Boyd Gaming attributed property investments, growth in downtown Las Vegas, and success in its regional markets for producing strong results in the third quarter. It showed annual gains in revenue and earnings and touted its new $750 million project in Norfolk, Virginia.
Property-Level Performance And Trends
During a Thursday conference call with Wall Street investors, Keith Smith, president and CEO, said property-level margins exceeded 39% during the third quarter, with underlying customer trends remaining stable.
“Overall play volumes have been essentially flat on a year-over-year basis throughout the last four quarters, with the exception of the weather-challenged first quarter,” Smith said.
Las Vegas Market Insights
In Las Vegas, Smith said the third quarter reflected a trend similar to what they saw during the first half of this year. The Orleans and Gold Coast, however, continue to be impacted by competitive pressures, while the remainder of their locals segment performed in line with the broader same-store market trends.
Excluding the Orleans and Gold Coast, EBITDAR margins were 49% during the quarter, Smith said. Hotel revenue in Las Vegas continued to grow, benefiting from increased demand. Downtown property investments and growing Hawaiian visitation were led by the Fremont Hotel & Casino posting record third-quarter revenue and EBITDAR performance, Smith said. “We benefited from continued strength of pedestrian traffic throughout the downtown corridor during the quarter.”
Economic Fundamentals And Regional Performance
The fundamentals of the southern Nevada economy remain sound, Smith said. Visitation is strong and job growth is broad-based and long lasting, as the housing market continues to expand.
Outside of Las Vegas, the Midwest and South segment benefitted from a record third quarter at Treasure Chest Casino in Louisiana that opened its land-based casino in June. Smith said it’s on pace to exceed their targeted EBITDAR return.
Excluding Treasure Chest, revenue and EBITDAR for the rest of the segment were even on a year-over-year basis. Margins were 38% during the quarter.
Online Growth And Future Projections
Boyd’s online segment continued to grow with its partnership with FanDuel, Smith said. Based on the strong performance, they are raising the full-year EBITDAR guidance $75 million from the continuing operation, up from $65 million to $70 million. That includes the acquisition of Resorts Digital Gaming in September.
“We’re trying to position ourselves so when other states do approve igaming, we’re ready to expand,” Smith said.
Boyd’s managed business is on track to generate $90 million in EBITDAR in 2024.
Renovations And New Developments
Smith cited room renovations across the country, including at the Gold Coast and Orleans in Las Vegas. They’ve also introduced new restaurants and bars. Renovations are underway at the Suncoast in the west Las Vegas Valley, which he said will help the property complete. It will take another 12 months for renovations of the casino floor, new food hall, and expanded meeting space.
Smith said Boyd is making progress on its planned Cadence Crossing Casino in east Henderson that will replace its Jokers Wild Casino with a new facility that will break ground in November and open in early 2026. It will have 450 slots and grow with the Cadence master plan community. It will eventually expand with a hotel and more casino space.
Norfolk Casino Resort Project
Boyd secured an opportunity to develop a commercial casino resort in Norfolk, Virginia, when the City Council approved the project earlier this month. It plans to break ground next week, but first will open a temporary facility in late 2025. The permanent facility will open in late 2027 and combined, the total project costs are $750 million.
“The facility to follow will be a best-in-market resort property featuring a 200-room hotel, eight food and beverage outlets, and a casino with 1,500 slots and 50 table games,” Smith said.
Encouraging Performance And Future Outlook
The third-quarter performance is encouraging, Smith added, noting the consistency of customer trends and strength of diversity with its online and managed businesses.
“Our $100 million in growth investments delivered strong returns during the quarter, as evidenced by the record results at Treasure Chest and Fremont, and we’re building on this success with a pipeline of new growth opportunities nationwide.”
Josh Hirsberg, executive vice president and chief financial officer, said fourth quarter year-over-year EBITDAR comparisons will be “challenging.” Last year, the quarter benefited from expense adjustments in the Midwest and South.