The sale of the Eldorado Casino in Henderson, Nevada, didn’t rattle the financial register for Boyd Gaming Corp.
The Las Vegas-based regional gaming company still operates 28 casinos in 10 states. A small, slot-machine-only property – located in Nevada’s second-largest city 20 minutes south of the Strip – wasn’t a material piece of business for Boyd, which has a market capitalization hovering around $4.6 billion.
Boyd didn’t even reveal a sales price.
“The Eldorado was a non-core asset to our company, and as we have continued to grow over the years, this property represented a very modest part of our overall business,” Boyd spokesman David Strow said in an email Friday.
Frankly, this might be the type of asset divestiture gaming companies nationwide undertake as the industry moves past the COVID-19 pandemic, which has decimated company finances.
Many casino operators – Boyd included – accessed the debt markets to boost balance sheets with available cash and credit lines. Casino sales allow companies to shed non-core assets and shore up the bottom line. In April, Penn National sold Tropicana Las Vegas to Gaming and Leisure Properties for roughly six months of rent credits.
The deals also bring other operators to the forefront. Bally’s Corp., for example, has become an active shopper over the past 18 months.
Eldorado Casino in Henderson, Nevada – Photo via Shutterstock
Eldorado closed on March 18 when gaming in Nevada was shuttered for 78 days in an effort to halt the coronavirus spread. It was one of three of Boyd’s 10 Las Vegas-area casinos that did not reopen once the closures lifted. CEO Keith Smith said he didn’t anticipate reopening Eldorado until sometime next year.
The casino has a place in Boyd’s history. The late Sam Boyd managed Eldorado after he and his son, Bill Boyd, acquired the property in 1962. Bill, a practicing attorney, handled the casino’s legal work. More than a decade later, father and son launched Boyd Gaming when they developed the California Hotel-Casino in downtown Las Vegas.
In some ways, the property both suffered from and benefited from the pandemic.
It suffered because the closure left employees out of work and a padlocked casino on Henderson’s main downtown boulevard. Eldorado is within walking distance of City Hall and Lifeguard Arena, the practice facility for NHL’s Vegas Golden Knights’ minor league affiliate.
It benefited because new local ownership, DeSimone Gaming, will breathe new life into Eldorado.
The sale mirrored transactions in regional markets, notably, several involving Caesars Entertainment.
Caesars has deals pending in Louisiana to sell Eldorado Shreveport (along with the operations of MontBleu Resort Casino in Lake Tahoe, Nevada) to Bally’s for a combined $155 million, Harrah’s Louisiana Downs Casino and Racetrack in Bossier City to Rubico Acquisition Corp. for $22 million, and Belle of Baton Rouge to CQ Holding Co. for an undisclosed price.
“Everything is for sale every day,” Caesars CEO Thomas Reeg said in August. “We are economic animals. We’re always happy to be wowed by an offer.”
The sales of the Shreveport and Lake Tahoe casinos were planned, as was a pending sale of Tropicana Evansville in Indiana. Louisiana Downs and Belle of Baton Rouge deals were a surprise.
One company that wants to remain on the sidelines is Las Vegas-based Red Rock Resorts. Four of its Las Vegas-area casinos – Palms, Texas Station, and the Fiesta properties in North Las Vegas and Henderson – remain closed. “There is no timetable for reopening,” said Red Rock CFO Stephen Cootey.
Red Rock Resorts CEO Frank Fertitta III said on May 20 the much-troubled Palms was not for sale. The off-Strip casino underwent $690 million in renovations, but Red Rock absorbed more than $34 million in costs due to a failed nightclub venture.
“We can dispel the rumors that the Palms is for sale. That is a rumor, it’s not correct,” Fertitta said during the company’s first-quarter earnings conference call.
Red Rock is hoping to sell two vacant land parcels in Reno but is hinting it might build on an empty 71-acre casino site in southwestern Las Vegas it has owned for 20 years.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter
