on a single bet and allowed casinos to begin offering several previously forbidden games, such as baccarat, keno, and the big six wheel. The changes go into effect on May 1.
The Black Hawk market contributes 75% of Colorado’s total gaming revenue.
“While we believe these collective actions represent a significant opportunity for the gaming industry state-wide,” John Farahi said. “The quality of our expanded product and exceptional guest service will meet the demand of the high-end segment of the market.”
Monarch shares have climbed almost 4% since the beginning of the year and 17% over the last 12 months. On Wednesday, Monarch closed at $63.55 on the Nasdaq, up $1.99 or 3.23%.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
