Boyd Gaming’s Digital Expansion Counteracts Brick-and-Mortar Decline

Boyd Gaming’s digital enterprise expansion in the initial period counterbalanced the effect of a year-on-year reduction in income from its three primary brick-and-mortar casino operations, leading to an overall revenue decrease of just 0.4%.

Earnings for the three-month period ending March 31 were €960.5 million (£768.4 million/$895.8 million), slightly less than Boyd’s $964 million for the first quarter of 2023.

All three of Boyd’s land-based ventures – Las Vegas Locals, Downtown Las Vegas, and Midwest and South – experienced revenue drops this year. Las Vegas Locals saw the most significant decrease, down 6.1% year-on-year.

Chief Executive Officer and President Keith Smith highlighted that the Las Vegas Locals performance was compared to a record-breaking first quarter in 2023. Smith also mentioned “heightened competitive pressure” in the market, specifically from the Durango Casino Resort which opened in December.

Regarding the decline in the Midwest and South operations, Boyd’s primary revenue source, Smith attributed it to unfavorable weather conditions earlier in the first quarter. In January, the US experienced several severe winter storms, impacting land-based casino attendance in various markets.

Despite these setbacks for Boyd, Smith remains hopeful about the remainder of the year.

In spite of these difficulties, there were some positive signs in the initial three-month period, Smith stated. “We witnessed enhanced participation from our primary clientele in Nevada, as well as in the central and southern regions, as the quarter advanced.”

Boyd’s internet-based operations continued to expand, providing a ray of optimism. The enterprise reported a double-digit increase in its online earnings, with the division’s EBITDAR reaching $20.5 million, remaining consistent with the previous year.

Smith also conveyed gratitude for the influence of Boyd’s 5% ownership in FanDuel Group. He mentioned that FanDuel’s ongoing expansion and market dominance in numerous states is advantageous to Boyd.

“We are satisfied with the robust commencement to the year for our online division,” Smith remarked. “The division delivered EBITDAR on par with the previous year’s exceptional performance. This was driven by FanDuel’s leading position in online sports wagering across the nation.

“Beyond these financial contributions, we continue to profit from our 5% stake in FanDuel. This investment is appreciating as FanDuel continues to thrive nationwide, and it remains a valuable strategic and financial asset for our organization.”

Boyd’s initial three-month period revenue breakdown was as follows:
Gaming revenue was the most substantial at $634.1 million. However, this represented a 4.6% decrease from the previous year due to declines in physical operations.

Food and beverage revenue remained stable at $72 million.

Digital income experienced a minor decrease, settling at $48.9 million, while lodging revenue reached $6 million. Administrative fees and other income remained relatively consistent at $22.2 million and $36.4 million, respectively.

However, digital revenue came to the rescue, experiencing a significant surge of 19.0% year-on-year to $146.2 million. This almost completely offset the decline in Boyd’s brick-and-mortar operations in the initial quarter.

Regarding the performance of land-based casinos, the Midwest and Southern regions continued to be Boyd’s primary profit generators. Revenue in the first quarter reached $500.8 million, representing a 2.2% decrease from the $512.2 million recorded in the same period last year.

Revenue from Las Vegas locals declined by 6.1% to $225.6 million, while downtown Las Vegas revenue also saw a decrease of 5.5% to $53.5 million. Boyd also reported an increase of 7.2% in management and other revenue, reaching $34.4 million in the first quarter.

Increased expenses impacted Boyd’s profit margins.
Turning to expenditures, total operating expenses for the quarter amounted to $741.1 million, reflecting a 9.1% increase from the $679.1 million recorded in the same period last year. One of the main contributors to this increase was the online business, where costs rose by 23.0% to $125.5 million. In contrast, brick-and-mortar operating costs remained stable or decreased.

Boyd also noted an increase of $41.9 million in finance-related expenses. Consequently, its pre-tax profit reached $177.5 million, representing a 31.5% decrease from the same period in 2023.

The group paid $41 million in taxes, resulting in a net profit of $136.5 million for the first quarter, a 31.7% decrease from the $199.7 million recorded last year. Additionally, adjusted EBITDAR fell by 10.0% to $330.5 million, and adjusted EBITDA (excluding master lease rent expense) declined by 10.9% to $303.3 million.

To summarize, despite the difficulties encountered this quarter, there have been positive signs within the company, including persistent expansion in the fundamental customer gaming sector. Smith stated, “We remain dedicated to controlled marketing and operational tactics, along with our commitment to efficient operations.

Moving forward, we are assured of our capacity to manage the present circumstances and generate value for investors.”

Sign up for the iGaming News Newsletter.