Red Rock sees revenue up 37% in full 2021; bets on cashless gaming, new Durango property
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Gaming operator and Station Casinos parent company Red Rock Resorts released on Wednesday its financial results for the fourth quarter of 2021 and the full year ended Dec. 31. During FY21, net revenues were up 37% to $1.6 billion versus 2020, while net income increased to $354.8 million from a net loss of $174.5 million the prior year. Adjusted EBITDA was $741 million, up $372.5 million.
The company also delivered strong results in Q4, with revenues up 23% to $422.4 million from the same period of 2020, and a net income of $200.1 million, an increase of $150.5 million. Adjusted EBITDA was $189.7 million, up 26% versus Q4 2020.
In an earnings call with investors, executives for the company announced Red Rock Resorts has now completed cashless gaming field trials with IGT at its Red Rock and Green Valley Ranch properties. The company has also begun rolling out the solution to its remaining properties, with a targeted launch during the upcoming two quarters.
“We haven’t really begun our big marketing push as we wanted to wait until there’s a seamless experience across our entire portfolio so that a guest can experience the same cashless transaction technology at Red Rock that they would at Sunset,” said Stephen Cootey, CFO. “We expect to do a larger push when we’re completed with the rollout.”
The move is expected to quickly gain a favorable reception and adoption, particularly within the younger demographic. Cashless gaming is also set to “remove friction” from the gaming floor and to accelerate gaming spending.
During the fourth quarter, Red Rock Resorts continued to operate its Red Rock, Green Valley Ranch, Santa Fe Station, Boulder Station, Palace Station and Sunset Station properties, together with its Wildfire Properties, while Texas Station, Fiesta Rancho and Fiesta Henderson remained closed with no reopening date.
The sale of the Palms Casino Resort to California's San Manuel Indian Tribe for $650 million was closed during the quarter, and thus was not factored in the report. The casino now targets a March opening date under its new ownership.
However, while the company is leaving the Palms behind, a new addition is set to join its portfolio going forward. The group has secured permits to begin construction on its $750 million Durango project. Anticipated construction for the venue, which has already broken ground, will take approximately 18 to 24 months.
“When complete, the project will include over 73,000 square feet of casino space with over 2,000 slot machines and 46 table games, over 200 hotel rooms and suite products, four full-service food and beverage outlets, a state-of-the-art racing sportsbook and a resort-style pool,” Cootey described.
Net revenues from Las Vegas operations during the fourth quarter of 2021 were $420.5 million, an increase of 33% from the same period of 2020. An Adjusted EBITDA of $204.8 million was reported for the quarter, up 49%.
In terms of full-year results, net revenues from Las Vegas operations amounted to $1.6 billion in 2021, up 46%, while Adjusted EBITDA for FY21 was $785.9 million, an increase of $450.8 million from 2020.
While most results were highly positive, it must be noted that 2020 financial results were heavily impacted by measures taken amid the Covid-19 pandemic, including mandatory shutdowns. Even though many restrictions have now been lifted, some were still in place during Q4, including a mask mandate, which has adversely affected Red Rock, executives said.
This, along with increased inflationary pressure on goods and services, was “an offset to customary fourth-quarter seasonality,” leading to a reduction in visitation. However, the company still experienced “strong spend per visit” across its portfolio and, despite the headwinds, remains “disciplined and focused” on executing its core strategy.
