Dover Downs Gaming & Entertainment, Inc. reported a loss in the third quarter, due in part to expenses from a pending merger with a Rhode Island casino.
Share prices were down about 3.4 percent after the earnings release.
The one casino company, which at times has struggled with keeping its stock price above the $1 required for a listing on the New York Stock Exchange, saw its shares rise above $3 on news of the merger in August. Shares have since dropped below $2.50 a share.
Gaming revenues increased 2.8 percent to $36.7 million compared to $35,7 million for the third quarter of 2017.
Slot machine and table game win were both higher, and sports betting win improved as a result of recently expanded sports wagering in Delaware. These increases were offset by lower wagering on horse racing compared to last year.
Other operating revenues of $9.3 million were up slightly compared to the third quarter of 2017 from an increase in food and beverage revenue offset by a decline in rooms revenue during the quarter. Occupancy levels in the Dover Downs Hotel were almost 90 percent for the third quarter of both years, while average rates were lower this year.
Dover Downs continues to face growing competition from big casinos that include the MGM across the Potomac from Washington, D.C., the reopened and upgraded Hard Rock (formerly Trump Taj Mahal) in Atlantic City, and an expanded SugarHouse Casino in Philadelphia.
The Mid-Atlantic region is said to be seeing a glut of gaming venues.
The state has also ranked near the top in the nation in the percentage of casino revenue it takes, even with a recent modest reduction in the rate.
Costs related to the company’s pending merger with Twin River Worldwide Holdings, Inc. were $765,000 during the quarter. Minus those charges, it appears the company would have been marginally profitable.
Including the merger-related costs, the company’s pretax loss was ($149,000) compared with ($225,000) for the third quarter of last year. Net loss was $269,000 compared to $138,000 for the third quarter of 2017.
Capital spending at Dover Downs increased to $3 million or the nine months ended September 30, as compared to $1.8 million for the comparable period last year, related primarily to renovations to the Dover Downs Hotel and improvements related to the recently opened Pearl Oyster Grill.
