Operator News
US – Monarch Casino Black Hawk on course for 2020 opening
By Phil - 4 November 2019
Reno-based operator Monarch Casino & Resort now expects its Monarch Casino Black Hawk expansion project, including the hotel, expanded casino, restaurants and certain public areas, to be fully open in Colorado in the first quarter of 2020.
The remaining remodelling of some areas of the existing casino is expected to be completed in the second quarter of 2020. The company paid $76m when it acquired Monarch Casino Black Hawk, formerly Riviera Black Hawk Casino, in 2012.
The work includes upgrades to the interior, which were completed in August 2015, and additional work to tie the two buildings together, that will be performed in the fourth quarter of 2019, demolition of the original garage, and upgrades to the exterior of the existing facility to match the design of the master planned expansion. The new 23-story hotel tower will include five lower levels of casino gaming, restaurants, hotel administration offices, and lounges; 495 hotel rooms and suites.
The company anticipates funding the hotel tower and casino expansion, as well as the existing facility exterior upgrades, from a combination of operating cash flow and the amended and restated credit facility.
John Farahi, Co-Chairman and Chief Executive Officer of Monarch, said: “We believe that the quality of the new Monarch Casino Resort Spa Black Hawk will offer a transformational experience for both new and returning guests. We expect the expansion of our Black Hawk property into a true destination resort will position Monarch to generate significant free cash flow growth over the coming years. Importantly, we have been able to fund over half of the spending to-date on the more than $400m Black Hawk project from operating cash flows, leaving our peak leverage levels modest and giving us a solid balance sheet that we believe will provide Monarch future flexibility to pursue additional long-term growth opportunities.”
In its 2019 third quarter, Monarch reported net revenue of $65.6m, an increase of 1.9 per cent from $64.4m in the prior year. Casino and hotel revenues increased two per cent and 7.8 per cent year-over-year, respectively, while food and beverage revenue declined 0.7 per cent. The increase in casino revenue was driven by increased spend per visit, partially offset by an increase in promotional allowances, recognised at the stand alone selling price and recorded as casino contra revenue.
Mr. Farahi said: “Underlying spend and visitation trends at Atlantis Casino Resort remain healthy. The greater Reno market continues to perform as expected, and we are seeing increased spend per visit from many of our player segments. The positive macroeconomic trends in Reno and across Northern Nevada continue to benefit our business at Atlantis, though the increasingly competitive labor market has had an impact on our payroll expenses and EBITDA margin.
“In Colorado, Monarch Casino Black Hawk again performed remarkably well even as the final stages of construction at the property continue to impact the customer experience,” he added. “Net revenue grew in the third quarter and we continued to increase market share, though net income was impacted by ongoing pre-opening expenses and hiring related to the expansion. In the near term, we expect to continue to incur pre-opening expenses, as we prepare to introduce and open what we believe will become Black Hawk’s favourite new destination resort. As our hotel and resort amenities open, we expect to grow the overall market as well as further expand market share, particularly as we begin to execute on what we believe will be an eighteen-month ramp-up period.”
