Red Rock Resorts' Q4 2024: Unpacking Contradictions in Sports Betting Impact, Renovation Disruptions, and Consumer Sentiment

These are the key contradictions discussed in Red Rock Resorts, Inc.'s latest 2024Q4 earnings call, specifically including: Sports Betting Impact and EBITDA Disruption from Renovations, and Consumer Sentiment Post-Election:



Strong Financial Performance in Las Vegas Operations:
- Red Rock Resorts' Las Vegas operations achieved its highest fourth quarter net revenue and adjusted EBITDA in its history, with net revenue of $492.6 million and adjusted EBITDA of $223.9 million.
- The full-year performance also showed significant growth, with net revenue of $1.9 billion, a 12.6% increase from the prior year, and adjusted EBITDA of $879.4 million, up 7.4%.
- This strong performance was driven by maintaining near record adjusted EBITDA margins, operational discipline, and effective expense management despite seasonal patterns.

Durango Casino Resort's Impact and Growth:
- The Durango Casino Resort contributed to a 16% net of cannibalization return in its first year, with over 85,000 new customers signed up.
- The property's growth was attributed to successful execution of operational improvements, increased visitation, and driving incremental play from existing customers.
- Red Rock Resorts plans to improve the property further with a new phase of development, including a high limit slot area and parking garage, expected to complete in January 2026.

Capital Investments and Strategic Expansion:
- Red Rock Resorts announced capital investments of $375 million to $425 million for 2025, including $285 million to $325 million in investment capital.
- These investments are focused on enhancing amenities, maintaining best-in-class customer service, and reinforcing their strategic growth plans, such as the Durango Casino Resort expansion.

Challenges in Sports Betting and Outlook:
- The sports betting segment experienced an $8 million year-over-year impact due to unfavorable hold in October and December.
- Despite this challenge, the company remains confident in its business prospects, with stability in the core slot and tables business and positive trends in customer engagement and spend per visit across the database.
- Looking ahead, Red Rock Resorts hopes for improved hold outcomes in sports betting and strong financial performance in 2025.