Casino Operators Ready to Report Q2 Earnings, Address Internet Rumors

A rendering of Bellagio’s forthcoming Project Mojave, which promises a whole new level of dining and shopping in an area that currently has no way to make money. (Image: Clark County)

Casino earnings season is upon us, with quarterly financial reports starting this week.  

Quarterly and annual corporate earnings reports serve a few purposes. The information is important for stock analysts, shareholders, and those tracking a company's financial health.

For casino media, these calls offer insights into operations and marketing strategy, with more details than previous press releases provided, and often include plans for the future. They also provide casino operators a chance to clarify news and confirm or deny rumors. 

So going into the Q2 reporting season, here’s some of the buzz we expect them to address. 

MGM Resorts Teases Bellagio Expansion

The MGM Resorts earnings call on July 31 should offer more information on a Bellagio expansion called “Project Mojave.” The initial plans call for more retail, dining, and a bridge connecting Bellagio to The Cosmopolitan. There will also be more rooftop views of the Bellagio fountains.

Various podcasts, blogs, and message boards were quick to uncover architectural drawings from the Clark County website. MGM Resorts has already confirmed that this isn't just an internet rumor. 

Stacy Hamilton, Vice President of Public Relations for MGM Resorts International confirmed the project, telling local media:

“MGM Resorts submitted plans to the county last week for a new luxury retail, restaurant, and entertainment destination adjacent to Bellagio along the Las Vegas Strip.”

This expansion is a reminder that nearly 75% of Vegas Strip casino revenue last year was from non-gaming amenities, according to the Nevada Gaming Control Board. It appears as though this expansion would cater to those visiting Las Vegas to eat, drink, and shop. Curiously, the widely shared renderings have since been taken off the Clark County website, so perhaps we will learn something about these images that someone at least for now would prefer us not to see?

Station Casinos All-In on Durango Expansion

Durango Casino in the southwest area of Las Vegas opened in December to high praise from locals and tourists alike. Business has been brisk and even better than expectations that were high enough for the company to have rough plans for a second phase before opening.

Las Vegas locals and Durango seem to still be in their honeymoon phase, and Station Casinos is ready to keep the fire burning by adding a new tower and more spa and resort. (Image: Travis P Ball/Sipa US)

There’s plenty of room at the property for another hotel tower, more casino space, a spa, and more. 

During Red Rock Resorts' first-quarter earnings call, Vice Chairman Lorenzo Fertitta said:

“We are actively working on plans for an expansion at Durango.”

Last month Red Rock Resorts, the parent company of Station Casinos, asked the Clark County Zoning Commission for permission to build a new parking garage. The commission just approved a request for a “minor modification.”

Expect to hear more about this during the Q2 earnings call slated for July 24.

Boyd Gaming to Acquire Penn Entertainment?

Reuters was first to report that Boyd Gaming was interested in purchasing Penn Entertainment. This would be a big acquisition for Boyd as Penn operates 43 casinos and racetracks in 20 states.

M Resort is ready to build a second tower. (Image: European Sports Photographic Agency)

Boyd currently operates nine casinos in Las Vegas. This deal wouldn’t change that too much. Penn only operates M Resort in Las Vegas. If the deal goes through Boyd will have 10 Las Vegas casinos.

Penn also owns ESPNBet, which isn’t in Las Vegas but is one of the larger online sportsbooks around the country. Additionally, there are casinos in overlapping markets that will have to be dealt with if a deal happens.

Both companies will likely share more information on this potential deal when they report earnings. Boyd’s earnings call is on Thursday, July 25. 

Caesars Selling Las Vegas Assets

Earlier this year, activist investor Carl Icahn purchased a large stake of Caesars shares. These investors look to shake up corporations to uncover new revenue streams and make a big profit when selling their shares down the line.

The Linq Promenade is a prime stretch of real estate along the Las Vegas Strip that could be up for sale. (Image: Ian Dagnall / Alamy)

It appears as though Icahn and other shareholders will look to extract the value the company was planning after Eldorado Resorts merged with Caesars in 2020. The company was touting the sale of at least one Vegas Strip casino until 2022.

Earlier this month the Earnings+More Newsletter noted that Wells Fargo gaming analysts are estimating Caesars could sell The Linq promenade – not the casino-hotel – and other non-essential real estate assets for approximately $2 billion.

If Caesars doesn’t address this during prepared comments on its July 30 earnings call, the analysts will likely ask about any potential sales.