The operator sold Rocky Gap to Vici Properties and Century Casinos in a deal worth $260.0m (£213.2m/€244.6m). Vici acquired the venue from Golden Entertainment in July while Century took on the operations.
In addition, Golden Entertainment sold its Montana distributed gaming business towards the end of the quarter.
These sales had a significant impact on Golden Entertainment’s performance in Q3. While the operator reported a decline in revenue, this was more than offset by funds raised from selling assets, with net profit rocketing.
“Following our divestiture of Rocky Gap Casino Resort in July, we completed the sale of our Montana distributed gaming business in September,” Golden Entertainment chairman and CEO, Blake Sartini, said.
“We also remain on track to complete the sale of our Nevada distributed gaming business at the end of the year. The completion of these transactions significantly strengthens our balance sheet, enables return of capital to shareholders and provides financial flexibility to enhance shareholder value.”
Revenue dips 7.6% at Golden Entertainment
Group revenue for Golden Entertainment in the three months to 30 September amounted to $257.7m. This was 7.6% lower than $257.7m in Q3 of last year.
Gaming activities drew $165.2m in revenue, food and beverage $44.5m, rooms $31.4m and other operations $16.6m.
The operator says its Nevada Casino Resorts business drew the most revenue. Activities in the state generated $105.5m, up 6.7% from last year. Revenue from the Nevada Locals Casinos arm was level at $37.9m, as was Nevada Taverns revenue at $26.5m.
Elsewhere, the Distributed Gaming business reported a 10.2% drop in revenue to $81.9m. This was partly due to the sale of Montana operations, which were offloaded in the middle of September. As Sartini states, the Nevada business will follow in the coming weeks.
Golden Entertainment also noted an additional $166,000 in revenue from corporate and other operations.
Asset sales offset Q3 spending Golden Entertainment
Looking at spending, Golden Entertainment says sales completed in Q3 meant it was able to more than offset all spending. Total income on top of revenue was $66.0m, compared to last year’s $243.9m expenses bill.
Total gain on assets sales amounted to $305.8m, with operating costs at $239.8m. Gaming was the main outgoing at $94.8m, although this was 12.2% lower than in Q3 of 2022.
Non-operating expenses reached $15.3m, leaving a pre-tax profit of $308.4m, up 1,506.3% year-on-year. Golden Entertainment paid $67.2m in tax, ending Q3 with a net profit of $241.2m, compared to $14.0m last year.
However, Golden Entertainment noted a decline in adjusted EBITDA, with this falling 12.6% to $53.2m.
Year-to-date revenue down at $822m
Looking at the nine months to 30 September, revenue was 2.3% lower at $822.5m. This was mainly due to a drop in gaming revenue to $535.6m. All other revenue increased, with food and beverage revenue at $137.3m, rooms $92.9m and other $56.6m.
Nevada Casinos Resorts revenue hit $308.3m, Nevada Locals Casinos $119.0m and Nevada Taverns $81.5m. Maryland Casino Resort revenue was $43.5m, with distributed gaming revenue at $261.4m and corporate and other revenue $9.0m.
Operating expenses were 41.0% lower at $430.4m, helped by the asset sales. Non-operating costs hit $52.8m, resulting in $339.3m in pre-tax profit, up 417.2%.
After paying $74.2m in tax, Golden Entertainment posted net profit of $265.1m, an increase of 271.8%. However, as was the case in Q3, adjusted EBITDA was down, falling 14.6% to $173.8m.
Original article: https://igamingbusiness.com/finance/quarterly-results/rocky-gap-sale-drives-net-profit-golden-entertainment-in-q3/
