Opening of Sky River boosts Everi

Opening of Sky River boosts Everi

  • David McKee, CDC Gaming Reports
August 22, 2022 3:53 PM
  • David McKee, CDC Gaming Reports

While the August 16 opening of $500 million tribal Sky River Casino, near Sacramento, made headlines, one of the underlying stories was the uplift it gave Everi.

Everi supplied 15 percent of the slots on the gambling floor, 300 out of 2,000 total, a major advance over its average six percent floor share in the rest of the gaming industry. It’s also Everi’s first deal with Boyd, signifying a potential breakthrough with a large new customer.

These were some of the key points that B Riley Securities analyst David Bain made in a write-up of recent meetings with Everi executives.

Bain interviewed Chief Financial Officer Mark Labay and Senior Vice President of Investor Relations Bill Pfund and found them “incrementally bullish on shares.” Bain emphasized that Everi’s recent gains came amid “accelerated industry buying levels” and that Everi is the fastest-growing game supplier compared to three years ago, before the pandemic.

Everi is also gaining market share with a financial-technology application, including a digital wallet, that Bain describes as “unique.” The continued rollout of these is increasing Everi’s total addressable market, as underlying trends in the casino business continue to buoy Everi’s performance. This is illustrated by heightened money-withdrawal within Everi’s fintech applications, which are accelerating month over month this summer. Wrote Bain, “These trends directly benefit EVRI’s fintech and gaming operations (participation/lease games).”

Returning to the subject of Sky River and what it portends, Bain expounded, “We view new casinos as a strong indicator of forward-market-share gains/losses, as openings offer casino managers a ‘blank slate’ versus a slower rotation of market share in existing casinos. [Everi] management noted continued strength in mechanical reel games and additional, recent strength in the video segment, a larger category with faster replacements than reels.”

Symptomatic of that muscular video-slot performance is Everi’s Empire Flex cabinet, a mainstay of the product line. More video-cabinet products are expected to be on display at the Global Gaming Expo in October. At present, the company is celebrating a year of month-over-month gain in slot-unit installations. Management’s priority is to increase its footprint, rather than pursue higher win per slot per day, indicating that a $40 win/slot/day average was acceptable and “firmly in place,” according to Bain.

The analyst also raised his estimate of Everi’s fintech revenue, citing higher volume trends and that Everi is about to go live with digital fintech in an additional 20 casinos this quarter, on top of 19 last quarter.

“We believe Sky River could be a top ten percent [gross gaming revenue] generating North American casino. Further, [Boyd] is not an [Everi] corporate customer, signaling at least a potential willingness by BYD to review EVRI as its full fintech supplier longer-term, in our view,” Bain concluded.