Virtually all gambling activity in the U.S. is at a standstill. Sports competitions were the first to go offline because of the coronavirus, leaving sportsbooks scratching their heads and trying to figure out alternative methods to stay alive. Next, casinos began shutting down – either voluntarily or through official orders – and, now, almost every gambling house in the country has halted operations. As all casino operators are stressed over the current situation, some are seeing a larger financial impact than others. Boyd Gaming is one of these, and sees things getting worse before they get better. In an effort to not take a larger hit than necessary, the company has been forced to announce that it won’t be paying out a quarterly dividend. It is also preparing updated financial guidance for the rest of the year, which will most certainly show figures drastically lower than previous projections offered.
Boyd operates almost 30 properties across ten states in the U.S. In many cases, the temporary shutdown is going to be extended, which is going to further impact the company’s bottom line. Boyd issued a statement this week, explaining, “The Illinois Gaming Board has extended its previous closure order to April 8. This closure order impacts all gaming operations in the state of Illinois, including Par-A-Dice, which closed on March 15.”
A similar situation is emerging in Nevada and Louisiana. Nevada is on a 30-day lockdown and Louisiana just extended its suspension. Boyd points out, “The Louisiana Gaming Control Board has extended its previous closure order through April 12. This order impacts Amelia Belle, Delta Downs, Evangeline Downs, Sam’s Town Shreveport, and Treasure Chest, all of which closed on March 17 in compliance with a statewide closure order from the Board.”
As the nationwide suspension drags on, Boyd will do everything within its power to reduce expenses. This includes suspending any dividend and exploring other areas where it can save. The impact of COVID-19 is causing the company to re-evaluate its financial performance for the rest of the year, and Boyd officially withdrew its previously-released guidance on that performance, pending a resolution to the current shutdown. The company also states that it won’t be issuing any new guidance until further notice.
Not paying the dividend has positive results for the company. According to previous payouts, the company is looking at saving around $21.85 million by withholding the dividend for an entire year, an amount that will go a long way to helping Boyd survive the current situation. Boyd was trading at $27.55 a month ago, and is now at $15.38.
