FanDuel relationship continues to help quarterly results for Boyd Gaming Howard Stutz, CDC Gaming Reports · April 28, 2021 at 8:13 am When Boyd Gaming and FanDuel struck their strategic partnership in August 2018, full-scale legal sports betting in the U.S. was just in its infancy. But the activity has grown up rather quickly and Boyd’s bet on FanDuel continues to pay off. “We knew FanDuel had a proven success and a brand with a lot of strength,” Boyd CEO Keith Smith said Tuesday following the Las Vegas-based casino operator’s first-quarter earnings conference call. The company expects its partnership with FanDuel – a 5% ownership stake in exchange for FanDuel operating sports betting and igaming in cooperation with Boyd through its non-Nevada casinos – will result in more than $20 million in cash flow this year. Together, Boyd and FanDuel have established sports-betting products in Pennsylvania, Illinois, Indiana, Iowa, and Mississippi that fall among the top three revenue-generating operators in each state. Smith touted “significant” future sports betting opportunities in Ohio, Louisiana, Missouri, and Kansas, which have either legalized the activity or are considered legislative initiatives. Also, Boyd and FanDuel have launched Stardust-branded online casinos in Pennsylvania and New Jersey. And, with the announcement two weeks ago that FanDuel had become one of three sports betting partners with the NFL, Smith said FanDuel will have even greater opportunities. “FanDuel will have rights to include in-game and post-game highlights directly into its sportsbook app, further separating our partner from the competition in a crowded sports betting landscape,” Smith said. So, is a move into Nevada for FanDuel, where Boyd Gaming operates casinos in the Las Vegas Valley and downtown, in the offing? Smith was non-committal. “It’s a possibility in the future, but for now the relationship is with the non-Nevada properties,” Smith said. “The reason we did the deal is that we knew they were a winner, long term.” Boyd’s first-quarter results were a marked improvement from a year ago when its entire portfolio began to shut down in the middle of March after government leaders ordered casinos nationwide to close due to the growing pandemic. In the quarter, Boyd Gaming grew total revenues 10.7% to $753.3 million. While the Las Vegas locals market saw less than 1% revenue increase and the Midwest and southern casinos grew revenues 23.3%, the company’s two operating downtown Las Vegas resorts – California and Fremont – saw a 60.4% revenue decline in the three-month period. Smith said in his prepared remarks the company is drawing the bulk of its business from local guest segments. However, the numbers from destination travelers remain well below pre-pandemic levels. “This softness has been particularly noteworthy at the Orleans (in Las Vegas), which draws a significant amount of business from destination travelers,” Smith said. “It has also impacted our downtown Las Vegas segment, where visitation from our core Hawaiian customers has been severely restrained by travel restrictions.” The Nevada Gaming Control Board said Tuesday downtown Las Vegas casinos saw revenues jump 63.4% in the month of March to nearly $71 million. In fact, the downtown market was one of five statewide reporting regions that set single-month records total gaming revenue. Smith credited last year’s opening of the Circa Resort Casino, which is adjacent to two of Boyd’s three downtown casinos, with giving the market a boost. Smith said the continued rollout of COVID-19 vaccinations and lifting of capacity and operating restrictions would improve the visitation habits of the company’s “rated destination customers.” In Las Vegas, casinos will go to 80% capacity on Saturday. Smith said the increase will have a “positive psychological effect” and “might drive more people to town.” He said Boyd has opened much of its non-gaming offerings. But many are operating on limited hours. “We’ve proven in the first quarter and last year that we don’t need any more capacity to generate strong results,” Smith said. Boyd said its net income for the quarter that ended March 31 was $102.2 million, compared to a net loss of $18.3 million a year ago. Two Boyd properties will remain closed indefinitely; Eastside Cannery in the Las Vegas locals segment, and Main Street Station in Downtown Las Vegas. Smith said the continued rollout of COVID-19 vaccinations and lifting of capacity and operating restrictions would improve the visitation habits of the company’s “rated destination customers.” Boyd ended the quarter with cash on hand of $730.9 million, and total debt of $3.94 billion. Shares of Boyd, traded on the New York Stock Exchange, closed $68.98, up $1.72, or 2.56%. Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at firstname.lastname@example.org. Follow @howardstutz on Twitter.