Dover Downs’ new owner offers  upbeat view of racino’s prospects

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While final earnings figures have not been released Dover Downs owner Twin River Holding is upbeat regarding its acquisition of Dover Downs Gaming and Entertainment earlier this year.

Final resultsshould be out this week.

The Rhode Island company did not break out preliminary results for Dover Downs separately but did show positive results for the combination of Biloxi, and Dover. Combined, the casino-resorts generated between $4.7 million and $5.7 million of adjusted EBITDA, (earnings before interest, taxes, depreciation, and amortization) for the second quarter. The information came in a filing with the Securities and Exchange Commission.

The earnings are far smaller than the hefty numbers from the company’s two Rhode Island casinos, which combined generated between $37.1 million and $39.1 million of adjusted EBITDA for the second quarter.

George Papanier, Twin River CEO stated, “Financial performance at Dover during our first full quarter of ownership exceeded our already high expectation due to our initial integration and optimization efforts and yet we still anticipate substantial physical and operating changes to be implemented.”

The company has yet not announced specifics regarding any major changes

Papanier said the Rhode Island casinos are seeing new competition from the Boston area, with Twin River complaining about the state’s choice of a slot machine vendor.

“Although the New England gaming markets performed solidly through the first quarter of this year, we did see some softness beginning early in the second quarter prior to the opening of the new Boston competition, and extending through the end of the quarter. We attribute some of this softness to a challenging comparable period in 2018 as pent up demand in the second quarter of 2018 resulted from poor weather in the prior quarter. A decrease in the amount of tax return dollars as a result of the prior year federal tax legislation may also have played a role in the current quarter,” the CEO noted.

Twin River is expanding its regional footprint, due in part to competition on its home turf.

The company earlier announced it will buy casinos in Vicksburg, MS, and Kansas City from Eldorado, which is acquiring casino behemoth Caesars and is selling off some Caesars properties to help pay for the multibillion-dollar deal.

Turning again to Dover, Papanier stated, “Again, this property is ramping its operations and financial performance faster than expected and, with our numerous implemented and planned changes and upgrades to both the marketing plan and customer experience, we expect to further improve upon this upward trajectory.”

Prior to the Twin Rivers purchase, Dover Downs struggled to remain profitable, due to Delaware’s high revenue sharing figure, its debt loadand costs of the complex, which includes the state’s largest hotel and a harness racing operation. Dover and other casinos in the state continue to face stiff competition from venues in Maryland and Pennsylvania.

The state stepped in during 2018 to provide relief to the state’s three racinos that offer gaming and horse racing. Twin River then swooped in to acquire a Dover Downs with brighter prospects.

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