Having sold the Palms Casino in Las Vegas, Red Rock Resorts has said it is keen to press on with its South Durango Drive casino early next year, a project that has been mooted for two decades.
Stephen Cootey, Executive Vice President, Chief Financial Officer and Treasurer, explained that selling the Palms has paved the way for the South Durango Drive to finally kick-on. He said: “While we are incredibly proud of how we transformed this iconic property, we determined that the sale of the property, the best way to create shareholder value and enables us to emerge from a pandemic on a more accelerated timeline. Going forward, we will continue to focus on and improve operations of our existing portfolio of leading gaining assets in the Las Vegas locals market. With this transaction, we can accelerate the development of our Durango project located in the fast growing and underserved Southwest Las Vegas market, while maintaining a fortress balance sheet.”
Station Casinos CEO Frank Fertitta III said: “We have a great development pipeline in Las Vegas, primarily we’re gaining entitled A-plus location surrounding the Las Vegas Valley in the fastest growing areas of the city. We think Durango is the most prime of all of those development sites. It’s the only non-restricted gaming location on that part of the Beltway within a 5 mile radius. It’s one of the fastest growing areas of the city. We think it’s very, very underserved and we’re currently very focused on the scope of the project and defining that and basically working to make our project, the most efficient project that we have ever built as a company, trying to take everything that we’ve learned along the way. And so we hope to be sharing those details by the next call. We’ll be able to share the timing and the scope of that project, but we would like to be in a position to be in the ground in early 2022.”
Red Rock Resorts saw net revenues were $352.6m for the first quarter of 2021, a decrease of 6.6 per cent, or $24.8m, from $377.4m for the same period of 2020, primarily due to the on-going impacts of the COVID-19 pandemic.
During the first quarter the Company continued to execute on its phased reopening program, and operated its first-to-reopen properties of Red Rock, Green Valley Ranch, Santa Fe Station, Boulder Station, Palace Station and Sunset Station, together with its Wildfire Properties.
Compared to the same period of 2019, net revenues were down 21.1 per cent or $94.4m from net revenue of $447m. Net loss was $106.6m for the first quarter of 2021, an improvement of $71.2m, from a loss of $177.8m for the same period of 2020.
Net revenues from Las Vegas operations were $342.8m for the first quarter of 2021, a decrease of 3.8 per cent, or $13.6m, from $356.5m in the same period of 2020.
Adjusted EBITDA from Las Vegas operations was $160.7m for the first quarter of 2021, an increase of 134.6 per cent, or $92.2m, from $68.5m in the same period of 2020. Compared to the same period of 2019, Adjusted EBITDA is up 19.2 per cent or $25.9m from $134.8m.
Mr. Cootey added: “We continue to see strong visitation from a younger demographic, increased spend per visit, more time spent on device, plus the glowing return of our core customer. These trends were positively impacted by the continued rollout of the COVID-19 vaccination program, easing of capacity restrictions from 25% to 50% on March 15th and federal stimulus money.”
Adjusted EBITDA from Native American operations was $7.6m for the first quarter of 2021, a 56.8 per cent decrease from $17.6m in the same period of 2020 due to the termination of the management contract of Graton Resort and Casino on February 5, 2021.
The company also announced a definitive agreement between its subsidiary Station Casinos LLC and a subsidiary of the San Manuel Band of Mission Indians to sell the Palms Casinos Resort for $650 million in cash, subject to customary adjustments.