Gambling in the USA
Red Rock Resorts Announces Fourth Quarter and Year End 2018 Results
Red Rock Resorts, Inc. reported financial results for the fourth quarter and year ended December 31, 2018. The Company adopted FASB’s new revenue recognition standard (“ASC 606”), effective January 1, 2018. Certain prior period amounts have been adjusted to reflect the full retrospective adoption of ASC 606, with no material impact on operating income, net income or Adjusted EBITDA(1).
Net revenues were $431.5 million for the fourth quarter of 2018, an increase of 7.8%, or $31.2 million, from $400.3 million for the same period of 2017. The increase in net revenues was primarily due to an increase in Las Vegas operations, partially offset by a decrease in Native American management fees due to the expiration of the Gun Lake management agreement in February of 2018.
Net income was $13.2 million for the fourth quarter of 2018, a decrease of 71.3%, or $32.8 million, from $46.0 million for the same period of 2017. The decrease in net income was primarily due to an after-tax decrease in the fair value of derivative instruments of $23.9 million. These results also reflect an out-of-period, one-time, non-cash adjustment related to a lease obligation regarding our corporate office building that increased interest expense by $9.3 million and decreased net income by $8.6 million.
Adjusted EBITDA was $135.1 million for the fourth quarter of 2018, an increase of 10.1%, or $12.4 million, from $122.7 million in the same period of 2017. The increase in Adjusted EBITDA was primarily due to an increase in Las Vegas operations, partially offset by a decrease in Native American management fees due to the Gun Lake expiration.
For the full year, net revenues were $1.68 billion in 2018, an increase of 2.4%, or $38.9 million, from $1.64 billion for the same period of 2017. The increase in net revenues was primarily due to a $69.6 million increase in Las Vegas operations, partially offset by a $31.0 million decrease in Native American operations due to the Gun Lake expiration.
For the full year, net income was $219.5 million in 2018, compared to $63.5 million for the same period of 2017. The increase in net income was primarily due to a gain associated with the extinguishment of tax receivable liabilities, as well as a prior year loss associated with the acquisition of the leases at Boulder Station and Texas Station.
For the full year, Adjusted EBITDA was $509.0 million in 2018, an increase of 2.4%, or $11.7 million, from $497.2 million in 2017, primarily due to a $23.7 million increase in Las Vegas operations, partially offset by a $15.1 million decrease in Native American operations due to the Gun Lake expiration.
Las Vegas Operations
Net revenues from Las Vegas operations were $409.5 million for the fourth quarter of 2018, an increase of 10.4%, or $38.5 million, from $371.0 million in the same period of 2017. Adjusted EBITDA from Las Vegas operations was $121.0 million for the fourth quarter of 2018, an increase of 14.4%, or $15.2 million, from $105.8 million in the same period of 2017.
Native American Management
Adjusted EBITDA from Native American operations was $19.1 million for the fourth quarter of 2018, a 22.1% decrease from $24.5 million in the same period of 2017. The decrease was primarily due to the Gun Lake expiration, partially offset by increased management fees generated under the Graton Resort management agreement.
Palace Station and Palms Redevelopment Update
The Palace Station redevelopment project was completed on schedule and on budget with all aspects of the project open as of the end of 2018. As of December 31, 2018, the Company has incurred $188 million in costs against the budget of $191 million.
The Palms redevelopment project remains on schedule and the budget remains unchanged with the remaining components of phase two expected to be complete in the second quarter of 2019 and phase three expected to be complete in the third quarter of 2019. As of December 31, 2018, the Company has incurred approximately $430 million in costs against the $690 million project.
Balance Sheet Highlights
The Company’s cash and cash equivalents at December 31, 2018 were $114.6 million and total principal amount of debt outstanding at the end of the fourth quarter was $2.91 billion. The Company’s debt to Adjusted EBITDA and interest coverage ratios were 5.0x and 4.4x, respectively.
Quarterly Dividend
The Company’s Board of Directors has declared a cash dividend of $0.10 per Class A common share for the first quarter of 2019. The dividend will be payable on March 29, 2019 to all stockholders of record as of the close of business on March 14, 2019.
Prior to the payment of such dividend, Station Holdco LLC (“Station Holdco”) will make a cash distribution to all unit holders of record, including the Company, of $0.10 per unit for a total distribution of approximately $11.7 million, approximately $7.0 million of which is expected to be distributed to the Company and approximately $4.7 million of which is expected to be distributed to the other unit holders of record of Station Holdco.
Conference Call Information
The Company will host a conference call today at 4:30 p.m. Eastern Time to discuss its financial results. The conference call will consist of prepared remarks from the Company and include a question and answer session. Those interested in participating in the call should dial (888) 317-6003, or (412) 317-6061 for international callers, approximately 15 minutes before the call start time. Please use the passcode: 4563756. A replay of the call will be available from today through February 20, 2019 at www.redrockresorts.com.
Presentation of Financial Information
(1) Adjusted EBITDA is a non-GAAP measure that is presented solely as a supplemental disclosure. We believe that Adjusted EBITDA is a widely used measure of operating performance in our industry and is a principal basis for valuation of gaming companies. We believe that in addition to net income, Adjusted EBITDA is a useful financial performance measurement for assessing our operating performance because it provides information about the performance of our ongoing core operations excluding non-cash expenses, financing costs, and other non-operational or non-recurring items. Adjusted EBITDA includes net income plus depreciation and amortization, share-based compensation, write-downs and other charges, net, tax receivable agreement liability adjustment, related party lease termination, asset impairment, interest expense, net, loss on extinguishment/modification of debt, net, change in fair value of derivative instruments, provision for income tax and other, and excludes Adjusted EBITDA attributable to the noncontrolling interests of MPM.
Company Information and Forward Looking Statements
Red Rock Resorts owns a majority indirect equity interest in and manages Station Casinos LLC (“Station Casinos”). Station Casinos is the leading provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station Casinos’ properties, which are located throughout the Las Vegas valley, are regional entertainment destinations and include various amenities, including numerous restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering. Station Casinos owns and operates Red Rock Casino Resort Spa, Green Valley Ranch Resort Spa Casino, Palms Casino Resort, Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Sunset Station Hotel & Casino, Santa Fe Station Hotel & Casino, Texas Station Gambling Hall & Hotel, Fiesta Rancho Casino Hotel, Fiesta Henderson Casino Hotel, Wildfire Rancho, Wildfire Boulder, Wild Wild West Gambling Hall & Hotel, Wildfire Sunset, Wildfire Valley View, Wildfire Anthem and Wildfire Lake Mead. Station Casinos also owns a 50% interest in Barley’s Casino & Brewing Company, Wildfire Casino & Lanes and The Greens. In addition, Station Casinos is the manager of Graton Resort & Casino in northern California.
This press release contains certain forward-looking statements with respect to the Company and its subsidiaries which involve risks and uncertainties that cannot be predicted or quantified, and consequently, actual results may differ materially from those expressed or implied herein. Such risks and uncertainties include, but are not limited to the effects of the economy and business conditions on consumer spending and our business; competition, including the risk that new gaming licenses or gaming activities are approved; our substantial outstanding indebtedness and the effect of our significant debt service requirements; our ability to refinance our outstanding indebtedness and obtain necessary capital; the impact of extensive regulation; risks associated with changes to applicable gaming and tax laws; risks associated with development, construction and management of new projects or the redevelopment or expansion of existing facilities; and other risks described in the filings of the Company with the Securities and Exchange Commission. In providing forward-looking statements, the Company is not undertaking any duty or obligation to update these statements publicly as a result of new information, future events or otherwise, except as required by law. If the Company updates one or more forward-looking statements, no inference should be drawn that it will make additional updates with respect to those other forward-looking statements.
Red Rock Resorts, Inc. |
|||||||
Consolidated Statements of Income |
|||||||
(amounts in thousands, except per share data) |
|||||||
(unaudited) |
|||||||
Three Months Ended |
Year Ended |
||||||
2018 |
2017 |
2018 |
2017 |
||||
Operating revenues: |
|||||||
Casino |
$ 240,757 |
$ 221,763 |
$ 940,483 |
$ 886,206 |
|||
Food and beverage |
100,971 |
87,995 |
381,197 |
365,448 |
|||
Room |
42,169 |
39,640 |
170,824 |
179,041 |
|||
Other |
27,054 |
22,940 |
100,912 |
92,967 |
|||
Management fees |
20,520 |
27,972 |
87,614 |
118,477 |
|||
Net revenues |
431,471 |
400,310 |
1,681,030 |
1,642,139 |
|||
Operating costs and expenses: |
|||||||
Casino |
84,854 |
79,388 |
326,980 |
311,086 |
|||
Food and beverage |
87,892 |
78,406 |
340,212 |
326,069 |
|||
Room |
19,314 |
19,297 |
78,440 |
81,768 |
|||
Other |
14,320 |
10,074 |
48,431 |
40,332 |
|||
Selling, general and administrative |
92,952 |
92,215 |
390,492 |
380,930 |
|||
Depreciation and amortization |
46,864 |
43,496 |
180,255 |
178,217 |
|||
Write-downs and other charges, net |
13,580 |
3,653 |
34,650 |
29,584 |
|||
Tax receivable agreement liability adjustment |
(263) |
(139,070) |
(90,638) |
(139,300) |
|||
Related party lease termination |
— |
— |
— |
100,343 |
|||
Asset impairment |
— |
— |
— |
1,829 |
|||
359,513 |
187,459 |
1,308,822 |
1,310,858 |
||||
Operating income |
71,958 |
212,851 |
372,208 |
331,281 |
|||
Earnings from joint ventures |
579 |
390 |
2,185 |
1,632 |
|||
Operating income and earnings from joint ventures |
72,537 |
213,241 |
374,393 |
332,913 |
|||
Other (expense) income: |
|||||||
Interest expense, net |
(46,800) |
(31,315) |
(143,099) |
(131,442) |
|||
Loss on extinguishment/modification of debt, net |
— |
(13,355) |
— |
(16,907) |
|||
Change in fair value of derivative instruments |
(14,938) |
11,053 |
12,415 |
14,112 |
|||
Other |
(67) |
(99) |
(354) |
(357) |
|||
(61,805) |
(33,716) |
(131,038) |
(134,594) |
||||
Income before income tax |
10,732 |
179,525 |
243,355 |
198,319 |
|||
Benefit (provision) for income tax |
2,449 |
(133,556) |
(23,875) |
(134,786) |
|||
Net income |
13,181 |
45,969 |
219,480 |
63,533 |
|||
Less: net income attributable to noncontrolling interests |
4,235 |
16,497 |
61,939 |
28,110 |
|||
Net income attributable to Red Rock Resorts, Inc. |
$ 8,946 |
$ 29,472 |
$ 157,541 |
$ 35,423 |
|||
Earnings per common share: |
|||||||
Earnings per share of Class A common stock, basic |
$ 0.13 |
$ 0.43 |
$ 2.28 |
$ 0.53 |
|||
Earnings per share of Class A common stock, diluted |
$ 0.11 |
$ 0.35 |
$ 1.77 |
$ 0.42 |
|||
Weighted-average common shares outstanding: |
|||||||
Basic |
69,283 |
68,486 |
69,115 |
67,397 |
|||
Diluted |
116,414 |
116,274 |
116,859 |
115,930 |
|||
Dividends declared per common share |
$ 0.10 |
$ 0.10 |
$ 0.40 |
$ 0.40 |
Red Rock Resorts, Inc. |
|||||||
Segment Information and Reconciliation of Net Income to Adjusted EBITDA |
|||||||
(amounts in thousands) |
|||||||
(unaudited) |
|||||||
Three Months Ended |
Year Ended |
||||||
2018 |
2017 |
2018 |
2017 |
||||
Net revenues |
|||||||
Las Vegas operations |
$ 409,483 |
$ 370,985 |
$ 1,588,003 |
$ 1,518,442 |
|||
Native American management |
20,365 |
27,842 |
87,009 |
117,968 |
|||
Reportable segment net revenues |
429,848 |
398,827 |
1,675,012 |
1,636,410 |
|||
Corporate and other |
1,623 |
1,483 |
6,018 |
5,729 |
|||
Net revenues |
$ 431,471 |
$ 400,310 |
$ 1,681,030 |
$ 1,642,139 |
|||
Net income |
$ 13,181 |
$ 45,969 |
$ 219,480 |
$ 63,533 |
|||
Adjustments |
|||||||
Depreciation and amortization |
46,864 |
43,496 |
180,255 |
178,217 |
|||
Share-based compensation |
2,417 |
2,195 |
11,289 |
7,922 |
|||
Write-downs and other charges, net |
13,580 |
3,653 |
34,650 |
29,584 |
|||
Tax receivable agreement liability adjustment |
(263) |
(139,070) |
(90,638) |
(139,300) |
|||
Related party lease termination |
— |
— |
— |
100,343 |
|||
Asset impairment |
— |
— |
— |
1,829 |
|||
Interest expense, net |
46,800 |
31,315 |
143,099 |
131,442 |
|||
Loss on extinguishment/modification of debt, net |
— |
13,355 |
— |
16,907 |
|||
Change in fair value of derivative instruments |
14,938 |
(11,053) |
(12,415) |
(14,112) |
|||
Adjusted EBITDA attributable to MPM noncontrolling interest |
— |
(1,780) |
(962) |
(15,262) |
|||
(Benefit) provision for income tax |
(2,449) |
133,556 |
23,875 |
134,786 |
|||
Other |
67 |
1,099 |
329 |
1,357 |
|||
Adjusted EBITDA |
$ 135,135 |
$ 122,735 |
$ 508,962 |
$ 497,246 |
|||
Adjusted EBITDA |
|||||||
Las Vegas operations |
$ 120,971 |
$ 105,790 |
$ 457,379 |
$ 433,640 |
|||
Native American management |
19,124 |
24,548 |
80,795 |
95,897 |
|||
Reportable segment Adjusted EBITDA |
140,095 |
130,338 |
538,174 |
529,537 |
|||
Corporate and other |
(4,960) |
(7,603) |
(29,212) |
(32,291) |
|||
Adjusted EBITDA |
$ 135,135 |
$ 122,735 |
$ 508,962 |
$ 497,246 |
Source: Red Rock Resorts, Inc.
Gambling in the USA
Nebraska’s First Permanent Casino to Open in May in Columbus
Nebraska’s first full-fledged, newly built and state-sanctioned gambling casino is slated to open in Columbus next month, marking a milestone in the state’s rollout of casino gambling.
The Nebraska Racing and Gaming Commission last Friday approved a target opening date of May 13 for Harrah’s Columbus.
“This is a big deal,” commission Chairman Dennis Lee said.
The state’s three other casinos are open, but in temporary facilities. According to construction schedules, all should be open by early next year.
“We’re definitely excited to open the first permanent casino in the state,” said Don Ostert, Harrah’s Columbus general manager.
The 17,000-square-foot casino floor will feature 400 slot machines and 11 live table games, including roulette and craps, Ostert said. It will feature a Brew Brothers restaurant and will offer Caesar’s sportsbook and racebook, Ostert said.
For racing fans, the complex will feature the state’s only 1-mile horse track, though racing isn’t scheduled to begin until August 16. By June, officials hope to have some horses out on the track to test the new surface.
Ostert said officials hope to draw customers from Norfolk and Grand Island, but also from Omaha and Lincoln.
Columbus Mayor James Bulkley said that, from the city’s standpoint, “we are very excited to see it get started and become part of the community.”
The developers incorporated some Columbus history into the casino, he said.
“The location where it is used to be called Wishbones, and it was a venue for years for entertainment, and so people recognize that name, and they have kept that name for the sports bar,” he said.
He expects the casino will draw from Omaha. Although driving to Columbus from downtown Omaha might take close to an hour and a half, the drive from west Omaha is more like an hour, he said.
“I can hit Elkhorn in a short hour today, which is now western Omaha,” he said.
In a few months, Omahans won’t have to leave town to visit a brand-new casino.
At Horsemen’s Park in Omaha, Warhorse Gaming officials are aiming to open their new casino in early August. It will open with 900 gaming positions, including table games and a Sweetwater Cafe.
Gambling in the USA
Gaming Americas Weekly Roundup – April 15-21
Welcome to our weekly roundup of American gambling news again! Here, we are going through the weekly highlights of the American gambling industry which include the latest news and new partnerships. Read on and get updated.
Latest News
Caesars Entertainment announced that the Caesars Sportsbook Mississippi app is accepting mobile sports bets at Harrah’s Gulf Coast in Biloxi, Mississippi. Sports fans 21 and older who are interested in wagering on sports via mobile devices can download the Caesars Sportsbook Mississippi app to register and deposit statewide but must be physically present on-property at Harrah’s Gulf Coast to wager.
The Office of Lottery and Gaming (OLG) has announced that FanDuel’s sports betting app and website has officially launched. This development will introduce FanDuel’s sports wagering platform to District residents and visitors, completely replacing the current GambetDC sports betting app and website.
eCOGRA has been officially authorised by the Secretaria De Prêmios e Apostas (SPA) to operate as a certifying entity for betting systems, live gaming studios and online games in Brazil. This announcement marks a significant milestone as eCOGRA continues to extend its international offering of iGaming testing, inspection and certification (TIC) services in regulated markets across the globe.
Jennifer Shatley, a recognised expert in the field and a highly sought speaker and advisor, has joined the Responsible Online Gaming Association (ROGA) as Executive Director. Shatley has had 25+ years worth of experience, working closely with the treatment community, academics, researchers, government bodies, state councils and gaming industry representatives to promote responsible gaming.
Odditt, a leading provider of innovative sports betting data, tools and analytics, has appointed Elaine Milardo as its new Chief Technology Officer (CTO). With over 25 years of experience in the data industry and key roles at DraftKings and Vistaprint, Elaine brings a wealth of expertise to Odditt’s growing team.
Partnerships
Trustly, the global leader in Open Banking Payments, and Light & Wonder, the leading cross-platform global games company, are bringing cashless, in-person deposits to casino floors with Light & Wonder’s cashless solution, RAPIDPLAY. Building on Trustly’s success with guaranteed payments in online sports betting and iGaming, Trustly will deliver the same seamless, quick and secure online payment experience to the physical casino floor.
Fintech company Sightline has entered into an exclusive partnership with compliance and anti-fraud technology solutions leader GeoComply to bolster the security and efficiency of digital transactions within the regulated gaming industry. Sightline will integrate GeoComply’s cutting-edge IDComply identity verification solution as well as GeoComply’s compliance-grade geolocation tools across its comprehensive suite of digital payment solutions for land-based casinos and online gaming operators.
BetMGM has announced a partnership with GameCode, a distinguished iGaming company focused on the North American market. The partnership includes the launch of Boom Boom Boom, HammerCash, Gold Gold Gold and Super3 series which are now live at BetMGM in Michigan and New Jersey through direct integration. BetMGM plans to offer GameCode’s full portfolio of games in all jurisdictions where the operator’s iGaming platform is live pending regulatory approvals.
SCCG Management has announced a joint venture investment with Numb3rs, an innovative all-in-one payment solution provider built for gaming operators. The partnership aims to transform the gaming sector by integrating Numb3rs’ proprietary tech stack, ECRYPT, into the marketplace, thereby offering a comprehensive suite of payment processing solutions.
Gambling in the USA
Gaming Americas Weekly Roundup – April 8-14
Welcome to our weekly roundup of American gambling news again! Here, we are going through the weekly highlights of the American gambling industry which include the latest news and new partnerships. Read on and get updated.
Latest News
FanDuel Group, the premier online gaming company in North America and an Official Partner of Churchill Downs Inc., announced five time Entertainer of the Year Luke Bryan and Grammy award-winning R&B singer Ne-Yo as the headlining performers at FanDuel’s inaugural Kentucky Derby Party. The exclusive, invite-only event will take place on Friday, May 3 at Paristown Arts and Entertainment District in Louisville, Kentucky from 7:00 PM to 12:00 AM.
TPI, a leading provider of innovative player communication solutions for the casino industry, has appointed Joe Tingson as its new Vice President of Customer Success. With his unparalleled dedication to his customers, Joe will play a pivotal role as a leader for our digital Customer Success and Product teams.
PrizePicks, the largest daily fantasy sports operator in North America, has announced plans for its new 33,000 square foot Atlanta Headquarters, which will be located in the Star Metals Building in Midtown Atlanta. The company plans to grow its workforce by 1000 new jobs over the next seven years, the economic impact of which will be $25M to the state of Georgia.
Century Casinos Inc. has announced that it opened its hotel in Cape Girardeau, Missouri, The Riverview. The Riverview is a 69 room, six-story building with 68,000 square feet that is adjacent to and connected with Century Casino Cape Girardeau. The project cost $30.5 million and was financed with cash on hand.
Churchill Downs Incorporated (CDI) has announced the opening of Terre Haute Casino Resort in Terre Haute, Indiana. The $290 million investment includes a casino floor with 1000 slot machines, 36 table games, and a state-of-the-art sportsbook. The 400,000-square-foot entertainment venue also features regionally inspired bars and restaurants including: Four Cornered Steakhouse, Rockwood Bar & Grill, The Soda Shoppe, Crossroads Center Bar and High Limit Bar.
Bragg Gaming Group Inc., a global B2B gaming technology and content provider, announced that Chief Financial Officer (CFO), Ronen Kannor, has notified Bragg’s board of directors (Board) that he will resign from his position to pursue other career opportunities, effective June 3, 2024. The Company confirms that the search for a replacement CFO has commenced.
Partnerships
EQL Games has partnered with global aggregation leader and NeoGames company, Pariplay, to provide the Virginia Lottery, through an agreement with NeoPollard Interactive, with a series of eInstant iLottery games for their industry-leading digital platform.
JACK Entertainment LLC announced the selection of Konami Gaming Inc.’s SYNKROS to power industry-leading systems technology across its 1.5 million square feet of casino entertainment space. The Ohio-based gaming operator’s portfolio includes a combined 2600+ gaming machines and 85 table games at JACK Cleveland Casino in downtown Cleveland, and at JACK Thistledown Racino, located approximately 10 miles to the southeast.
PrizePicks, the largest daily fantasy sports operator in North America, announced that the company has reunited with the Atlanta Braves as the club’s Official Daily Fantasy Sports Partner for the 2024 season. The partnership extends a longstanding relationship that dates back to 2020, with the two Atlanta-based companies continuing to work together on unique opportunities for their dedicated fans.
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