Boyd Gaming executives made an effort Thursday to knock down percolating investment community chatter concerning the company buying more casinos.
“We know how to buy properties. I think we've developed a great expertise at it,” Boyd CEO Keith Smith said. “We know how to extract value out of these [casinos] once they're part of our portfolio. We've always been willing to take a hard look at opportunities that arise, and we'll continue to do that.”
The Las Vegas-based company operates 28 casinos in 10 states.
A Los Angeles-based investment firm set off a speculation firestorm in June when it suggested Penn Entertainment sell all or some of its 43 casinos in 20 states. One report had Boyd interested in acquiring M Resort in Henderson, which is operated by Penn.
Boyd’s name surfaced because it’s gone down the acquisition road before.
“We've had a long-standing policy to not comment on rumors or speculation or specific transactions,” Smith said in an interview following the earnings call. “We're just going to stick to that policy.”
In 2018, the company paid $575 million to acquire four casinos — two in Missouri and one each in Ohio and Indiana — to help Penn complete its $2.8 billion purchase of Pinnacle Entertainment.
Smith said Boyd would continue to look at opportunities, but any purchases would depend on the situation.
He acknowledged being surprised when speculation heated up after the company added former investment banker Michael Hartmeier to its board. He had previously handled deals in the lodging, gaming and leisure sectors.
“We built this company pretty successfully over the last 20 years by doing a lot of [mergers and acquisitions],” Smith said. “Mike was not on our board. I don't think we need a board member to do [mergers and acquisitions]. We bought 12 properties in the last 10 years. We know how to do this.”
On the conference call, Boyd announced it was growing its Las Vegas-area portfolio through subtraction. The company expects to begin construction this year on Cadence Crossing Casino, a new casino in Henderson that will eventually replace its aging Jokers Wild Casino on Boulder Highway.
Boyd acquired the property, which has 344 slot machines, in 1993.
Cadence will have a 10,000-square-foot casino with 450 slot machines, several dining options and live entertainment. It will be constructed on a 15-acre site next to Jokers Wild, which will be closed and demolished once the new casino opens in 2026. Employees at Joker’s Wild will transition over to Cadence.
Smith said the casino is adjacent to the Cadence master-planned community, which will have more than 12,000 homes when completed. Currently, 5,200 homes have been built.
“We've been watching that [community] for a long time because it's in our backyard,” Smith said. “While we are starting with a modest investment, the property will be designed for future expansion as Cadence grows.”
The site is large enough for a hotel, additional casino space and more amenities.
Smith didn’t give a cost for developing Cadence but said the company is spending $100 million combined on the casino and expanding the meeting and convention space at Ameristar St. Charles in Missouri, which is also renovating hotel rooms.
Boyd Chief Financial Officer Josh Hirsberg said the company would begin another set of projects once Ameristar and Cadence are completed.
During the quarter that ended June 30, Boyd grew overall revenue by 5.5 percent to $967.5 million. The company’s three downtown casinos combined for a 9 percent revenue increase in the quarter.
Boyd’s Las Vegas casino business outside of downtown saw a 2.5 percent revenue decline. Smith said the Eastside Cannery, which has been closed since March 2020 due to the pandemic, won’t reopen anytime soon. The company’s Sam’s Town Hotel and Casino is next door to the shuttered casino on Boulder Highway.
“There has been no change in our thinking around that market,” Smith said. “We just don't have any further views on when something may happen there.”
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