Boyd's CEO eyeing national online expansion; says Nevada iGaming legalization could take up to a decade
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Boyd Gaming’s Q1 earnings conference call in April, the company’s CEO, Keith Smith,predicted it could take up to eight more years for Nevada to legalize online casino gaming. However, he made it clear that he believes the activity will expand beyond the six states that currently offer real-money internet versions of slot machines and table games through computers and mobile devices.
“I think it’s inevitable that over the course of time, just like states have adopted online sports betting, online casinos will also be adopted”, Smith told The Nevada Independent.
However, he also warned that online casino legalization will likely not have the same impact as sports betting. “I don’t think it will roll out as quickly. But I do think that you will see it continue to expand over the next five, six to seven years in a lot more states."
He also considered Nevada to be a complicated jurisdiction as it had 446 non-restricted casino gaming licenses as of March. Other states have fewer licenses and are restricted to a limited number of casinos. Pennsylvania, where Boyd operates Valley Forge Casino, has only 15 casinos.
While Smith considers Nevada will have to undergo a long process of “a very careful conversation” - as online gaming legislation needs to protect jobs and the billions of dollars invested into casino operations - he pointed out that online gaming came to stay, according to the cited source.
While casino operators with multi-state presence have the tendency to be more supportive of the legalization of online casinos in Nevada -such asMGM Resorts International, whose CEO Bill Hornbuckle has expressed the state is “missing a significant opportunity for growth”- according toEilers & Krejcik analysts, state’s local gaming operators such as Red Rock Resorts remain skeptical of the vertical diversification.
“Many local operators view online casino legalization as a significant threat to their retail casinos. As such, legislation is unlikely to be seriously considered until the operators reverse course”, the firm wrote in its monthly U.S. Online Casino Tracker.
Boyd Gaming operates online casinos in Pennsylvania and New Jersey, in partnership with sports betting and online gaming giant FanDuel. But Boyd itself has plans to move forward with a national iGaming presence.
In March, the company announced it was buying Toronto-based Pala interactive for $170 million, which provides technology for real money online gaming and free-play social gaming to companies in eight states and Canada.
“With our geographic distribution, strong loyalty program and significant database, we are confident in our ability to build a profitable regional online casino business”, Smith said during the conference call. The sale is expected to close in early 2023.
Boyd owns 5% of FanDuel, which is considered one of the top three sports betting and online gaming operators in the U.S. In 2021, Boyd said cash flow from its digital operations was $24 million, a figure Smith said was expected to increase in 2022.
During the first quarter of 2022, according to Eilers & Krejcik, FanDuel produced an estimated $215.1 million in online casino gaming revenue.
None of the other states where Boyd has regional casinos -including Louisiana, Illinois, Ohio, Missouri, Mississippi, Kansas, Iowa and Indiana- have legalized online gaming. However, the idea has been discussed by Indiana lawmakers over the last two legislative sessions.
In Downtown Las Vegas, the company announced during the Q1 2022 earnings call that its Fremont Hotel & Casinois expanding its casino floor and replacing its former buffet with a new dining hall concept.
