Twin River Worldwide Holdings (TRWH) may have a lock on Rhode Island’s gambling scene, operating the state’s only two casinos, but it is beginning to feel pressure from the outside. The company will release its latest financial earnings for the third quarter tomorrow and has already offered a stark warning – don’t expect a very positive outlook thanks to Encore Boston Harbor.
According to data already released by Rhode Island gambling regulators, gross gaming revenue (GGR) in the state, which would represent Twin River Tiverton and Twin River Lincoln, has fallen 9% in the latest quarter, the first full quarter that Encore Boston Harbor, a Wynn Resorts property, has been in operation.
Analysts are taking notice, as well. Brad Boyer of Stifel Financial Corp. points out in a note on TRWH, “Based on WYNN’s reported results and comments from others operating in the market, we sense WYNN’s promotional spend, particularly with respect to its slot business, has remained elevated, an outcome that will likely have negative ramifications for TRWH’s margin performance over the next several quarters.”
The analyst had previously expected TRWH to see turnover of $307 million and $311 million in 2020 and 2021, respectively. However, the latest figures, and TRWH’s warning, have caused him to update the forecast and he now sees revenue of $278 million and $282 million in the next two years, as well as EBITDA (earnings before interest, taxes, depreciation and amortization) of $110 million and $115 million.
Encore Boston Harbor has taken control of the New England region since it first opened its doors, forcing drops at TRWH, as well as MGM Springfield and other regional gambling venues. Despite its domination of the regional market, it is struggling somewhat as well, and will most likely not find the $800 million in GGR for its first year of operations as it had expected.
Still, there’s no doubt that Encore’s rivals are going to feel increasing pressure from the property’s capabilities to draw in gamblers. TRWH has been on a downward spiral for the past several months, reporting table game revenue in July that was 34% lower than a year earlier, and table game revenue in August that was 40% lower.
It isn’t an entirely grim picture for TRWH, just not a pretty one in Rhode Island. Elsewhere, like Delaware and Colorado, the company is performing better. TRWH has Dover Downs in Delaware and that property, following the company’s upgrades, is on target to pay off for investors. Arapahoe Park in Colorado is staying strong and three more properties in the state, all in Black Hawk, are going to be added to its portfolio. With the approval of Prop DD in Colorado, which paves the way for legalized sports gambling, TRWH is poised to see a huge boost in its overall performance.
