Boyd talks up sports betting opportunities as Q3 revenue grows 3.5%

Boyd talks up sports betting opportunities as Q3 revenue grows 3.5%

Monday, October 29, 2018 Posted by News Team
Finance
Chief executive Keith Smith expects sports betting expansion to lead to iGaming legislation in new markets

Boyd Gaming has reported a 3.5% year-on-year increase in revenue for the third quarter of 2018, with the operator claiming to have bolstered its long-term prospects through acquisitions and a partnership with Paddy Power Betfair’s FanDuel Group.

Boyd saw revenue for the quarter rise to $612.2m, largely due to growth in gaming revenue, which increased 4.2% year-on-year to $446.8m. 

Food and beverage revenue also grew, up 1.2% at $86.0m, while revenue from hotel rooms grew 0.6% to $47.9m. Other revenue was up 4.5% at $31.5m. 

The majority of revenue came from its casinos in the US Midwest and southern states. The quarterly total of $344.3m was bolstered by contributions from the Valley Forge Casino Resort in Pennsylvania, acquired on September 17th, and the Illinois-based Lattner Entertainment, acquired on June 1st. 

The Las Vegas Locals segment, however, saw revenue decline 0.4% to $208.8m. This decline was due in part to Boyd focusing on maximising profitable revenue for the segment, the operator said. 

Boyd’s Downtown Las Vegas businesses reported revenue growth of 0.6% to $59.2m, with the segment benefitting from high footfall on the Las Vegas Strip and a strong client base travelling to the venues from Hawaii. 

Operating expenses grew 5.9% to $542.6m, leaving operating income of $69.6m, down 11.9% year-on-year. Finance-related expenses amounted to $52.5m, with the company posting a quarterly profit of $11.8m, down 48.9% from Q3 2017. 

This decline is in part due to a flurry of acquisitions completed in recent months. Since the end of the quarter, the operator has completed the acquisitions of four venues from Pinnacle Entertainment; the Ameristar St. Charles, Ameristar Kansas City, Belterra Resort, and Belterra Park. The deal for the quartet was completed less than a month after Boyd’s deal for the Valley Forge Casino Resort was finalised. 

"Over the last several months we significantly bolstered our Company's long-term growth prospects with the acquisition of five new properties in four states, further expanding our geographic reach and significantly strengthening our robust free cash flow,” Boyd chief executive Keith Smith said. 

“In addition, our recent strategic partnership with FanDuel Group puts us in strong position to take full advantage of emerging sports-betting and interactive gaming opportunities that will expand our appeal to new groups of customers nationwide.”

Boyd is currently working with FanDuel to launch on-premises and mobile sports betting at Valley Forge in Pennsylvania, and has already launched sports betting at its IP Casino Resort Spa and Sam’s Town Tunica venues in Mississippi. 

The operator has also finalised a market access agreement with MGM Resorts, giving it the opportunity to offer sports betting in Maryland, Massachusetts, Michigan and New Jersey and New York. 

"In all, we have potential access to 15 states across the country representing more than 36% of the US population,” Smith said. 

“We expect more opportunities will emerge over the next several years as additional states move forward with the legalization and regulation of sports wagering,” he continued. “This is a unique moment in our industry, a chance to use an attractive new amenity to expand our appeal to new customers and drive incremental visitation to our properties across the country. 

“And as online and mobile sports betting expand across the country, we believe it will provide additional opportunities for growth in other forms of interactive gaming."

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