Boyd Gaming’s online ventures saw a surge in the initial three months, balancing out a year-on-year dip in income from its core land-based gambling operations. This resulted in a modest overall revenue drop of just 0.4%.
Boyd Gaming’s first-quarter earnings reached $960.5 million (£768.4 million/€895.8 million), a slight decrease compared to the $964 million recorded in the same period of 2023.
Income experienced a downturn across all three land-based operating divisions – Las Vegas Locals, Downtown Las Vegas, and the Midwest and South – with the most significant decline observed in Las Vegas Locals, registering a 6.1% year-on-year drop.
Addressing the decrease, CEO and President Keith Smith pointed out that the Las Vegas Locals performance was measured against an exceptional first quarter in 2023. Smith also acknowledged “heightened competitive pressure” in the market, referencing the opening of the Durango Casino and Resort in December.
Concerning the dip in the Midwest and South operations, Boyd’s primary revenue generator, Smith attributed it to harsh weather conditions at the start of the first quarter. In January, the US faced numerous severe winter storms that impacted land-based casino attendance in several regions.
Despite these setbacks for Boyd, Smith remains confident about the remainder of the year.
Despite these obstacles, there were some positive developments in the initial period,” Smith remarked. “We observed a rise in participation from our primary clientele throughout the quarter, notably in Nevada and in the central and southern regions of the country.”
Boyd’s digital enterprise displayed even greater optimism, with its online operations continuing to expand. The organization reported that this sector witnessed a double-digit increase in revenue and an EBITDAR of $20.5 million, consistent with the previous year.
Smith also commended this expansion, attributing it to Boyd’s 5% ownership in the FanDuel group. He stated that FanDuel’s ongoing growth and dominant position in numerous states is advantageous for Boyd.
“We are satisfied with the robust commencement to the year for our online division,” Smith stated. “The division maintained parity with the previous year’s strong performance in terms of EBITDAR. This was fueled by FanDuel’s industry-leading position in online sports wagering nationwide.
“Beyond these financial contributions, we continue to reap the benefits of our 5% equity interest in FanDuel. The value of this investment is escalating as FanDuel thrives across the nation, and it remains a valuable strategic and financial asset for our organization.”
Initial Period Revenue Breakdown
Examining Boyd’s initial period performance in greater detail, gaming revenue was the most substantial at $634.1 million. However, this figure experienced a 4.6% decline from the previous year due to a decrease in land-based operations.
Food and beverage revenue remained stable at $72.
Boyd Gaming’s digital income slightly dipped to $48.9 million, while lodging revenue was $6 million. Administrative fees and other income remained comparatively steady at $22.2 million and $36.4 million, respectively.
However, the online venture turned things around, with revenue growing 19.0% year-on-year to $146.2 million. This almost entirely balanced out the decline in Boyd’s land-based operations in the initial quarter.
In terms of land-based casino performance, the Midwest and Southern regions remained Boyd’s primary profit sources. Revenue in the first quarter was $500.8 million, down 2.2% from $512.2 million in the same period last year.
Las Vegas local revenue decreased 6.1% to $225.6 million, while downtown Las Vegas revenue also dropped 5.5% to $53.5 million. Boyd also mentioned that management and other revenue increased 7.2% to $34.4 million in the first quarter.
Higher expenses affected Boyd’s profit margins.
In terms of costs, total operating expenses for the quarter were $741.1 million, up 9.1% from $679.1 million in the same period last year. One of the main increases came from the online business, which saw costs rise 23.0% to $125.5 million. In contrast, land-based operating costs remained stable or decreased.
Boyd also mentioned that expenses related to financing increased by $41.9 million. Consequently, its pre-tax profit was $177.5 million, down 31.5% from the same period in 2023.
The group paid $41 million in taxes, resulting in a net profit of $136.5 million for the initial quarter, down 31.7% from $199.7 million last year. Additionally, adjusted EBITDAR declined 10.0% to $330.5 million, and adjusted EBITDA (excluding master lease rent expense) fell 10.9% to $303.3 million.
Although we encountered some obstacles this quarter, we witnessed positive indicators in our business, including sustained growth in core customer interaction,” Smith stated. “We remain dedicated to intelligent marketing and operational strategies, coupled with efficient operations.
“We are confident in our ability to navigate the present circumstances and continue to provide value to our shareholders.”
Subscribe to the iGaming newsletter.