Selling a “non-core asset”
Boyd Gaming has reached an agreement with DeSimone Gaming for the sale of its Eldorado Casino in Henderson, Southern Nevada.
Boyd spokesperson David Strow confirmed the agreed deal in an email to the Las Vegas Review-Journal (LVRJ). He declined to disclose the specific terms but described the casino as a “non-core asset” to the company, and “a very modest part” of the overall business. Boyd has not yet confirmed how the sale will affect the property’s staff, or whether it will look to sell additional assets.
Operating under Boyd since 1962, the Eldorado Casino has been dormant since mid-March, when it closed during COVID-19 lockdowns in the area. The casino is one of only three Boyd properties not to have reopened following the March closures. The other facilities are the Eastside Cannery and Main Street Station.
Who is DeSimone Gaming?
DeSimone Gaming is a casino operator in current ownership of two other Henderson properties, these being the Railroad Pass Hotel and Casino, and the Travel Center situated opposite. The company purchased the Railroad Pass Hotel from MGM Resorts in April 2015. The property is the nation’s longest-running casino, continuously operating since 1931.
extremely bullish” about the development of downtown Henderson
Michelle Knoll, a spokeswoman for DeSimone Gaming, told LVRJ that the company is “extremely bullish” about the development of downtown Henderson. However, she declined to confirm any further details about the Eldorado Casino’s development. The facility currently has 17,756 square feet of gaming space, in addition to a sportsbook and dining options.
A tough year for brick-and-mortar casinos
In August, the effects of the pandemic forced Boyd Gaming to halt the Eldorado’s liquor and gaming licenses until June 2021. Boyd is not the only casino operator in Nevada to action closures. MGM Resorts, Caesars Entertainment, and Wynn Resorts have all announced weekday closure policies for certain Las Vegas properties as travel and visitor figures remain low.
As a result, gambling operators with a land-based focus have seen revenue decline in 2020. For Q3, Boyd Gaming reported revenue of $652.2m, a decrease of 20% from 2019 levels. Revenue for the first nine months of 2020 fell by 40% to a total of $1.5bn. Despite this, operating costs actually fell 26% to $525.1m.
MGM and Wynn experienced a similar downtrend. MGM opened the last of its casinos in Q3 2020, but its net revenue still fell by 66% year-on-year, reaching $1.1bn. The operator attributed this to “a partial quarter of operations” and “pandemic restrictions”. Wynn saw an even steeper decline for the quarter as revenue fell by 78% to $370.5m. Wynn Las Vegas posted a drop of 53% year-on-year.
The shift towards online
The COVID-19 pandemic has caused many traditional brick-and-mortar casino owners to strengthen their online offering.
In August 2018, Boyd Gaming formed a strategic partnership with online sports betting operator FanDuel. The agreement allows it to leverage FanDuel’s technology to operate Boyd Gaming-branded online sports betting and gaming services. The partners have launched in a number of new markets this year, including Iowa and Illinois.
deal with FanDuel has seen company shares increase by 200%
As reported by Forbes, Boyd’s deal with FanDuel has seen company shares increase by 200% since the lows experienced during casino closures in March. However, the business media company said it doubts there will be any further increase in share prices. Forbes warned that news of a COVID-19 vaccine and improvement in travel demand may limit online growth moving forward.