Red Rock anticipates cashless increase as gaming offsets 4Q difficulties

Red Rock anticipates cashless increase as gaming offsets 4Q difficulties

Red Rock Resorts has completed field testing with IGT for cashless gaming at its Red Rock and Green Valley Ranch locations, and the business has also received the required permissions to commence work on its Durango casino resort development. 

Red Rock to roll out more cashless gaming

Red Rock’s executive vice president, chief financial officer, and treasurer, Stephen Cootey, made the remarks during the operator’s most recent earnings call, which coincided with the groundbreaking of the estimated $750 million projects.

In a five-mile radius of the project site, there are no unregulated gambling competitors. They obtained permission to begin building on this project in January, and we have already broken ground.

Construction is anticipated to take between 18 and 24 months. When completed, the project will comprise more than 73,000 square feet of casino space with more than 2,000 slot machines and 46 table games, more than 200 hotel rooms and suites, four full-service food and beverage outlets, a state-of-the-art racing sportsbook, and a resort-style pool. This comes as the group forecasts a 23% revenue rise to $422.4 million in the fourth quarter of 2021 (2020: $343.4 million), with Las Vegas operations increasing by 33% to $420.5 million in the fourth quarter of 2021 (2020: $316.2 million).

However, it should be noted that the 2020 results were impacted by a 79-day state-wide shutdown of all non-essential businesses, including casinos, in an effort to contain the spread of COVID-19, as well as by the restrictions imposed on Red Rock’s own operations, which “followed and continue to do so.”

Net income for the fourth quarter was $200.1 million (2020: 49.6 million) and adjusted EBITDA was $189.7 million (2020: $150.5 million), while full-year net income was $354.8 million (2020: -$174.5 million) and adjusted EBITDA was $741 million (2020: 368.5 million). The group’s fiscal year-end net sales increased 37% to $1.6 billion (2020: $1.2 billion), with the Las Vegas division increasing 49% year over year from $67.7 million to $204.8 million.

“Within the quarter, the government’s mask mandate in the state of Nevada remained in effect,” Cootey stated.

“And we most emphatically felt the effects of it, as well as the increased inflationary pressure on everyday products and services. These variables acted as a counterbalance to the normal fourth-quarter seasonality, resulting in a quarter-over-quarter decrease in visitation. Despite these considerations, we saw an increase in time spent on devices and a significant rise in average spend per visit across our whole portfolio.

Despite these difficulties, the company has remained disciplined and focused on executing our core strategy, which enabled the gaming sectors to deliver record revenue and profitability in the fourth quarter. Additionally, Red Rock announces that it has commenced the process of implementing cashless gaming solutions at its other sites, which it hopes to complete within the next two quarters.

Quotes from the Press Release

“I believe it is early days in terms of cash, correct? Thus, we haven’t even began our major marketing campaign because we wanted to wait until we had a consistent experience across our whole portfolio, where a guest could experience the same cashless transaction technology at Red Rock as they would at Sunset. As a result, when the rollout is complete, we expect to make a stronger push,” Cootey explained.

“In terms of expectation, we anticipate that this will be well-adapted, especially among the younger demographic. We anticipate it will pick up. Eliminating friction on the gaming floor benefits the business in general and accelerates gaming spending. That is, I will conclude.

“As was the case earlier in the pandemic, the mask rule and the current reappearance of the Omicron virus had the most effect on our senior guest segment. In terms of remote registration in general, I believe that should be a no-brainer — after all, you’re removing friction from the business by becoming cashless. And as a result, you anticipate this will aid in our sign-ups.”

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About Lou De Aguila

Lou Ramon Aguila is a contributor for Golden Casino News. He has a degree in BSBA Legal Management with great interest in high-profile legal cases involving sports personalities. An ultimate sports junkie, he covers just about everything in the sporting world with an emphasis on the NBA, NFL, and MLB. In his past time, Lou loves to read manga, watch anime and critique pro-wrestling matches.