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WV track faults smoking ban, Ohio competition

NEWELL — Net revenue at Mountaineer Casino, Racetrack and Resort dropped by 17.6 percent in the fourth quarter of 2015, compared to the same period the year before, parent company Eldorado Resorts Inc. reported last week.

The Reno, Nev.-based company attributed the continued slide in earnings to new competition in northeast Ohio and the Hancock County smoking ban, which went into effect July 1. The most recent earnings report for Hancock County’s largest employer covers the months of October, November and December.

The smoking pavilion that Mountaineer opened in July 2015 is helping to mitigate some of the impact of the smoking ban, the report said. Mountaineer added 61 slot machines to the smoking pavilion in the fourth quarter, bringing the total to 261.

The competition most on Mountaineer’s radar is the Hollywood Gaming at Mahoning Valley Race Course in Austintown, Ohio, which opened its slot machines in mid-September 2014 and its racetrack in November 2014. Since then, Mountaineer has been cutting back its live racing days – from the statutorily-required 210 to 160 – so as not to conflict with Hollywood Gaming’s schedule.

Eldorado’s fourth-quarter report noted that the company saw revenue gains at all but one of its properties – Mountaineer – and adjusted earnings of more than 10 percent at six out of seven properties.

“Eldorado’s strong fourth-quarter and full-year financial results mark the conclusion of another successful and active year for the company,” CEO Gary Carano said. “The strength across our portfolio in the fourth quarter was broad based.”

According to the Eldorado report, Mountaineer’s net revenues in the fourth quarter dropped from $40.1 million in 2014 to $33 million in 2015. Total net revenue for the year dropped 15.8 percent, from $184.8 million in 2014 to $155.6 million in 2015, the report said. What’s more, Mountaineer’s adjusted earnings in the fourth quarter dropped 48.2 percent, from $5.2 million in 2014 to $2.7million in 2015, the report said.

The report differentiates between cash revenue (net revenue) and adjusted EBITDA (revenue minus expenses). EBITDA stands for earnings before interest, taxes, depreciation and amortization.

“(The year) 2015 was a transformative year for Eldorado,” Carano said, “as we fully integrated MTR Gaming’s operations into the Eldorado portfolio and completed significant enhancements through prudent, return-focused capital allocation at each of our properties.”

In addition to Mountaineer, which was acquired through a merger with MTR Gaming Group Inc. in September 2014, those properties include Scioto Downs near Columbus and Presque Isle Downs & Casino in Erie, Pa.

Eldorado’s seven properties include the recently acquired Silver Legacy Resort Casino and Circus Circus Hotel Casino, both in Reno.

(Huba can be contacted at [email protected])

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