Gambling in the USA
Monarch Casino & Resort Reports Record Second Quarter Financial Results
Monarch Casino & Resort has reported record operating results for the second quarter ended June 30, 2023.
CEO Comment
John Farahi, Co-Chairman and CEO of Monarch, said: “Our financial results for the 2023 second quarter reflect our strong market position in Black Hawk and a year over year improvement in the operating performance at Atlantis. Net revenue and Adjusted EBITDA grew to all-time second quarter records of $123.7 million and $42.1 million, respectively, resulting in an Adjusted EBITDA margin of 34.1%.
“In Black Hawk, we continued to expand market share throughout the quarter, especially in the upper end of the market. We believe there are further growth opportunities as we continue to penetrate the Denver regional market.
“At Atlantis, we generated strong casino and food and beverage revenue, as guest visits and spend per visit increased year-over-year. Hotel revenue was impacted by renovation work during the quarter on the redesign and upgrade of hotel rooms in the second tower. Hotel performance improved in June as our full inventory of rooms became available to guests. The Reno market remains extremely competitive, we continue to prudently invest in Atlantis to maintain, what we believe is, a market-leading position.
“We remain committed to returning capital to our stockholders. Our strong balance sheet and free cash flow position us to invest in our existing properties, pay quarterly cash dividends and consider potential share repurchases under our existing share repurchase authorization. We continue to evaluate potential acquisition opportunities where we can employ our developmental and operational expertise in a financially prudent manner.”
Summary of 2023 Second Quarter Operating Results
In the 2023 second quarter, net revenue increased 7.3% year over year to $123.7 million, compared to $115.3 million in the prior-year quarter. Casino and food and beverage (F&B) revenues increased 7.8% and 10.8% year over year, respectively, while hotel revenues decreased 1.1% year over year. The increase in casino and F&B revenues was driven primarily by ongoing growth at Monarch Black Hawk. The decrease in hotel revenues was driven primarily by a decrease in the average daily rate.
Selling, general and administrative (SG&A) expenses for the second quarter of 2023 were $25.0 million compared to $23.1 million in the prior-year period, driven primarily by an increase in utility, insurance and marketing and advertising expenses. As a percentage of net revenue, SG&A expense increased to 20.2% compared to 20.0% in the prior-year period. Casino operating expense as a percentage of casino revenue increased to 37.4% during the second quarter of 2023 from 36.5% in the prior-year period, primarily due to increased labor expense. F&B operating expense as a percentage of F&B revenue decreased to 72.3% during the second quarter of 2023 from 77.0% in the prior-year period due to an increase in average check and improved cost management. Hotel operating expense as a percentage of hotel revenue increased to 36.2% in the second quarter of 2023 compared to 34.4% in the same period a year ago, primarily due to a decrease in the average daily rate and an increase in labor expense.
Net income increased 15.3% and diluted EPS increased 15.2% compared to the same period a year ago. The Company generated second quarter 2023 consolidated Adjusted EBITDA of $42.1 million, an increase of $2.7 million, or 6.8%, over the same period a year ago.
Credit Facility and Liquidity
As of June 30, 2023, the Company had cash and cash equivalents of $35.1 million and an outstanding principal balance of $41.0 million under its credit facility. During the 2023 second quarter, the Company made $10 million in principal payments on its credit facility. The Company expensed $0.8 million of interest in the second quarter of 2023 compared to $0.7 million in the prior-year period.
Capital expenditures of $10.3 million in the second quarter of 2023 were funded from operating cash flows and included the redesign and upgrade of hotel rooms in the second tower at Atlantis and maintenance capital spending at both properties.
On June 15, 2023, the Company paid a cash dividend of $0.30 per share to its stockholders of record on June 1, 2023. The cash dividend was funded from cash on hand.
Quarterly Dividend Declaration
The Company is announcing a cash dividend of $0.30 per share of its outstanding common stock. The dividend is payable on September 15, 2023, to stockholders of record on September 1, 2023. This cash dividend is part of the previously announced annual cash dividend of $1.20 per share payable in quarterly payments and subject to quarterly review and evaluation by the Company’s Board of Directors.
PENN Entertainment announced that its stand-alone Hollywood Casino app has launched in New Jersey. The new Hollywood Casino platform is available on Android, iOS, and desktop and can also be accessed via the ESPN BET app. Customers can login to Hollywood Casino using their ESPN BET credentials, allowing for a seamless experience across PENN’s online betting and casino platforms.
Ranked by Eilers & Krejcik as the #2 overall iCasino product in the US, Hollywood Casino offers a variety of online slots, table games, and live dealer content, including original titles from PENN Game Studios, the company’s in-house casino game development studio. Hollywood Casino also includes bespoke live dealer tables and exclusive games such as the recently launched Devils Blackjack, an original title leveraging PENN’s partnership with the New Jersey Devils.
“We’re thrilled to introduce our dedicated, casino-first experience to customers across New Jersey. Hollywood Casino delivers a best-in-class experience with an extensive game library, seamless gameplay, and exclusive content from our in-house studio. This launch builds on the strong momentum we’ve gained since introducing our enhanced standalone app in December,” said Aaron LaBerge, Chief Technology Officer of PENN Entertainment.
The stand-alone Hollywood Casino platform debuted in Pennsylvania last December and is also available in Michigan.
Gambling in the USA
Bitline and Everi Announce Crypto Liquidity for Choctaw Casinos & Resorts in Industry First Development
Bitline, the only provider for casino chip access directly from cryptocurrency, has announced its first major collaboration in the U.S. casino market, teaming up with Choctaw Casinos & Resorts through its collaboration with Everi, a premier provider of financial technology and gaming solutions. This collaboration introduces cryptocurrency and digital assets as a new source of liquidity for casino patrons and marks the first time that such a functionality has been enabled within the American gaming industry.
Leveraging Everi’s CashClub’s comprehensive payment infrastructure, Bitline’s solution is able to efficiently board, screen and verify patrons looking to leverage their digital assets whilst also allowing patrons to move screened assets into custody within minutes. Bitline’s integration with Everi Cash Club, the leading financial access services suite for casino payments, will enable the technology for the benefit of Choctaw Casinos & Resorts, and is the first time that such a functionality has been possible in the U.S. regulated casino market.
Catering to the growing demand for greater cryptocurrency and digital asset integration within the casino industry, the collaboration between Bitline and Everi’s forms a transferable blueprint that offers casino operators and their patrons an alternative way to manage funds, access liquidity, and leverage the benefits of cryptocurrency and other digital assets.
This milestone reflects a strategic shift in how casino operators view and manage financial interactions with their guests. The introduction of cryptocurrency as a liquidity solution provides additional options for guests and lays the foundation for Choctaw Casinos & Resorts as it looks to the future of gaming sector finance, setting a new standard in financial accessibility and convenience.
“Working with Choctaw Casinos & Resorts and Everi to make this a reality is a historical moment for both the casino and blockchain industries. Bitline was conceptualized to advance the gaming sector and offer a wider variety of financial options for the casino industry,” said Richard Jones, CEO at Bitline. “We’re entering an era where digital assets can fundamentally enhance the gaming experience, providing casino operators with a future-ready financial framework that can expand and evolve as the industry does. This collaboration is just the beginning of our vision to modernize casino payment capabilities on a global scale.”
Victor Newsom, SVP Product Management, Payments Solutions at Everi comments “This unique integration combines BitLine’s additional payment accessibility options with Everi’s ability to enable seamless, secure, and regulatory compliant financial transactions for casino patrons. Designed from the ground up to exceed the rigorous compliance demands of the industry as well as the discerning expectations of gaming VIPs around the world, Choctaw’s patrons are now no longer limited to the access, times, amount, and speed constraints of the legacy financial systems. This also significantly reduces risk for our casino customers, such as Choctaw.”
“We are excited to be the first casino in North America to offer our guests another way to play,” said Thomas McDonald, Senior Director of Cage and Credit at Choctaw Casinos & Resorts. “Through our long-term relationship with Everi, a leader in fintech solutions, we will continue to invest in innovative offerings that provide the discerning gaming VIP access to funds in a safe and secure manner.”
The Choctaw Casinos & Resorts integration represents only the first phase of Bitline’s broader mission to bring cryptocurrency solutions to casinos and casino patrons worldwide. As cryptocurrency and digital assets continue to gain traction in the gaming sector, Bitline’s easy to integrate and patented payment model stands poised to become a key player in transforming gaming finance. Future plans include expanding services across other major casinos and gaming markets, both domestically and internationally, establishing cryptocurrency as a new standard feature of the gaming experience.
The solution is to be formally rolled out on March 7, 2025, with the first transaction taking place at Choctaw’s Durant, Oklahoma, location.
The Michigan Gaming Control Board (MGCB) has taken decisive action against five offshore online casinos, sending cease-and-desist letters for violating state gaming laws. These websites offer a variety of casino games, such as slots, poker, blackjack, Keno, bingo, and game show games, in addition to sports betting.
The following unlicensed operators are now under scrutiny following the MGCB’s action:
BetWhale Casino, Curaçao
Black Lotus Casino, owned by TD Investments Ltd., Belize
Coins Game Casino, Curaçao
Love2play Casino, Curaçao and Costa Rica
Orion Stars 777 Players, Sichuan Province, China
“These illegal platforms not only violate Michigan’s gaming regulations but also put consumers at risk by offering unreliable withdrawal options and lacking essential consumer protections. Our top priority is safeguarding Michigan residents by ensuring that all online gaming activities are conducted legally and safely. These operators must stop their activities or face additional legal consequences,” MGCB Executive Director Henry Williams said.
Investigations into these illegal activities have revealed that the operators are in violation of multiple Michigan state laws.
Despite offering various payment options like Visa, MasterCard, PayPal, and cryptocurrencies (e.g., Bitcoin and Ethereum), these illegal operators impose strict withdrawal conditions, often requiring players to wager their initial deposits multiple times before they can access their winnings.
The MGCB has given these operators 14 days from the date of receipt of the cease-and-desist letters to halt their illegal activities.
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