Each week, CasinoBeats breaks down the numbers behind some of the industry’s most interesting stories. This week glances back to contrasting financial results, Japanese integrated resort progression and a duo of fines in Pennsylvania.
$1.1bn
Wyomissing, Pennsylvania, headquartered casino and racetrack operator Penn National Gaming is lauding strong M&A and expansion efforts, as it reports increases across the board in its latest set of financial figures.
Reporting on the three months and full year ending December 31, 2018, net revenues came in at $1.1bn (2017: $769m) and $3.5bn (2017: $3.1bn) respectively, primarily driven by the company’s acquisition of Pinnacle Entertainment last year.
Operating income for the quarter stands at $124.3m (2017: $26.7m), with a net loss of $42.0 million, driven largely by one-time transaction costs associated with the Pinnacle purchase, with its FY figure standing at $634m (2017: $445.7m).
Penn National’s adjusted EBITDAR finished at $323.9m for Q4, driven by a $113.0m contribution from the Pinnacle acquisition and growth of $11.8 million, or 5.9 per cent, in the company’s same-store portfolio of properties, for the whole of 2018 this is boosted to a fraction over the $1bn barrier (2017: $879.1m)
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Plans that are to see a maximum of three integrated resorts be developed within Japan are proceeding, with the country’s government introducing its IR Development and Promotion Ordinance.
Covering a range of requirements, it’s to serve as a platform for development plans constructed by municipalities in the race to win one of the exclusive IR licenses.
The initial ordinance draft is created based upon basic concepts summarised by the government IR Promotional Council in December, and amongst the stipulations set is one that states total floor space of any hotels within IRs must exceed 100,000 square meters.
Created based upon a calculation taking into consideration the total number of guest rooms and minimum guest room floor space, percentage of suites and other factors, “The total floor space of all guest rooms must substantially exceed 100,000 square meters.”
Further details state that “The total capacity of the largest international conference room must be significantly more than 1,000 people, and the total capacity for the entire facility must be at least double that of the largest conference room.”
However conference room capacity and exhibition facilities can be combined, with total space having to be between 120,000 and 200,000 square meters.
Maximum gaming floor space remains at 3 per cent of the total floor space of the IR facility.
$272,500
The Pennsylvania Gaming Control Board has levied fines totalling $272,500 against two of the Keystone State’s casino properties, for alcohol tracking implementation issues and table games violations.
Coming as a result of board approvals at its public meeting of consent agreements between the PGCB’s Office of Enforcement Counsel, Mount Airy Casino Resort was penalised $250,000, with Presque Isle Downs and Casino fined $22,500.
Issuing the larger of its two penalties against Mount Airy #1 LLC, operator of the Monroe County based entity, it stemmed from a failure of the casino to implement an alcoholic beverage tracking system in 2017.
This follows the casino testifying in public to the PGCB that it would be installing and training personnel in the system within two weeks of that testimony.
The PGCB also levied a $22,500 fine against Presque Isle Downs Inc, operator of Erie County’s Presque Isle Downs and Casino.
This stemmed from table games violations which, according to a consent agreement, involved two incidents that involved the use of compromised decks, one at a blackjack table and the other at a poker table.
SEK 8.7bn
Svenska Spel’s fourth quarter and full year revenue has been impacted by conversion costs for Sweden’s newly re-regulated online gaming market, as the firm delivered its latest financial report.
Net gaming revenue for the year’s final quarter came in at SEK 2.3bn, a 3.7 per cent reduction, helping to FY figures of SEK 8.7bn, representing a 2.2 per cent drop.
Despite this, in its Q4 and year end report Svenska Spel has seen a positive uptick of net gaming revenue online, increasing 14 and 20 per cent respectively, with sales via mobile phone largely responsible, with a 26 per cent Q4 boost nudging its year long increase to 39 per cent.
Svenska Spel, whose land-based Casino Cosmopol subsidiary is appealing a SEK 8m ($880,00) fine imposed by the renamed regulator Spelinspektionen, also saw operating profit for the quarter fall 3.1 per cent to SEK 1.2bn.
On a full year basis operating profit decreased 3.8 per cent, dipping to SEK 4.5bn from the previous year’s SEK 4.7bn.
Decreasing revenues from VLT’s, which dropped 15 and 20 per cent for Q4 and FY, in addition to non-recurring costs related to the conversion of the group to Sweden’s new gaming market and GDPR, are the primarily issues for the lower earnings, states the organisation.
Costs of conversion during the fourth quarter came in at SEK 78m, whilst for the January to December period that rose to SEK 186m.
