4 minute read
In Numbers
COVID CUTS EARNINGS
First quarter earnings results from US gaming companies were hit hard by COVID-19, though some companies managed to show resilience.
The majority of the US gaming industry shut down in March when the pandemic began to take its toll on the US, including casinos, tribal casinos, distributed gaming outlets and sports.
However, gaming REITs and companies with online gaming operations fared better than others.
Below are some highlights following first quarter earnings by company:
• AGS plans to lean on recurring revenue for the time being as casino operators will likely cut slot purchases in the near-term. Interactive is approaching the level it needs to be profitable.
• Boyd is focusing on taking steps to strengthen its balance sheet and position itself for reopening casinos when states allow. Las Vegas local operations should benefit BYD as local casinos are not reliant on destination or convention businesses.
• Eldorado Resorts is moving on with the Caesars Entertainment acquisition despite COVID-19, with CEO Tom Reeg calling the decision a no-brainer. Reeg expressed optimism on the potential for improved operating margins for gaming following the closing of the merger.
• Everi Holdings expects to achieve positive EBITDA in the third quarter and positive free cash flow in the fourth quarter after the low point in the second quarter. Initial reports indicate daily slot win is exceeding levels prior to COVID-19.
• Full House Resorts said it needs to generate 50 to 60% of last year’s revenue to break even on EBITDA this year. However, regional gaming typically bounces back quicker than destination markets, which should help FLL’s recovery.
• Golden Entertainment echoed confidence in its properties for reopening, saying the company should benefit from not relying on fly-in, international or group businesses.
• IGT is in a strong position to emerge from COVID-19 stronger, leaner and more competitive, with cash flow expected to return in the second half if there is no second wave of virus outbreaks.
• Melco Resorts remains bullish on the long-term growth outlook for Macau, with the expectation that the Chinese middle class and infrastructure development should help develop the Greater Bay Area.
• Scientific Games held up strong outside of gaming, utilising its diversity as a strength during COVID-19. The company expects to exit COVID-19 leaner and ready to win.
• VICI Properties is remaining committed to being prepared for the worst-case scenario but will stay focused on liquidity, high margins and profit growth. The company’s strong liquidity means it can jump on potential acquisitions or sit back and weather the storm.
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COMPANY
Accel
AGS
Boyd
Caesars
Churchill Downs
Eldorado
Everi
Full House
GLPI
Golden Ent
IGT
Las Vegas Sands
Melco Resorts
MGM
MGP
Monarch Casino
Penn National
Red Rock Resorts
Scientific Games
SciPlay
Twin River
VICI
