What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-10-31 compared with 2024-08-01 · 175 added, 135 removed, 404 unchanged (43% of the section changed)

14 unchanged sentences

The table below lists the Reportable Segment classification of each of our gaming entertainment properties, which are each also operating segments, that were aggregated based on their similar economic characteristics, types of customers, types of services and products provided, the regulatory environments in which they operate and their management and reporting structure.

The Online segment includes the operating results of Boyd Interactive and our online gaming operations through collaborative arrangements with third parties throughout the United States, both of which are also operating segments.

The Online segment includes the operating results of Boyd Interactive, including the operating results of Resorts Digital Gaming, LLC ("Resorts Digital") upon acquisition on September 1, 2024, and our online gaming operations through collaborative arrangements with third parties throughout the United States, both of which are also operating segments.

To reconcile Reportable Segments information to the condensed consolidated information, the Company has aggregated nonreportable operating segments into a Managed & Other category.

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(2) Property is subject to a master lease agreement with a real estate investment trust.

We also own a travel agency and a captive insurance company that underwrites travel-related insurance, each located in Hawaii.

We also own a travel agency and a captive insurance company, each located in Hawaii.

As our Downtown Las Vegas properties focus their marketing efforts on gaming customers from Hawaii, financial results for these operations are included in our Downtown Las Vegas segment.

Most of our gaming entertainment properties also include hotel, dining, sportsbook, retail and other amenities.

Most of our gaming entertainment properties also include hotel, restaurants, bars, sportsbook, retail and other amenities.

Our main business emphasis is on slot revenues, which highly depends on the number of visits and spending levels of customers at our properties.

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Boyd Rewards, among other benefits, rewards players for their loyalty by entitling them to qualify for promotions and monetary discounts, earn rewards toward gaming and nongaming activities and receive benefits such as vacations and luxury gifts.

Commitment to Corporate Social Responsibility ("CSR")

We fulfill our commitment to CSR through four core pillars:

Corporate Social Responsibility ("CSR")

We seek to fulfill our commitment to CSR initiatives through four core pillars:

Environment, People, Communities and Corporate Governance.

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Gaming revenue measures :

slot handle , which means the dollar amount wagered in slot machines, and table game drop , which means the total amount of cash, including digital funds transferred from the players' cashless "BoydPay" wallet, deposited in table games drop boxes, plus the sum of markers issued at all table games, are measures of volume and/or market share.

slot handle , which means the dollar amount wagered in slot machines, and table game drop , which means the total amount of cash, including digital funds transferred from the players' cashless "BoydPay" wallets, deposited in table games drop boxes, plus the sum of markers issued at all table games, are measures of volume and/or market share.

Slot win and table game hold , which means the amount of wagers on slot machines and table games, respectively, retained by us and recorded as gaming revenues, and represents the difference between customer wagers and customer winnings on slot machines and table games, respectively.

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

2 unchanged sentences

Total Revenues

Total revenues for the three months ended June 30, 2024 increased by $50.6 million, or 5.5% , compared to the prior year comparable period, primarily due to an increase in online revenue of $44.9 million, which was driven by an increase of $40.3 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during the three months ended June 30, 2024 , as compared to the prior year comparable period.

While gaming revenues declined by $9.9 million for the three months ended June 30, 2024, compared to the prior year comparable period, and had the second largest impact on revenues, food & beverage revenues increased by $6.6 million over the same period and helped offset the gaming revenue decline.

Total revenues for the six months ended June 30, 2024 increased by $47.1 million, or 2.5%, compared to the prior year comparable period, primarily due to the following:

(i) an increase in online revenue of $68.2 million, which was driven by an increase of $60.3 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during the six months ended June 30, 2024 , as compared to the prior year comparable period;

Total revenues for the three months ended September 30, 2024 increased by $58.1 million, or 6.4% , compared to the prior year comparable period, primarily due to an increase in online revenue of $51.0 million, which was driven by the following:

(i) an increase of $31.8 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during the three months ended September 30, 2024 , as compared to the prior year comparable period;

(ii) a $13.2 million increase in revenue under our market access agreements;

and (iii) a $6.1 million increase in revenue from Boyd Interactive's operations.

Total revenues for the nine months ended September 30, 2024 increased by $105.2 million, or 3.8%, compared to the prior year comparable period, primarily due to the following:

(i) an increase in online revenue of $119.3 million, which was driven by an increase of $92.0 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during the nine months ended September 30, 2024 , as compared to the prior year comparable period, a $14.9 million increase in revenue under our market access agreements and a $12.4 million increase in revenue from Boyd Interactive's operations;

(ii) an increase in food & beverage revenue of $9.4 million primarily due to an increase in average guest check of 6.4%;

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and (iv) offset by a decrease in gaming revenue of $40.7 million.

The gaming revenue decline was primarily driven by the first quarter, which contributed to $30.2 million of the gaming revenue decline for the first six months of the year.

Further, more than half of the $40.1 million gaming revenue decline through the first six months of the year, or $23.0 million, was related to January as severe winter storms impacted the Midwest & South segment in January.

The gaming revenue decline was primarily driven by the first quarter, which contributed to $30.2 million of the gaming revenue decline for the first nine months of the year.

Further, more than half of the $40.7 million gaming revenue decline, or $23.0 million, was related to January as severe winter storms impacted the Midwest & South segment in January.

In addition, gaming revenues were down from the prior year due to decreased visitation in the current year in our Las Vegas segments as the first quarter of 2023, and January in particular, was strengthened by increased visitation to Las Vegas.

We also saw the competitive pressures from the first quarter driven by a new competitor that opened in our Las Vegas Locals market continue into the second quarter and contribute to the year over year gaming revenue declines.

Excluding impacts in January and competitive pressures in the Las Vegas Locals market, for the remainder of the six months ended June 30, 2024, we saw growth in play from our core customer while the retail customer was relatively flat over the prior year.

We also saw competitive pressures from a new competitor that opened in our Las Vegas Locals market contribute to the year over year gaming revenue declines.

Year over year gaming revenue trends improved in the third quarter of 2024 as the increase in gaming revenue from our new land-based Treasure Chest casino that opened in June 2024 offset the competitive pressures in the Las Vegas Locals market.

Operating Income

Operating income decreased by $16.9 million, or 6.9% , for the three months ended June 30, 2024 , compared to the prior year comparable period, primarily due to the gaming revenue decline of $9.9 million.

While food & beverage revenue growth over the same period helped offset the gaming revenue decline, the significantly lower margin on food & beverage was not able to offset the gaming operating income decline.

In addition, while online revenues grew $44.9 million, $40.3 million of the online revenue growth is due to reimbursements of gaming taxes and other expenses paid on behalf of our online partners that results in zero operating income as an equal amount is recorded as an expense.

Operating income was also unfavorably impacted by $3.9 million in project development expenses related to the opening of the Treasure Chest land-based casino and $1.1 million of demolition costs.

Operating income for the six months ended June 30, 2024 decreased by $82.4 million, or 15.6% , compared to the prior year comparable period, primarily due to the $40.1 million gaming revenue decline, as discussed above.

Operating income increased by $2.1 million, or 1.0% , for the three months ended September 30, 2024 , compared to the prior year comparable period.

W hile online revenues grew $51.0 million, $31.8 million of the online revenue growth is due to reimbursements of gaming taxes and other expenses paid on behalf of our online partners that results in zero operating income as an equal amount is recorded as an expense.

Operating income was unfavorably impacted by an increase in depreciation expense of $5.6 million over the prior year comparable period which is primarily driven by the opening of the new land-based Treasure Chest casino in June 2024.

Operating income was also unfavorably impacted by $11.3 million in project development, preopening and writedowns, primarily related to $8.1 million in asset writedowns and $3.2 million in project development and preopening costs.

Operating income for the nine months ended September 30, 2024 decreased by $80.3 million, or 10.8% , compared to the prior year comparable period, primarily due to the $40.7 million gaming revenue decline, as discussed above.

In addition, while online revenues grew $119.3 million, $92.0 million of the online revenue growth is due to reimbursements of gaming taxes and other expenses paid on behalf of our online partners that results in zero operating income as an equal amount is also recorded as an expense.

Operating income was also unfavorably impacted by:

(i) $4.1 million in project development expenses related to the opening of the Treasure Chest land-based casino;

(i) $10.1 million in project development and preopening costs, of which $4.9 million related to the opening of the Treasure Chest land-based casino;

(ii) $3.0 million of demolition costs;

and (iii) a $6.0 million increase in impairment of assets over the prior year comparable period as the Company recorded an impairment charge of $10.5 million during the six months ended June 30, 2024 related to a gaming license right in the Midwest & South segment, compared to a $4.5 million impairment charge related to goodwill in the Managed & Other category during the six months ended June 30, 2023.

(iii) $9.0 million in asset writedowns and (iv) a $6.0 million increase in impairment of assets over the prior year comparable period as the Company recorded an impairment charge of $10.5 million during the nine months ended September 30, 2024 related to a gaming license right in the Midwest & South segment, compared to a $4.5 million impairment charge related to goodwill in the Managed & Other category during the nine months ended September 30, 2023.

Finally, in the prior year, operating income was favorably impacted by a $20.1 million reduction of the allowance on a note receivable with Wilton Rancheria ("Wilton Note") for development advances over the 10 years prior to the Sky River Casino opening as we evaluated the current expected credit losses after an amendment to Wilton Rancheria’s third-party construction loan in March 2023 that allowed for payments to us to begin in March 2023.

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million for the three months ended

June 30, 2024

, compared to the prior year comparable period, primarily due to an increase in the income tax provision of $33.6 million due to the release of state tax valuation allowances of $35.9 million in the prior year and the $16.9 million decrease in operating income, as discussed above.

September 30, 2024

, compared to the prior year comparable period, primarily due to the following:

(i) $3.9 million increase in interest expense from the prior year comparable period due to

an increase in the weighted average long-term debt balance of $120.6 million;

(ii) $1.2 million interest income decline due to a reduction in interest earned on the Wilton Note during the three months ended

September 30, 2024

, as the principal outstanding under the Wilton Note was fully repaid in the first quarter of 2024;

(iii) $1.0 million increase in the income tax provision;

offset by (iv) an increase in operating income of $2.1 million, as discussed above.

Net income de

creased $120.0

million for the six months ended June 30, 2024

million for the nine months ended September 30, 2024

, compared to the prior year comparable period, primarily due to the $80.3 million decrease in operating income, as discussed above.

In addition, interest income decreased $20.0 million during the six months ended June 30, 2024, due to an adjustment to the expected loss for interest on the Wilton Note that impacted interest income favorably during the six months ended June 30, 2023 and interest earned on the Wilton Note during the six months ended June 30, 2023.

Finally, net income decreased due to a $15.3 million increase in the income tax provision as the six months ended June 30, 2023 benefited from the release of state tax valuation allowances of $35.9 million in the prior year and was offset by the operational performance decline and lower resulting taxes during the six months ended June 30, 2024.

In addition, interest income decreased $21.2 million during the

nine months ended September 30, 2024

, due to an adjustment to the expected loss for interest on the Wilton Note that impacted interest income favorably during the nine months ended September 30, 2023 and interest earned on the Wilton Note during the nine months ended September 30, 2023.

Finally, net income decreased due to a $16.2 million increase in the income tax provision as the nine months ended September 30, 2023 benefited from the release of state tax valuation allowances of $35.9 million in the prior year and was offset by the operational performance decline and lower resulting taxes during the

nine months ended September 30, 2024

Operating Revenues

We derive the majority of our revenues from our gaming operations, which produced approximately

72% of revenues for the three months ended

June 30, 2024 and

2023, respectively, and

70% of revenues for the

six months ended June 30, 2024 and

2023, respectively.

67% of revenues for the three and

nine months ended September 30, 2024 and

71% of revenues for the three and nine months ended September 30,

Online revenues, including reimbursements received from our third-party operators for gaming taxes and other expenses we pay under collaborative arrangements, represent our next most significant revenue source, generating

of revenues for the three months ended

June 30, 2024

September 30, 2024

, respectively, and 14% and 11% of revenues for the

six months ended June 30, 2024 and

nine months ended September 30, 2024 and

2023, respectively.

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

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Gaming revenues are comprised primarily of the net win from our slot machine operations and to a lesser extent from table games win.

The decrease in gaming revenues of $9.9 million, or 1.5% , during the three months ended June 30, 2024 , compared to the prior year comparable period, was primarily due to a decline in table game hold of 5.8%.

The decrease in gaming reven ues of $40.1 million, or 3.0%, during the six months ended June 30, 2024 , compared to the prior year comparable period, was primarily due to declines in slot handle of 1.7%, slot win of 1.1% and table game hold of 5.7%.

Gaming revenues were impacted by winter storms throughout the Midwest & South in January, market softness during the first quarter in our Las Vegas Locals segment, competitive pressures through the first two quarters in the Las Vegas Locals segment after a new competitor entered the market in December 2023, and increased visitation in our Las Vegas segments in the prior year, particularly in the first quarter, all as discussed above.

Gaming revenues were essentially flat at $640.5 million and $641.2 million during the three months ended September 30, 2024 and 2023, respectively.

The decrease in gaming revenues of $40.7 million, or 2.1% , during the nine months ended September 30, 2024 , compared to the prior year comparable period, was primarily due to declines in slot handle of 1.4%, slot win of 0.8% and table game hold of 2.2%.

Gaming revenues were impacted by winter storms throughout the Midwest & South in January, market softness during the first quarter in our Las Vegas Locals segment, competitive pressures through all three quarters in the Las Vegas Locals segment after a new competitor entered the market in December 2023, and increased visitation in our Las Vegas segments in the prior year, particularly in the first quarter, all as discussed above.

Food & Beverage

Food & beverage revenues increased $6.6 million, or 9.4% , and $7.7 million, or 5.4% , during the three and six months ended June 30, 2024 , respectively, compared to the prior year comparable periods, primarily due to an increase in average guest check of 6.0% and 6.1%, respectively.

Room revenues increased $2.8 million, or 5.7% , and $1.7 million, or 1.7%, during the three and six months ended June 30, 2024, compared to the prior year comparable periods, primarily due to an increase in hotel occupancy rate of 2.0% and 0.6%, respectively.

Online reven ues increased $44.9 million and $68.2 million during the three and six months ended June 30, 2024 , respectively, compared to the prior year comparable periods, primarily driven by an increase of $40.3 million and $60.3 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during the three and six months ended June 30, 2024 , respectively, as compared to the prior year comparable periods.

Food & beverage revenues increased $1.7 million, or 2.5% , and $9.4 million, or 4.4% , during the three and nine months ended September 30, 2024 , respectively, compared to the prior year comparable periods, primarily due to an increase in average guest check of 7.0% and 6.4%, respectively, offset by a decline in food covers of 5.9% and 4.7%, respectively.

Room revenues increased $1.5 million, or 3.1% , and $3.2 million, or 2.2%, during the three and nine months ended September 30, 2024, compared to the prior year comparable periods, primarily due to an increase in hotel occupancy rate of 1.7% and 1.0%, respectively.

Online reven ues increased $51.0 million during the three months ended September 30, 2024 , compared to the prior year comparable period, primarily driven by an increase of $31.8 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, a $13.2 million increase in revenue under our market access agreements and a $6.1 million increase in revenue from Boyd Interactive's operations, inclusive of Resorts Digital upon acquisition on September 1, 2024 ("Acquisition").

Online revenues increased $119.3 million, during the nine months ended September 30, 2024, compared to the prior year comparable period, primarily driven by an increase of $92.0 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, a $14.9 million increase in revenue under our market access agreements and a $12.4 million increase in revenue from Boyd Interactive's operations, inclusive of Resorts Digital upon Acquisition.

Management fee

Management fee revenues during the three months ended June 30, 2024 and 2023 of $21.3 million and $17.4 milli on, respectively, and during the six months ended June 30, 2024 and 2023 of $43.5 million and $37.5 million, respectively, relate to our management agreement with Wilton Rancheria to manage the Sky River Casino in northern California.

Management fee revenues during the three months ended September 30, 2024 and 2023 of $21.0 million and $17.2 milli on, respectively, and during the nine months ended September 30, 2024 and 2023 of $64.5 million and $54.6 million, respectively, relate to our management agreement with Wilton Rancheria to manage the Sky River Casino in northern California.

Other revenues relate to patronage visits at the other amenities at our properties, including entertainment and nightclub revenues, retail sales, theater tickets and other venu es.

Other revenues increased $2.3 million , or 6.7%, and $3.5 million, or 5.1%, during the three and six months ended June 30, 2024, respectively, as compared to the corresponding periods of the prior year.

Other revenues increased $0.6 million , or 1.6%, and $4.1 million, or 4.0%, during the three and nine months ended September 30, 2024, respectively, as compared to the corresponding periods of the prior year.

Revenues and Adjusted EBITDAR by Reportable Segment

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

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Las Vegas Locals

Total revenues decreased by $5.9 million, or 2.5% , during the three months ended June 30, 2024 , as compared to the prior year comparable period, due primarily to a $9.1 million decline in gaming revenues.

Total revenues decreased by $10.0 million, or 4.5% , during the three months ended September 30, 2024 , as compared to the prior year comparable period, due primarily to a $9.5 million decline in gaming revenues.

The decrease in gaming revenues was attributable to declines in table game hold of 3.1%, table game drop of 6.0%, slot handle of 6.4% and slot win of 5.0% from the prior year comparable period.

As discussed earlier, the Las Vegas Locals segment was impacted by competitive pressures with a new competitor recently entering the market.

Absent these competitive pressures, the Las Vegas Locals segment performed in-line with the overall market on a same-store basis.

Offsetting the decline in gaming revenues, was an increase in room revenue of $1.4 million, which was driven by an increase in hotel occupancy rate of 2.6%, and an increase in food & beverage revenue of $1.2 million, which was primarily due to an increase in average guest check of 7.3%.

Total revenues decreased by $20.5 million, or 4.4% , during the six months ended June 30, 2024, compared to the prior year comparable period, due primarily to a $23.9 million decline in gaming revenues.

The decrease in gaming revenues was attributable to declines in table game hold of 11.5%, slot handle of 4.4% and slot win of 3.9% from the prior year comparable period.

As discussed earlier, the Las Vegas Locals segment was impacted by competitive pressures with a new competitor recently entering the market and overall market softness in the first quarter.

As discussed earlier, the Las Vegas Locals segment was impacted by competitive pressures with a new competitor entering the market in December 2023.

Absent these competitive pressures that have impacted two of our properties, the rest of the Las Vegas Locals segment performed in-line with the overall same-store market.

Total revenues decreased by $30.5 million, or 4.4% , during the nine months ended September 30, 2024, compared to the prior year comparable period, due primarily to a $33.4 million decline in gaming revenues.

The decrease in gaming revenues was attributable to declines in table game hold of 8.9%, table game drop of 2.3%, slot handle of 5.1% and slot win of 4.3% from the prior year comparable period.

As discussed earlier, the Las Vegas Locals segment was impacted by competitive pressures with a new competitor entering the market in December 2023 and overall market softness in the first quarter.

Offsetting the decline in gaming revenues, was an increase in room revenue of $2.2 million, which was driven by an increase in hotel occupancy rate of 1.7%.

Adjusted EBITDAR decreased by

million, or 7.7%, and $24.9

million, or 10.2%, during the three and six months ended June 30, 2024

, as compared to the prior year comparable period, due primarily to the gaming revenues decline discussed above.

Adjusted EBITDAR decreased by $9.6 million, or 9.0%, and $34.4 million, or 9.8%, during the three and nine months ended September 30, 2024 , as compared to the prior year comparable period, due primarily to the gaming revenues decline discussed above.

Downtown Las Vegas

Total revenues increased by $4.7 million, or 8.9%, during the three months ended June 30, 2024 , as compared to the prior year comparable period, reflecting revenue increases in all departmental categories.

Gaming revenues increased $2.3 million primarily due to increases in table game drop of 17.4%, slot win of 10.3% and slot handle of 7.3%.

In addition, room revenue increased $1.3 million, which was driven by a 7.6% increase in occupied rooms by the Hawaiian customer.

As airfares normalized from the elevated levels that occurred in the first quarter, Hawaiian visitation recovered in the second quarter.

Total revenues increased by $3.8 million, or 7.6%, during the three months ended September 30, 2024 , as compared to the prior year comparable period, reflecting revenue increases in all departmental categories.

Gaming revenues increased $1.7 million primarily due to increases in table game hold of 2.2%, table game drop of 14.1%, slot win of 8.3% and slot handle of 8.2%.

Food & beverage revenue increased $0.7 million as average guest check increased 4.0%.

In addition, room revenue increased $1.0 million, which was driven by an 11.5% increase in rooms occupied by the Hawaiian customer.

We continue to tailor our marketing programs in the Downtown Las Vegas segment to focus on the Hawaiian market.

Total revenues increased by

million, or 1.5%, during the six months ended June 30, 2024, compared to the prior year comparable period, reflecting revenue increases in all departmental categories, except for gaming revenues which declined by $0.4 million.

nine months ended September 30, 2024

, compared to the prior year comparable period, reflecting revenue increases in all departmental categories.

Room revenues increased $2.0 million as the hotel occupancy rate increased 8.3% and food & beverage revenues increased $1.6 million as average guest check increased 4.1%.

In addition, gaming revenues increased $1.3 million primarily due to increases in table game drop of 12.3%, slot win of 4.5% and slot handle of 3.2%.

These increases were primarily attributable to our recently completed renovation and expansion at the Fremont Hotel & Casino and the hotel remodel at Main Street Station Hotel and Casino.

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, during the three months ended

June 30, 2024

, as compared to the prior year comparable period, primarily due to the revenue increase discussed above as the segment benefited from our recent property investments and Hawaiian visitation recovery, both as discussed above.

September 30, 2024

, as compared to the prior year comparable period, primarily due to the revenue increase discussed above as the segment benefited from our recent property investments and growth in Hawaiian visitation, both as discussed above.

Adjusted EBITDAR decreased by

six months ended June 30, 2024

, compared to the prior year comparable period, primarily due to wage increases as we completed our efforts in 2023 to increase the hourly minimum rate to $15 per hour for all non-tipped, non-represented positions in the prior year and also property insurance cost increases.

nine months ended September 30, 2024

Midwest & South

Total revenues increased by $2.9 million, or 0.6% , during the three months ended June 30, 2024 , as compared to the corresponding period of the prior year, due primarily to a $4.5 million increase in food & beverage revenue, which was driven by a 6.3% increase in average guest check.

Offsetting the increase in food & beverage revenue, is a $3.1 million decline in gaming revenues, which was primarily due to a decline in table game hold of 3.8%.

Total revenues decreased by $8.5 million, or 0.8% , during the six months ended June 30, 2024 , compared to the prior year comparable period, primarily due to a $15.0 million decline in gaming revenues.

The gaming revenues decline is primarily driven by the severe winter storms across the segment in the first quarter of 2024, specifically January.

Offsetting the gaming revenue decline, is a food & beverage revenue increase of $6.0 million, which is driven by a 6.2% increase in average guest check.

Adjusted EBITDA R decreased by $6.4 million, or 3.2% , during the three months ended June 30, 2024 , as compared to the corresponding prior year period, due primarily to continued cost pressures and specifically an increase in property insurance and wages, as we completed our efforts in 2023 to increase the hourly minimum rate to $15 per hour for all non-tipped, non-represented positions throughout the prior year.

Adjusted EBITDAR decreased by $24.1 million, or 6.0% , during the six months ended June 30, 2024 , compared to the prior year comparable period, primarily due to the gaming revenues decline, as discussed above, as well as property insurance and wage increases as we increased the minimum wage in the prior year, as discussed above.

Online reven ues increased $44.9 million and $68.2 million during the three and six months ended June 30, 2024 , respectively, as compared to the prior year comparable periods, primarily driven by an increase of $40.3 million and $60.3 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, during the three and six months ended June 30, 2024 , respectively, as compared to the prior year comparable periods.

Adjusted EBITDAR increased $3.7 million and $3.5 million during the three and six months ended June 30, 2024 , respectively, as compared to the corresponding periods of the prior year, due primarily to continued growth in revenues under our market access agreements, particularly in Pennsylvania.

As discussed earlier, there is an equal amount of expense recorded for the revenue recorded related to the reimbursement of gaming taxes and other expenses, thus resulting in no impact to EBITDAR.

Managed & Ot her

three and six months ended June 30, 2024

Total revenues increased by $9.4 million, or 1.8% , during the three months ended September 30, 2024 , as compared to the corresponding period of the prior year, reflecting revenue increases in all departmental categories.

Gaming revenues increased $7.2 million primarily due to increases in table game hold of 9.5%.

Food & beverage revenue increased $1.9 million, which was driven by a 9.7% increase in average guest check, offset by a 7.1% decrease in food covers.

These increases were driven by a record third quarter performance at Treasure Chest, which opened its new land-based casino in June 2024.

Total revenues increased by $0.9 million, or 0.1% , during the nine months ended September 30, 2024 , compared to the prior year comparable period, primarily due to a $7.9 million increase in food & beverage revenues.

The increase in food & beverage revenues was primarily attributable to a 7.4% increase in average guest check.

Offsetting the food & beverage revenue increase, was a gaming revenue decrease of $7.8 million, which was primarily driven by the severe winter storms across the segment in the first quarter of 2024, specifically January.

Adjusted EBITDA R increased by $6.3 million, or 3.3% , during the three months ended September 30, 2024 , as compared to the corresponding prior year period, primarily due to the gaming revenue increase discussed above.

Adjusted EBITDAR decreased by $17.8 million, or 3.0% , during the nine months ended September 30, 2024 , compared to the prior year comparable period, primarily due to gaming revenue declines, property insurance increases and wage increases as we increased the minimum wage in the prior year, all as discussed above.

Online revenue increased $51.0 million during the three months ended September 30, 2024 , compared to the prior year comparable period, primarily driven by an increase of $31.8 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, a $13.2 million increase in revenue under our market access agreements and a $6.1 million increase in revenue from Boyd Interactive's operations, inclusive of Resorts Digital upon Acquisition.

Online revenues increased $119.3 million, during the nine months ended September 30, 2024 , compared to the prior year comparable period, primarily driven by an increase of $92.0 million in reimbursements of gaming taxes and other expenses paid on behalf of our online partners, a $14.9 million increase in revenue under our market access agreements and a $12.4 million increase in revenue from Boyd Interactive's operations, inclusive of Resorts Digital upon Acquisition.

Adjusted EBITDAR increased $15.0 million and $18.5 million during the three and nine months ended September 30, 2024 , respectively, as compared to the corresponding periods of the prior year, due primarily to revenues under our market access agreements and continued growth from Boyd Interactive.

We received non-recurring market access fees of $10.0 million during the third quarter of 2024 that contributed to the year over year Adjusted EBITDAR growth.

As discussed earlier, there is an equal amount of expense recorded for the revenue recorded related to the reimbursement of gaming taxes and other expenses, thus resulting in no impact to Adjusted EBITDAR.

Managed & Other

three and nine months ended September 30, 2024

, total revenues increased by

million, respectively, and Adjusted EBITDAR increased by

million, respectively, as compared to the corresponding period of the prior year, primarily due to a $3.8 million and $6.0 million increase in Sky River Casino management fees for the

three and six months ended June 30, 2024

, respectively, co mpared to the prior year comparable periods.

million, respectively, as compared to the corresponding periods of the prior year, primarily due to a $3.9 million and $9.9 million increase in Sky River Casino management fees for the

three and nine months ended September 30, 2024

, respectively, compared to the prior year comparable periods.

Other Operating Costs and Expenses

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

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11.1% during the

three months ended June 30, 2024 and 2023, respectively, and

three months ended September 30, 2024 and 2023, respectively, and

10.8% during the

six months ended June 30, 2024

nine months ended September 30, 2024

, respectively.

While we continue to focus on our disciplined operating model and targeted marketing approach, selling, general and administrative expenses were impacted by increased wages and property insurance costs during the three and six months ended

June 30, 2024

The decline in selling, g eneral and administrative expens

as a p ercentage of revenues, for the three months ended September 30, 2024, compared to the prior year comparable period is primarily driven by an increase in revenues as selling, general and administrative expenses remained relatively flat at $102.4 million and $99.9 million for the three months ended September 30, 2024 and 2023, respectively.

While we continue to focus on our disciplined operating model and targeted marketing approach, and selling, general and administrative expenses as a percentage of revenues was consistent year over year, selling, general and administrative expenses were impacted by increased wages and property insurance costs during the nine months ended September 30, 2024.

Master Lease Rent Expense

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lease rent expense remained generally flat period over period at $28.2 million and $27.2 million during the

three months ended June 30, 2024 and 2023, respectively, and

three months ended September 30, 2024 and 2023, respectively, and

$83.2 million and

$81.2 million during the

six months ended June 30, 2024 and

nine months ended September 30, 2024 and

2023, respectively.

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Maintenance and utilities expenses, as a percentage of re

venues, remained generally consistent at

4.6% during the

three months ended June 30, 2024 and 2023, respectively, and

three months ended September 30, 2024 and 2023, respectively, and

4.1% during the

six months ended June 30, 2024 and

nine months ended September 30, 2024 and

2023, respectively.

The decline in maintenance and utilities expenses, as a percentage of re

venues, for both periods presented was primarily driven by an increase in revenues.

Depreciation and Amortization

Depreciation and amortization expenses, as a percentage of revenues, remained generally consistent at 6.8% during both the

three months ended June 30, 2024 and 2023

, and 6.7% and 6.6% during the six months ended June 30, 2024 and

Depreciation and amortization expenses, as a percentage of revenues, remained generally consistent at 7.3% and 7.2% during the

three months ended September 30, 2024 and 2023

, respectively, and 6.9% and 6.8% during the nine months ended September 30, 2024 and

, respectively.

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of revenues during the

three months ended June 30, 2024 and 2023

, respectively, and 3.1% and 3.2% of revenues during the six months ended June 30, 2024 and

three months ended September 30, 2024 and 2023

, respectively, and 3.1% and 3.2% of revenues during the nine months ended September 30, 2024 and

, respectively.

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Project development, preopening and writedowns represent:

(i) certain costs incurred and recoveries realized related to the activities associated with various acquisition opportunities, strategic initiatives, dispositions and other business development activities in the ordinary course of business;

(i) certain costs incurred and recoveries realized related to the activities associated with various acquisition opportunities, stra

tegic initiatives, dispositions and other business development activities in the ordinary course of business;

(ii) certain costs of start-up activities that are expensed as incurred in our ongoing efforts to develop gaming activities in new jurisdictions and expenses related to other new business development activities that do not qualify as capital costs;

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and (iv) realized gains arising from asset dispositions.

Such costs are

generally nonrecurring in nature and vary from period to period as the volume of underlying activities fluctuates.

Such costs are generally nonrecurring in nature and vary from period to period as the volume of underlying activities fluctuates.

During the three months ended

June 30, 2024

, the Company incurred $5.9 million in project development and preopening cost, primarily related to the opening of the Treasure Chest land-based casino, and $1.1 million in demolition costs.

September 30, 2024

, the Company incurred $8.1 million in asset writedowns and $3.2 million in project development and preopening cost.

During the three months ended

June 30, 2023

September 30, 2023

, the Company incurred $2.6 million related to preopening costs.

six months ended June 30, 2024

, the Company incurred $6.9 million in project development and preopening costs, primarily related to the opening of the Treasure Chest land-based casino, and $3.0 million in demolition costs.

six months ended June 30, 2023

nine months ended September 30, 2024

, the Company incurred $10.1 million in project development and preopening costs, primarily related to the opening of the Treasure Chest land-based casino, $9.0 million in asset writedowns and $3.0 million in demolition costs.

nine months ended September 30, 2023

, the Company benefited from a $20.1 million reduction of the allowance on the Wilton Note for development advances over the 10 years prior to Sky River Casino opening offset by preopening costs of $7.6 million.

Impairment of Assets

During the six months ended June 30, 2024 , as a result of our first quarter impairment review, the Company recorded an impairment charge of $10.5 million for a gaming license right related to our Midwest & South segment.

During the six months ended June 30, 2023, as a result of our first quarter impairment review, the Company recorded an impairment charge of $4.5 million for goodwill related to our Managed & Other category.

During the nine months ended September 30, 2024 , as a result of our first quarter impairment review, the Company recorded an impairment charge of $10.5 million for a gaming license right related to our Midwest & South segment.

During the nine months ended September 30, 2023, as a result of our first quarter impairment review, the Company recorded an impairment charge of $4.5 million for goodwill related to our Managed & Other category.

Other Operating Items, net

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

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(1) Average debt balance calculation does not include the related discounts or deferred finance charges.

Interest expense, net of capitalized interest a nd interest income, for the three months ended June 30, 2024 , increased $2.5 million, or 6.4% , from the prior year comparable period primarily due to a $2.3 million interest income decline due to a reduction in interest earned on the Wilton Note during the three months ended June 30, 2024 , as the principal outstanding under the Wilton Note was fully repaid in the first quarter of 2024.

Interest expense, net of capitalized interest and interest income for the six months ended June 30, 2024 , increased $18.7 million, or 28.4% , from the prior year comparable period primarily due to a $20.0 million interest income decline driven by a reduction of the allowance for the expected loss for interest on the Wilton Note and interest earned on such note during the six months ended June 30, 2023 .

Interest expense, net of capitalized interest and interest income, for the three months ended September 30, 2024 , increased $5.0 million, or 12.4% , from the prior year comparable period primarily due to a $3.9 million increase in interest expense, which was attributable to an increase in the weighted average long-term debt balance of $120.6 million.

In addition, interest income declined $1.2 million due to a reduction in interest earned on the Wilton Note during the three months ended September 30, 2024 , as the principal outstanding under the Wilton Note was fully repaid in the first quarter of 2024.

Interest expense, net of capitalized interest and interest income for the nine months ended September 30, 2024 , increased $23.7 million, or 22.3% , from the prior year comparable period primarily due to a $21.2 million interest income decline driven by a reduction of the allowance for the expected loss for interest on the Wilton Note and interest earned on such note during the nine months ended September 30, 2023 .

With the full repayment of outstanding principal under the Wilton Note during the first quarter of 2024, interest earnings related to the Wilton Note were minimal in the current year.

The effective tax rates during the six months ended June 30, 2024 and 2023 were 23.7% and 15.2%, respectively.

Our tax rate for the six months ended June 30, 2024 , was unfavorably impacted by state taxes, nondeductible expenses, including nondeductible compensation and employee benefit expenses, which were partially offset by excess tax benefits and tax credits.

Our tax rate for the six months ended June 30, 2023 , was favorably impacted by a $35.9 million release of state valuation allowances, the inclusion of excess tax benefits which were partially offset by the unfavorable impact of state taxes and certain nondeductible expenses, as a component of the provision for income taxes.

The effective tax rates during the nine months ended September 30, 2024 and 2023 were 24.0% and 17.6%, respectively.

Our tax rate for the nine months ended September 30, 2024 , was unfavorably impacted by state taxes, nondeductible expenses, including nondeductible compensation and employee benefit expenses, which were partially offset by excess tax benefits and tax credits.

Our tax rate for the nine months ended September 30, 2023 , was favorably impacted by a second quarter 2023 release of state valuation allowances and the inclusion of excess tax benefits which were partially offset by the unfavorable impact of state taxes and certain nondeductible expenses, as a component of the provision for income taxes.

The Internal Revenue Service ("IRS") has selected our federal corporate income tax return for the tax year ended December 31, 2021, for examination.

The IRS examination began in the second quarter of 2024 and is early in the process.

As of June 30, 2024, and for the three and six months then ended, there were no changes to our unrecognized tax benefits to date.

As of September 30, 2024, and for the three and nine months then ended, there were no changes to our unrecognized tax benefits to date.

LIQUIDITY AND CAPITAL RESOURCES

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We generally operate with minimal or negative levels of working capital in order to minimize borrowings and related interest costs.

At June 30, 2024 and December 31, 2023, we had balances of cash and cash equivalents of $280.8 million and $304.3 million, respectively.

In addition, we held restricted cash balances of $3.9 million and $3.7 million at June 30, 2024 and December 31, 2023, respectively.

Our working capital deficit at June 30, 2024 and December 31, 2023, wa s $102.0 million and $67.0 million, respectively.

At September 30, 2024 and December 31, 2023, we had balances of cash and cash equivalents of $286.3 million and $304.3 million, respectively.

In addition, we held restricted cash balances of $3.9 million and $3.7 million at September 30, 2024 and December 31, 2023, respectively.

Our working capital deficit at September 30, 2024 and December 31, 2023, wa s $108.7 million and $67.0 million, respectively.

We believe that current cash balances together with the available borrowing capacity under our Revolving Credit Facility (as defined in " Indebtedness " below) and cash flows from operating activities will be sufficient to meet our liquidity and capital resource needs for the next twelve months, including our projected operating requirements and maintenance capital expenditures.

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Cash Flows Summary

Six Months Ended

Nine Months Ended

September 30,

(In millions)

3 unchanged sentences

Payments received on note receivable

Cash paid for acquisition, net of cash received

Other investing activities

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Cash Flows from Operating Activities

During the six months ended June 30, 2024 and 2023 , we generated consistent operating cash flows of $463.8 million and $463.3 million, respectively.

During the nine months ended September 30, 2024 and 2023 , we generated consistent operating cash flows of $695.0 million and $697.3 million, respectively.

Cash Flows from Investing Activities

Our industry is capital intensive and we use cash flows for acquisitions, facility expansions, investments in future development or business opportunities and maintenance capital expenditures.

During the six months ended June 30, 2024 , we incurred net cash outflows for investing activities of $205.5 million comprised of capital expenditures of $204.0 million, primarily related to our Treasure Chest land-based casino project, various guest room remodels, slot machines, IT equipment and building projects at various properties.

During the six months ended June 30, 2023 , we incurred net cash outflows for investing activities of $124.0 million comprised of capital expenditures of $171.4 million, primarily related to our Treasure Chest land-based casino project, Fremont food hall, slot floor expansion and renovation, various guest room remodels, slot machines, IT equipment and building projects at various properties, offset by $49.7 million in payments received related to the outstanding principal on the Wilton Note.

Our industry is capital intensive and we use cash flows for acquisitions, facility expansions, investments in future development or business opportunit ies and maintenance capital expenditures.

During the nine months ended September 30, 2024 , we incurred net cash outflows for investing activities of $320.5 million comprised of capital expenditures of $289.2 million, primarily related to our Treasure Chest land-based casino project, various guest room remodels, slot machines, IT equipment and building projects at various properties.

Investing cash outflow was also impacted by net cash paid of $28.8 million related to the acquisition of Resorts Digital.

During the nine months ended September 30, 2023 , we incurred net cash outflows for investing activities of $199.6 million comprised of capital expenditures of $279.0 million, primarily related to our Treasure Chest land-based casino project, Fremont food hall and slot floor expansion and renovation, various guest room remodels, IT equipment and building projects at various properties, offset by $82.4 million in payments received related to the outstanding principal on the Wilton Note.

Cash Flows from Financing Activities

We rely on our financing cash flows to provide funding for investment opportunities, repayments of obligations, returning capital to shareholders and ongoing operations.

The net cash outflows from financing activities during the six months ended June 30, 2024 and 2023 , primarily reflect share repurchases, net payments on the outstanding principal under our Credit Facility or incremental borrowings under our Credit Facility, share-based compensation and dividends paid.

During the second quarter of 2024, we increased borrowings under the Credit Facility as we increased our share repurchase activity during the same period, resulting in net borrowings under the Credit Facility for the six months ended June 30, 2024.

The net cash outflows from financing activities during the nine months ended September 30, 2024 and 2023 , primarily reflect share repurchases, net payments on the outstanding principal under our Credit Facility or incremental borrowings under our Credit Facility, share-based compensation and dividends paid.

During the second and third quarters of 2024, we increased borrowings under the Credit Facility as we increased our share repurchase activity during the same periods, resulting in net borrowings under the Credit Facility for the nine months ended September 30, 2024 .

The outstanding principal balances of long-term debt, before unamortized discounts and fees, and the changes in those balances are as follows:

(In millions)

June 30, 2024

September 30, 2024

December 31, 2023

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The outstanding principal amounts under the Credit Facility are comprised of the following:

September 30,

(In millions)

1 unchanged sentence

Total outstanding principal amounts

With a total revolving credit commitment of $1,450.0 million available under the Credit Facility, $255.0 million and $51.6 million in borrowings outstanding on the Revolving Credit Facility and the Swing Loan, respectively, and $13.4 million allocated to support various letters of credit, there was a remaining contractual availability under the Credit Facility of $1,130.0 million as of June 30, 2024.

The blended interest rate for outstanding borrowings under the Credit Facility was 7.2% at both June 30, 2024 and December 31, 2023, respectively.

With a total revolving credit commitment of $1,450.0 million available under the Credit Facility, $380.0 million and $44.6 million in borrowings outstanding on the Revolving Credit Facility and the Swing Loan, respectively, and $13.0 million allocated to support various letters of credit, there was a remaining contractual availability under the Credit Facility of $1,012.4 million as of September 30, 2024.

The blended interest rate for outstanding borrowings under the Credit Facility was 6.7% and 7.2% at September 30, 2024 and December 31, 2023, respectively.

Debt Service Requirements

3 unchanged sentences

Covenant Compliance

As of June 30, 2024, we were in compliance with the financial covenants of our debt instruments.

As of September 30, 2024, we were in compliance with the financial covenants of our debt instruments.

The indentures governing the senior notes contain provisions that allow for the incurrence of additional indebtedness, if after giving effect to such incurrence, the fixed charge coverage ratio (as defined in the respective indentures, which is a ratio of our consolidated EBITDA to fixed charges, including interest) for the trailing four quarter period on a pro forma basis would be at least 2.0 to 1.0.

4 unchanged sentences

Summarized combined balance sheet information for the parent company and the Guarantors is as follows:

September 30,

(In millions)

4 unchanged sentences

Summarized combined results of operations for the parent company and the Guarantors is as follows:

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2024

September 30, 2024

Operating income

3 unchanged sentences

In addition, our Board of Directors authorized increases to the Share Repurchase Program of $500.0 million on each of June 1, 2022, May 4, 2023 and May 9, 2024.

As of June 30, 2024, we were authorized to repurchase up to an additional $545.1 million in shares of our common stock under the Share Repurchase Program.

We repurchased 3.1 million and 1.5 million shares during the three months ended June 30, 2024 and 2023, respectively, and 4.8 million and 3.2 million shares during the six months ended June 30, 2024 and 2023, respectively.

As of September 30, 2024, we were authorized to repurchase up to an additional $343.1 million in shares of our common stock under the Share Repurchase Program.

We repurchased 3.5 million and 1.6 million shares during the three months ended September 30, 2024 and 2023, respectively, and 8.3 million and 4.8 million shares during the nine months ended September 30, 2024 and 2023, respectively.

Subject to applicable laws, repurchases under the Share Repurchase Program may be made at such times and in such amounts as we deem appropriate.

17 unchanged sentences

July 15, 2023

August 15, 2023

September 15, 2023

October 15, 2023

December 7, 2023

6 unchanged sentences

July 15, 2024

August 20, 2024

September 15, 2024

October 15, 2024

Other Items Affecting Liquidity

5 unchanged sentences

In addition, we expect to spend an additional $75 million in 2024 for hotel renovation projects at six of our gaming entertainment properties.

We intend to f und our capital expenditures through cash on hand, operating cash flows and availability under our Credit Facility.

We intend to fund our capital expenditures through cash on hand, operating cash flows and availability under our Credit Facility.

In addition to the maintenance capital spending discussed above, we continue to pursue other potential development projects that may require us to invest significant amounts of capital as well as capital spend required for identified growth projects.

We expect to spend an additional $100 million in 2024 on such growth projects, which includes the completion of the new land-based facility at Treasure Chest, which opened in June 2024, the expansion of meeting and convention space at Ameristar St.

We expect to spend $100 million in 2024 on such growth projects, which includes the completion of the new land-based facility at Treasure Chest, which opened in June 2024, the expansion of meeting and convention space at Ameristar St.

Charles and the start of construction of a new casino, Cadence Crossing.

This new 10,000 square foot casino will be built on the site that currently holds our Jokers Wild Casino and will feature 450 slots and several dining options.

During the six months ended June 30, 2024, the company spent approximately $204 million of th e total estimated $400 million to $450 million of capital s pend expected in 2024.

This new 10,000 square foot casino featuring 450 slots and several restaurants will replace our Jokers Wild casino and will be built on the site that currently holds our Jokers Wild casino.

During the nine months ended September 30, 2024 , the company spent approximately $289 million of the total estimated $400 million to $425 million of capital spend expected in 2 024.

Other Opportunities

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To the extent such sources of funds are not sufficient, we may also seek to raise additional funds through public or private equity or debt financings or from other sources to the extent such financing is available.

After receiving approval from the City Council of Norfolk, Virginia in October 2024, we are executing on an opportunity for a new casino resort development in Norfolk, Virginia.

We expect to open a small temporary facility in late 2025 and a permanent facility in late 2027.

We currently expect the permanent facility will feature a 200-room hotel, eight food and beverage outlets and a casino with 1,500 slots and 50 table games.

While we are still finalizing construction and development costs, we currently expect overall project costs of approximately $750 million.

Contingencies

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis