Boyd Gaming (BYD) – Monthly GGR Updates
Boyd Gaming (BYD), one of the many regional casinos, operates 28 casinos across the U.S. (no exposure to Macau) with locations in Las Vegas, Illinois, Indiana, Iowa, Louisiana, Missouri, Ohio, and others.
At the beginning of every month, most investors focus their attention on Macau GGR numbers. However, as the month progresses, we get data out from individual states. From the data collected thus far in 2022, the regional market is doing just fine. For example:
Illinois – Total February GGR came in at $93.6M, up from $87.8M in January
Indiana – Total February GGR came in at $196.2M, up from $184M in January
Iowa – Total February GGR came in at $142M, up from $130.6M in January
Louisiana – Total February GGR came in at $197M, up from $188.2M in January
Missouri – Total February GGR came in at $145.8M, up from $145.5M in January.
Ohio – Total February GGR came in at $178.8M, up from $171.2M in January
Taking this a step further, Boyd’s properties also saw M/M acceleration:
Illinois – Par-A-Dice $4.1M in January and $4.2M in February
Indiana – Blue Chip Michigan City $9.5M in January and $10.7M in February | Belterra $6.6M in January and $7.1M in February
Iowa – Diamond Jo $5.5M in January and $5.9M in February | Diamond Jo-Worth $7.7M in January and $8.4M in February
Louisiana – Delta Downs $12.4M in January and $13.2M in February | Evangeline Downs $5.6M in January and $6.4M in February
Missouri – Ameristar KC $14.9M in January and $16.0M in February
Ohio – Beltarra Park $6.5M in January and $6.8M in February
Finally, it’s worth pointing out that the company also presented at the JPMorgan Gaming & Lodging Forum last week. Some of the takeaways included:
–Business trends began to normalize in January, with consistent demand from the higher value customer. Out of town traffic was a bit of a headwind during the initial delta variant. The omicron impact was more widespread across the database, especially with the older demographic. According to JPMorgan, Boyd is starting to see more stability across the segments, and noted the younger demographic came back. Interestingly, additional competing amenities have not had any adverse impact on the consumer. Lastly, gas prices have historically not had a significant impact on the business given the localized/drive-to nature of its properties, though it noted that if gas prices were to sustain at higher prices for a sustained period of time could have an impact.
-Management views its portfolio of owned real estate as providing ample optionality. According to JPMorgan, Boyd would consider monetizing some real estate to finance deals, though nothing is on the radar and management is cognizant of the added fixed costs that this would generate. Furthermore, there are alternative, better sources of financing in the market. On the M&A front, Boyd outlined parameters for M&A, highlighting: (1) that a deal would need to have a strategic purpose, (2) valuation would need to make sense, and (3) the cash flow generation of the asset would have to be strong/growing.
