Century Casinos' Q4 2024: Diverging Views on EBITDA Growth, Capital Strategy, and Market Dynamics

These are the key contradictions discussed in Century Casinos' latest 2024Q4 earnings call, specifically including: EBITDA growth expectations, capital allocation strategy, online gaming strategy, and consumer behavior in Reno:



Financial Performance and Market Trends:
- Century Casinos reported a revenue of $137.8 million for Q4 2024, down 4% from the prior year's fourth quarter.
- Adjusted EBITDAR was $21.1 million, down 17%.
- The decline was attributed to macroeconomic factors such as wallet softness in their markets and a decrease in visitation from low-end consumers due to inflationary pressures.

Caruthersville Casino Expansion:
- The new land-based casino in Caruthersville, Missouri, exhibited strong performance with revenue and EBITDAR up 27% and 32% respectively in the four months since opening.
- The new casino's success is due to its expanded gaming positions and convenient location, attracting more customers from further distances and increasing overall catchment area.

Midwestern Operations and Sports Betting:
- In the Midwest segment, carded revenue showed strong growth of 12%, while uncarded revenue decreased by 30%, resulting in a 7% overall revenue decline.
- The decline in uncarded revenue was influenced by heavy construction impacting uncarded play and the loss of 2/3 of sports betting revenue due to the cessation of operations by two sports betting providers.

Eastern Segment Challenges:
- The East segment, including Mountaineer and Rocky Gap, faced a 7% revenue and 29% EBITDA decline, primarily due to lower-end customers producing significantly less trips compared to the previous year.
- The decline was additionally impacted by gaming revenue losses at Rocky Gap and midweek declines at Mountaineer, reflecting customer behavior and market conditions.