Twin River Holdings executives told investors Thursday’s the casino operator’s dispute over a slot machine deal with its home state of Rhode Island may not be resolved until next year.
CEO George Papanier said on a quarterly conference call with analysts that despite the contentious relationship between the gaming company and the state, there have been a few short-term compromises.
“We’ve enjoyed good discussions and we’ll continue to work in partnership,” Papanier said.
Under a proposed 20-year deal between the governor’s office and gaming equipment giant International Game Technology, 85 percent of the slot floors at Twin River’s two casinos would house IGT games, shutting out games from many other companies, including Aristocrat and Scientific Games.
IGT, which has a significant corporate presence in Rhode Island, also manages the state’s lottery. The 20-year contract could be worth a potential $1 billion to IGT.
However, Twin River officials have said the company’s casinos need to offer a variety of slot machines from multiple providers in order to remain competitive. Twin River and Scientific Games, IGT’s largest competition in the state lottery industry, have threatened to offer a competitive bid for the IGT contract.
Recently, a compromise was reached that allowed Twin River to replace 360 IGT games at its Tiverton and Twin River casinos with games from other companies. An additional 270 games will also be replaced.
“We’ve seen good revenue trends from the Aristocrat games,” Papanier said.
The regional gaming company, which operates four casino and racetrack, will double in size by next spring after it complete two pending casino acquisitions.
Twin River expects to finalize the purchase of three casinos in Black Hawk, Colorado early next year, Golden Gates, Golden Gulch and Mardi Gras; from Affinity Gaming for an undisclosed price.
“When we did the deal, sports betting wasn’t in the picture,” Papanier said of last week’s vote by Colorado to launch sports betting by next May. He said the company is in discussion with third party sports betting content providers, but no agreements have been reached.
Also, Twin River is buying Isle of Capri Kansas City and Lady Luck Vicksburg (Mississippi) from Eldorado Resorts for $230 million. The deal is also expected to close next year.
Twin River executives told an analyst the company is exploring other potential casino acquisitions, both with a real estate investment trust and direct purchases
In the quarter that ended Sept. 30, Twin River said revenue grew 17% to $129.3 million, due largely to the acquisition of the Dover Downs in Delaware, which contributed $25.9 million in revenue during the quarter. Net income of $7 million marked a 57.3% decline from the 2018 third quarter. Companywide cash flow declined 14.1%.
Twin River’s properties in Rhode Island were impacted by the opening in June of the $2.6 billion Encore Boston Harbor. Total revenue in Rhode Island was, $67.8 million, down 9.3% a year earlier. Cash flow in Rhode Island declined 31% in the quarter.
“While we experienced the anticipated short-term impacts of new competition at our Twin River Casino Hotel in the quarter, we continued to reap the benefits of our disciplined (mergers and acquisition) strategy, with Dover Downs and Tiverton both performing extremely well this quarter,” Papanier said in statement. “Our overall plan is on track and the long-term value proposition we have laid out for our investors remains intact.”
On a conference call, Papanier said Encore is the “only competitive threat the company is seeing” in any of its markets.
Twin River also operates the Hard Rock Hotel and Casino in Biloxi, Mississippi and the Arapahoe Park racetrack in Aurora, Colorado.
Shares of Twin River, traded on the New York Stock Exchange, closed at $24.28 Thursday, down 50 cents or 2.02%.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
