Boyd revenue up 3.3 percent; CEO indicates no interest in fantasy sports

An exterior view of the Fremont casino in downtown Las Vegas, Sunday, Jan. 20, 2013.

Boyd Gaming, the casino company whose Las Vegas-area properties include Sam’s Town, the Orleans and the California, reported its third-quarter earnings.

Company: Boyd Gaming Corp. (NYSE: BYD)

Revenue: $546.3 million, up 3.3 percent from pro forma net revenue in the third quarter of 2014. Last fall, MGM Resorts International regained its 50 percent ownership stake in Atlantic City’s Borgata, of which Boyd owns the other half. That means Boyd now has to use some accounting maneuvers to make a fair comparison.

Earnings: $25.4 million, compared to a net loss of $15.1 million a year ago. In the third quarter last year, Boyd faced pretax impairment charges of $12.1 million and $6.2 million to adjust the value of its ownership in Borgata and write down some nonoperating assets “to their estimated recoverable value,” the company said in a statement.

Earnings per share: 22 cents, compared to a loss of 14 cents per share in last year’s third quarter.

What it means: Boyd had a strong quarter across all of its geographic segments.

Among its properties geared largely toward Las Vegas locals, revenue rose 4.8 percent year over year to $148 million. Boyd said it saw continued revenue gains from gaming as well as nongaming business, which grew for the ninth straight quarter. The company said all of its locals-focused properties performed well, but the Orleans and Gold Coast had particularly strong quarters.

Boyd Chief Executive Keith Smith noted on a conference call with analysts that the local economy has continued to show signs of strength, including in job growth and average wages, which is resulting in increased consumer spending in the Las Vegas locals market.

In downtown Las Vegas, where Boyd runs the California, Fremont and Main Street Station casinos, revenue increased slightly to $56.7 million, compared to $53.4 million last year. The company attributed its revenue growth to “continued gains in pedestrian traffic throughout the area,” in addition to strong business from Hawaiian customers, an important market for Boyd.

Meanwhile, at the Borgata in Atlantic City, revenue grew 13.1 percent from last year to $237.5 million.

Smith also indicated on the conference call that his company has no plans to enter the daily fantasy sports market.

Nevada regulators recently decided that daily fantasy sports constitutes gambling under state law, meaning companies need a license to provide it. That led fantasy sports companies such as FanDuel Inc. and DraftKings Inc. to cease operations in the state. While licensed companies such as Boyd now have an opportunity to offer daily fantasy sports, none appear to be in a rush to do so.

Smith said daily fantasy sports is clearly a form of gambling, but how that affects sports betting nationwide is a different conversation.

“I think the first focus is to make sure that fantasy sports is viewed for what it is, which is gambling, and that it is regulated and that no more scandals appear in that product, because I think any of those scandals serve to hurt us overall as a gaming industry,” Smith said.

Boyd’s total debt at the end of the quarter was $3.34 billion.

Gaming

Share