We’re smack deep in the middle of another silly season of quarterly earnings reports, so you know the drill; you agree to read them, we agree to provide a thematic slice of feminine pulchritude.
In this instance, we have three Nevada-based casino companies, so who better to accompany them than Nia Sanchez, the first Miss Nevada to win the Miss USA title. Sanchez, who is a fourth-degree black belt in tae kwon do, will compete for the Miss Universe title in January, hopefully by roundhouse kicking at least one member of her competition off the stage. Now on with the show…
Nevada ‘locals’ operator Station Casinos reported revenue up 2.1% to $311m in the three months ending Sept. 30 and earnings rose 11.6% to $89.6m. But the company recorded a net loss of $30.3m in the quarter, a nearly seven-fold increase from the same period last year.
The losses are primarily due to Station’s online gambling subsidiary Fertitta Interactive, which operated under the Ultimate Gaming brand. Ultimate Gaming closed its New Jersey operation in September, which saddled the results with $21.5m in impairment charges. On Friday, Ultimate Gaming officially threw in the towel in Nevada, so expect similar writedowns in Q4.
Things weren’t entirely bleak, as Station’s brick-and-mortar gaming revenue has managed to outperform the broader Nevada locals market over the past 14 quarters. The company also booked $17m in management fees and $10.7m in gaming revenue from two tribal casinos: the Gun Lake Casino in Michigan and the Graton Resort in Sonoma County, California.
Station CFO Marc Falcone said the company had seen “very positive results” from its mobile sports wagering business and Falcone expects further growth as the company adds more functionality to the mobile app. Falcone also said Station had received a “very favorable response” from customers via the recent tie-up with PlayStudios’ myVEGAS social casino app. Falcone expects the PlayStudios relationship “will continue to expand.”
Affinity Gaming, which operates locals casinos in Nevada plus gaming joints in Colorado, Iowa and Missouri, generated $99.5m in Q3, up less than 1% year-on-year. Earnings fell 20.4% to $12.5m thanks to a 128% rise in corporate expenses, including the funding of an ultimately successful campaign to defeat a referendum that would have allowed Colorado racetracks to host slot machines.
Nevada operations – the Silver Sevens in Vegas, three resorts in Primm and the Rail City Casino in Sparks – reported a 2% decline in revenue. Affinity’s three casinos in Colorado rose 1% while the three Midwest casinos were up 4.7%. New CEO Michael Silberling said he was pleased with the “smooth transition” he’s witnessed in his two months on the job.
AMERICAN CASINO & ENTERTAINMENT PROPERTIES
ACEP, which owns the Stratsophere, Arizona Charlie’s and the Aquarius in Laughlin, reported a 4.1% rise in Q3 revenue to $87.9m. Earnings came to $600k, a significant turnaround from the $9.4m loss in the same period last year. The improvement was largely due to non-gaming revenue, which saw hotel revenue up 8% to $19m and beverage revenue up 9% to $18.8m. Gaming, while still accounting for the bulk of revenue, was up a mere 1.3% to $47.7m.