Observers hoping Boyd Gaming’s fourth-quarter results would help extrapolate the financial influence Circa Casino Resort has had on downtown Las Vegas’ gaming market didn’t find any answers.
Boyd’s total revenues from two of its three downtown Las Vegas properties – Main Street Station has been closed since March – declined 74% to $18.2 million for the last three months of the year.
For all of 2020, the company’s downtown gaming revenues declined 63% to $257.7 million.
Boyd Gaming CEO Keith Smith
As CEO Keith Smith put it, Circa, which drew nationwide attention from its two-tiered opening in October and December, wasn’t a factor. The blame for Boyd’s downtown numbers is due solely to the lack of Hawaiian business steered away by the ongoing pandemic.
Downtown is often called Hawaii’s ninth island, because of its reliance on customers from the 50th state.
Casinos throughout Nevada were closed for 78 days and operations have been limited since June by COVID-19 health, safety, and cleaning protocols and capacity restrictions. Overall, visitation citywide – the Strip and downtown – fell 55.2% to 19 million in 2020. The Las Vegas Convention and Visitors Authority estimates roughly 50% of all visitors spend some time at downtown casinos.
“We need the overall visitation to Las Vegas to recover,” Smith said Tuesday during Boyd’s fourth-quarter conference call. He termed it the “first driver” of visitation for the California, Fremont, and Main Street Station hotel-casinos.
The “second driver” is the Hawaiian market. Boyd runs an airline charter service from Hawaii, which is not operating and will probably remain grounded for several more months. He said Hawaii has been on a “pretty tight lockdown,” which he doesn’t see changing soon.
“I think the rebound in Hawaii business will be (in the) second half of the year, and the rebound in general visitation to Las Vegas is also (in the) second half of the year,” Smith said. “The cadence of that is unknown, but I don’t see much of a change in the trajectory of that business over the next three to six months.”
It’s for that reason Main Street Station remains closed.
Shutterstock/The Fremont Street Experience in downtown Las Vegas
In an interview following the conference call, Smith said the company’s two operating downtown casinos “held their own” in the wake of Circa’s opening. He suggested Circa gathered roughly “18% to 20%” of the market during the quarter.
However, with the National Finals Rodeo missing, the New Year’s Eve celebration scaled back, and properties operating at 25% capacity following a renewed COVID-19 surge, the customer base was greatly reduced for all downtown operators.
Circa opened its casino, restaurants, and public areas on Oct. 28. The property’s 512 hotel rooms and the 60th-floor rooftop Legacy Club – an 8,400-square-foot indoor-outdoor cocktail lounge that offers expansive views of the Las Vegas Valley – opened just before New Year’s.
Circa changed the skyline of Fremont Street and downtown Las Vegas.
Owner Derek Stevens marketed the resort nationally through a television advertising campaign during last fall’s Major League Baseball playoffs.
Downtown gaming revenues plunged 32.2% in 2020 to $464.2 million, which was directly attributable to the pandemic. In 2019, downtown gaming revenue of $684.9 million was the market’s highest single-year total since 1994 and the third largest of all time. The 2020 figure was the lowest number since the state began reporting monthly and annual gaming revenue totals in the early 1980s.
Smith said downtown, which also draws business from the Las Vegas locals segment, is considered a destination market, because of its reliance on Southern Nevada tourism.
Boyd operates 28 casinos in 10 states. Smith said the recovery of the company’s nationwide business is tied to several factors, including the rollout of the COVID-19 vaccine and how quickly customers once again get comfortable in visiting gaming establishments. The constant news surrounding the pandemic has a “psychological impact on people” in all of the company’s operating markets.
“Those are the key things as we think about (in) 2021,” Smith added.
In the meantime, Truist Securities gaming analyst Barry Jonas noted Boyd’s nationwide sports betting effort with FanDuel is “making money” and the company saw positive business trends during January.
“As the industry re-images toward leaner operating structures with a focus on high-worth gamblers, we believe Boyd appears well-positioned,” Jonas said.
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgaming.com. Follow @howardstutz on Twitter.
