Red Rock Resorts, a land-based casino operator, encountered a decline in revenue for the second quarter compared to the previous year, due to reduced performance in its casino sector. Although the Q2 period ending on June 30 displayed a mixture of results, the company managed to register growth in certain segments, with an overall increase in net profit.
Casino Business Revenue Dropped 4% in Q2 2023
Red Rock Resorts, a prominent player in the land-based casino industry, navigated a mixed landscape in the second quarter, with a year-on-year decline in revenue primarily attributed to a dip in its casino business. The period spanning April to June proved to be a time of contrasts for the operator, as it experienced growth in various segments while maintaining an increase in net profit.
During the second quarter, the company’s total revenue reached $461.1 million, marking a modest 1.4% decrease compared to the $422.2 million generated in the same period last year. The decline was notably driven by a 4.0% drop in revenue from the casino segment, amounting to $269.5 million. However, other sectors, including food and beverage as well as rooms, showcased positive year-on-year growth.
Red Rock Resorts’ operations in Las Vegas accounted for the lion’s share of its Q2 revenue, contributing $412.6 million, although this figure reflected a slight decline of 1.8%. The remaining $3.6 million revenue stemmed from corporate and other sources, witnessing a noteworthy increase of 71.4% during the same quarter. Despite the challenges posed by the casino segment’s performance, Red Rock Resorts managed to maintain a balanced financial picture through its diversified revenue streams.
Total Operating Spend During Period Went Down By a Major 18.3%
In the realm of Red Rock Resorts’ Q2 financial performance, there emerged a nuanced narrative amid the backdrop of falling revenue. While the total revenue saw a 1.4% dip to $461.1 million compared to last year, the operator found solace in various encouraging indicators. Operating spend showcased a decline of 18.3% to $289.2 million, primarily attributed to a significant reduction in costs following a $79.0 million asset impairment charge in Q2 of the previous year. This charge-adjusted lens revealed a 5.2% year-on-year increase in operating costs.
The prudent cost management approach served to counterbalance the revenue decrease, leading to a striking 84.3% surge in operating profit, reaching $127.7 million. A joint venture also contributed positively, adding $754,000 to the bottom line. In the financial equation, interest expenses accounted for $44.3 million, which ultimately resulted in a pre-tax profit of $44.3 million, signifying a remarkable rise of 105.7%.
After settling $8.4 million in taxes, Red Rock Resorts achieved a net profit of $74.9 million, demonstrating an impressive increase of 131.2%. When accounting for non-controlling interests amounting to $35.4 million, the net profit stood at $39.5 million, marking a significant leap of $151.6 million. However, it’s worth noting that adjusted EBITDA experienced a 7.2% decline, reaching $175.3 million.
Red Rocks Gained New President in March 2022
Red Rock Resorts, renowned for its opulent casino and hotel destinations in Las Vegas, Nevada, unveiled a strategic leadership shift by appointing Scott Kreeger as the company’s president in March 2022, a transition that took effect immediately.
Kreeger, whose career trajectory is marked by several notable roles, served as the Senior Vice President of Corporate Development at Red Rock Resorts upon his return to the organization in September 2021. His extensive experience also encompasses a role as the Director of Operations Development for new resorts at Galaxy Entertainment Group for a span of four and a half years. Additionally, he held a significant tenure as the President and Chief Operating Officer of SLS Las Vegas, contributing to his profound understanding of the gaming and hospitality landscape.
The tapestry of Kreeger’s career is further enriched by his role as the Chief Operating Officer of Revel Casino Resort, a stint that spanned 18 months. This assignment followed his commendable 12-year tenure as the Senior Vice President of Corporate Operations at Fertitta Entertainment. The elevation of Kreeger to the presidency signifies Red Rock Resorts’ commitment to harnessing talent from within its own ranks, while positioning itself for continued growth and strategic innovation.
Frank Fertitta III, Red Rock chairman and chief executive of Red Rocks, celebrated Kreeger’s storied history at the casino operator, as well as his extensive experience in the industry:
“Scott is the right leader for Red Rock Resorts. Scott’s long history with the company, his knowledge of all aspects of our business and his proven leadership sets the company up for continued and accelerated future growth.”– Frank Fertitta III, Chairman and Chief Executive, Red Rock Resort, Press Release
Silverstein Properties and Greenwood Developing Mega Casino Complex in NYC
Silverstein Properties, a prominent player in the real estate sector, announced a partnership with Greenwood Gaming and Entertainment in July 2023, the operator of Parx Casino in Pennsylvania, to unveil their collaborative proposal for a commercial casino venture in downstate New York. Named ‘Avenir,’ the envisioned casino is slated to occupy a sprawling 1.8 million square feet in the far West Side of Manhattan. Complementing the casino, the expansive project envisions a hotel, a spectrum of entertainment offerings, and a residential complex.
Although comprehensive project details remain under wraps, Silverstein envisions the prospective venture could create around 5,500 permanent jobs, thereby providing a significant economic boost to the locality. Additionally, the development phase is anticipated to generate approximately 4,000 construction-related jobs. With a keen focus on gauging potential environmental ramifications, AKRF, an environmental consulting firm, will undertake an Environmental Impact Study, evaluating the project’s implications on the neighboring community, especially areas like Hell’s Kitchen and Hudson Yards.
To ensure the alignment of the project with the community’s needs and urban dynamics, Silverstein has teamed up with Karp Strategies, a consultancy specializing in urban planning and strategy. This collaborative effort seeks to integrate astute urban planning insights, thereby fortifying the potential positive impact of the Avenir casino endeavor on the cityscape. As the bid for the proposed casino progresses, stakeholders remain watchful for the unfolding prospects of economic revitalization and increased employment opportunities tied to the prospective Avenir casino complex in Manhattan’s core.
Larry A. Silverstein, Chairman of Silverstein Properties, provided context by evoking the current series of noteworthy challenges currently being faced by the City and State:
“Our City and State face a confluence of historic challenges right now. These include a housing crisis, public safety challenges, budget shortfalls, and a commercial real estate market in transition. We need to work with State and local leaders to do everything we can to make New York the best place to live, work, and visit. We’ve done it before, and I am confident we can do it again. I’ve always said you should never bet against New York; This City and State will come back bigger and better than ever before.”– Larry A. Silverstein, Chairman, Silverstein Properties, Press Release
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