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Golden Entertainment Reports 2020 First Quarter Results

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– Q1 Results Negatively Impacted by Mandated Closure of All Operations in March
– Cash Outlays Significantly Reduced to Preserve Liquidity
– Revolver Fully Drawn in March to Create Over $300 million Cash Position
– Montana Distributed Gaming Operations Reopened May 4th Statewide

Golden Entertainment, Inc.  reported financial results for the first quarter ended March 31, 2020.

Blake Sartini, Chairman and Chief Executive Officer of Golden Entertainment, commented, “The COVID-19 pandemic forced the mandated closure of all our operations beginning in mid-March, and continues to have an unprecedented impact on our business and the gaming and entertainment industry in general. This is reflected in our first quarter financial results, notwithstanding our significant year-over-year growth through February prior to the suspension of our operations. Since the closures, we have focused on supporting our team members, staying connected to our customers, and working to establish appropriate sanitation protocols to offer a safe environment when we are allowed to reopen.

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“In order to preserve the Company’s liquidity and position ourselves to withstand the ongoing interruption to our operations, we reduced our cash operating expenses, deferred all capital expenditures and drew down our $200 million availability under our revolving credit facility. The actions that we have taken since the closure of our operations have positioned Golden Entertainment to withstand the current disruption in our business for the foreseeable future.

“Over the last several years we have executed on a strategic plan to put the Company on a path for long-term growth. This plan included capital investment to renovate and reposition The STRAT, accretive acquisitions that have grown our market share in Laughlin, pursuing new distributed gaming markets, and the introduction of our True Rewards one-card loyalty program. Our current cash position, capital structure with no near-term debt maturities, and diverse operations of wholly-owned casinos and distributed gaming operations across multiple jurisdictions will position Golden Entertainment favorably to achieve long-term success as we are allowed to reopen our properties.

“Finally, I want to extend my deepest sympathies to those whose health or livelihood has been directly affected by COVID-19, as well as acknowledge our great appreciation for all the healthcare providers, first responders and other essential workers whose efforts are keeping our communities safe and healthy.”

Consolidated Results

The Company reported 2020 first quarter revenues of $207.2 million compared to $239.9 million in the first quarter of 2019. Net loss for the first quarter of 2020 was $32.6 million, or a loss of $1.17 per share, compared to a net loss of $8.0 million, or $0.29 per share, in the first quarter of 2019. Adjusted EBITDA was $30.3 million for the first quarter of 2020 compared to $48.4 million for the first quarter of 2019.

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Casinos

Casino revenues were $128.0 million in the first quarter of 2020 compared to $151.4 million in the first quarter of 2019. Casino Adjusted EBITDA was $31.8 million compared to $46.6 million in the first quarter of 2019.

Distributed Gaming

Distributed Gaming revenues for the first quarter of 2020 were $79.0 million compared to $88.4 million in the first quarter of 2019. Distributed Gaming Adjusted EBITDA was $7.1 million compared to $13.5 million in the first quarter of 2019.

Balance Sheet Highlights

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As of March 31, 2020, the Company had cash and cash equivalents of approximately $302 million, including $200 million drawn from the Company’s revolving credit facility on March 16, 2020. Total debt on March 31 was $1.36 billion including the revolver draw.

Capital Expenditures

Capital expenditures in the first quarter of 2020 totaled $18.5 million, including payments of approximately $12 million related to renovations at The STRAT that were completed in December 2019. The total cost of renovations for The STRAT since June 2018 totals approximately $101 million.

 

 

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Gambling in the USA

MGCB to Increase Regulatory Capacity with Additional Staff, Contribute $6M to Compulsive Gambling Prevention Fund

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On Thursday, June 27, the Michigan Legislature reached an agreement on the state’s Fiscal Year 2025 budget which includes $1.9 million of funding earmarked to support the addition of 14 full-time equivalent (FTE) staff positions at the Michigan Gaming Control Board (MGCB). These positions are necessary to support the agency’s internet gaming and sports betting regulatory operations in one of the fastest-growing U.S. gaming markets, expand the MGCB’s regulatory capacity, and enhance protections against illegal activity.

Additionally, the Compulsive Gambling Prevention Fund and its associated programs will receive a $3 million funding increase from the MGCB. This increased allocation of proceeds from internet gaming and sports betting funds will enhance the 24/7 Gambling Disorder Helpline operated by the Michigan Department of Health & Human Services, and support gambling research and education for youth about gambling, as well as existing treatment options to assist those with gambling addiction and related problems.

“I extend my deepest gratitude to Governor Whitmer and the Legislature for their commitment to enhancing the Michigan Gaming Control Board’s operations with their support of additional FTE positions, underscoring their dedication to strengthening the agency and it’s regulatory efforts. Moreover, the MGCB’s increased contribution, from $3 million to $6 million, to the Compulsive Gambling Prevention Fund demonstrates our proactive approach towards responsible gaming. Together, we are safeguarding the integrity of the industry while prioritizing the well-being of Michigan citizens,” MGCB Executive Director Henry Williams said.

The MGCB will use another $3 million in its FY2025 budget to support the continuation of the agency’s “Don’t Regret the Bet” responsible gaming messaging campaign. Launched on March 1, 2023, the campaign provides tips and information to Michigan citizens that can help them play it smart and keep gambling from getting out of hand.

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The bipartisan budget agreement is now headed to Gov. Gretchen Whitmer’s desk for her consideration and signing into law, with funding allocations expected to take effect Oct. 1, the start of the state FY2025 budget calendar year.

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EGR North America Awards 2024

High 5 Casino Wins Social Gaming Operator of the Year for Second Consecutive Year

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High 5 Casino is thrilled to announce its consecutive win as Social Gaming Operator of the Year at the EGR North America Awards 2024. This prestigious award reaffirms High 5 Casino’s exceptional performance and innovation in the social gaming sector.

“We’re honored that High 5 Casino has once again received the Social Gaming Operator award,” said Tony Singer, CEO of High 5 Games. “Beyond our growth in users, it’s the happiness our players find in the H5C community that motivates us to continually improve. Our commitment is to provide players with top-notch casino content, and we’re determined to solidify H5C as the leading social casino brand worldwide.”

An independent panel of judges selected High 5 Casino for its outstanding performance and innovation over the past year. The award recognizes High 5 Casino’s notable commercial success and community-building efforts in the social gaming market.

“The recognition from EGR North America Awards is a testament to our team’s dedication and the support of our players,” added Tony Singer. “We are excited to continue pushing boundaries in social gaming and delivering unforgettable experiences to our community.”

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The winners were announced on June 27 at an awards ceremony held at Midtown Loft & Terrace in New York City. High 5 Casino secured the Social Gaming Operator of the Year award due to its outstanding product quality, revenue growth, and leadership in innovation across product differentiation, marketing, and technology.

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Gambling in the USA

Pennsylvania Skill, Powered by Pace-O-Matic, Congratulates PA Gaming Control Board and Casino Giants on Surpassing 2023 Revenue Numbers

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Pace-O-Matic (POM), creator of Pennsylvania Skill games, has congratulated the Pennsylvania Gaming Control Board (PGCB) which saw an 8.7% increase in gambling revenue in May 2024 over revenue in May 2023.

The funding comes from slot machines, table games, internet gaming, sports wagering, fantasy contests, and video gaming terminals (VGTs). The May revenue total is $520,997,868.

As the PGCB celebrates yet another enormous financial win, small businesses, veterans groups, volunteer fire companies and other fraternal clubs across the state also are pleased with the income they receive from operating legal skill games.

“The increased revenue for casinos and other gambling enterprises under the jurisdiction of the PGCB is good for the commonwealth. These numbers show that there is room in the state for both casinos and small businesses that operate skill games to be successful. There is no competition between the two,” said Mike Barley, spokesman for Pennsylvania Skill.

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Barley questions why casinos, especially Parx Casino, are fighting skill games when they continue to see increased revenues month after month and year after year. He added he is disappointed the giant casino industry wants to destroy family businesses and organizations that count on skill games for supplemental income by seeking to impose a crushing tax rate on the games. Legislation to regulate skill games calls for a 16% tax on skill games while casinos say the tax should be 52%.

“Sadly, $521 million a month is not enough to satisfy the greedy casino industry. Instead, they want to kill small businesses, American Legions, volunteer fire companies, Moose Lodges and other places that count on income from skill games. These locations could never afford to pay the same tax rate that wealthy casinos pay. Casinos know that but they simply don’t care,” Barley added.

Barley explained that POM supports legislation sponsored by Sen. Gene Yaw and Rep. Danilo Burgos that will regulate and tax skill games. There is bipartisan backing for the legislation that will put guardrails around skill game operations and provide $250 million in skill game tax revenue for the state in the first year alone. Gov. Josh Shapiro wants to see skill game tax revenue as part of his 2024-25 state budget. But, Barley added, that revenue is generated only through a reasonable tax on skill games.

Several courts have ruled Pennsylvania Skill games are legal, including a unanimous Commonwealth Court in November. In addition to providing supplemental income to small businesses, the games are manufactured in Williamsport and 92% of the income they generate stays within the local economy or the state.

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