Twin River Worldwide Holdings said limiting its third quarter revenue decline to 9.8% year-on-year represented a positive result in the last set of results to be published before the business is rebranded as Bally’s Corporation next month.
Revenue for the three months to 30 September declined to $116.6m, in a period where the operator was affected by state measures to prevent the spread of novel coronavirus (Covid-19), including capacity limits, restrictions on gaming positions and other amenities.
This meant that the inclusion of revenue from Casino KC and Casino Vicksburg from Eldorado Resorts, after those deals were completed on July 1, only partially offset the declines across the core business.
The additional properties, and lack of other amenities in its casinos, did see gaming revenue grow year-on-year, rising 9.6% to $96.6m. However racing revenue, from Dover Downs, almost halved, falling 48.3% to $1.7m.
Capacity limits contributed to revenue from its hotels falling 38.2% to $6.9m, while food and beverage’s contribution was cut 61.8% to $6.9m. Other revenue came to $4.6m for the period.
While gaming costs were up for the quarter, to $26.0m, outgoings related to racing, hotels, food and beverages, and retail and entertainment all fell. Marketing expenses also dropped to $44.0m, leading to an increase in earnings before interest, tax, depreciation and amortisation (EBITDA), which rose 6.8% to $38.0m.
“We are pleased that in the midst of this unprecedented operating environment, we continue to achieve positive financial results,” Twin River chief executive George Papanier commented. “Our significant margin expansion and early returns from our acquired properties in Kansas City and Vicksburg drove an increase in adjusted EBITDA year-over-year, even amid continued limited capacity.
“These results are a testament not only to our dedicated management team and valued employees, but also to our proven business model,” he added. “I am very proud of how hard the teams at the property level are working to keep our customers and team members safe during this challenging environment.”
After acquisition, integration and restructuring expenses of $2.7m, and $9.9m in depreciation and amortisation charges, Twin River’s operating profit for the period came to $23.4m, up 9.0%.
Once finance related expenses of $16.9m were factored in, and $248,000 in income taxes were paid, the operator’s net profit for the quarter was down only marginally, at $6.7m.
Looking ahead, an M&A spree will see the operator expand its operations to 14 casinos across 10 states, with its $25m deal for Bally’s Atlantic City expected to close in November.
Deals for Eldorado Shreveport in Louisiana and MontBleu in Lake Tahoe, another two Caesars Entertainment properties announced alongside the Bally’s deal, are expected to follow in the first half of 2021.
It will also expand into Illinois through a deal for Delaware North’s Jumer’s Casino & Hotel – expected to close in Q2 2021 – and into Indiana through a deal for Tropicana Evansville, again from Eldorado Resorts.
Once these deals close its casino estate will host approximately 16,000 slot machines, 550 table games, and more than 3,900 hotel rooms.
The acquisition spree also saw Twin River acquire the Bally’s brand from Caesars for an undisclosed sum, which will see its properties rebranded under that name, and the business renamed Bally’s Corporation.
“The Bally’s brand embodies a rich history in American gaming and entertainment, aligns perfectly with our current and future growth strategy, and is ripe with untapped innovation potential to help us launch future entertainment services,” Twin River chair Soo Kim said. “We thank Caesars Entertainment for entrusting us with one of the industry’s most iconic brands.”
The name change will be effective as of November 9, with the business’ stock trading under the BALY ticker from that date.
“This is an exciting and transformative moment for our company as we unite the high-quality customer offerings that span our increasingly national footprint under a singular preeminent brand,” Papanier added.
“The Bally’s brand is core to our drive to become the first omni-channel gaming company to seamlessly integrate and operate physical casinos with digital solutions.
“We remain committed to employing our disciplined acquisition strategy, and leveraging regulatory incumbency as well as our retail customer database, to take advantage of the incredible growth potential that an online future offers.”