Casino giant Century Casinos seeks to withdraw from Europe and strengthen its foothold in North America
Century Casinos' Upbeat Outlook for 2025: A Chat with CEO Peter Hoetzinger
Century Casinos is bucking the caution in the casino industry and Wall Street, forecasting a 10 percent revenue surge next year. In an exclusive interview with Casino Life, CEO Peter Hoetzinger discusses plans, challenges, and the reality behind Century's optimism.
What propels Century Casinos' optimism for 2025?
2024 was a transformative year for us. We integrated two newly acquired properties: the Nugget in Reno, Nevada, and the Rocky Gap Golf Resort in Maryland. Our enhanced capital expenditure program led to construction disruption, particularly in Nevada and Missouri. But we've wrapped up that program, culminating in the November 1 launch of the new land-based casino resort in Caruthersville, Missouri. Besides this new facility and our new hotel in Cape Girardeau, Missouri, plus numerous other improvements across our portfolio, sets us on a path to grow revenue and EBITDA in the years ahead.
What challenges and opportunities does the regional casino market offer now?
Our casinos are well-positioned to capture opportunities in the regional market—with a focus on offering diverse amenities, promotions, and entertainment attractive to a broader customer base. In Missouri, our two casinos are expanding their reach and drawing new guests from areas farther than just a short drive. The addition of hotels at Cape Girardeau and Caruthersville is already drawing more visits from new and existing customers. In Caruthersville, we see substantial potential to tap into Tennessee, where no commercial casino competition exists within the state.
A persistent challenge is the unchecked expansion of illegal slot machines in some markets. To combat this, it is crucial for regulatory authorities to step in. Regional casinos must also ensure their gaming experience goes beyond the basic convenience-store experience to attract a broader audience. Data analytics can help build more personalized marketing strategies to achieve this goal.
Raising Century's stock price:
Performance and results at our properties will be the primary factor affecting our stock price. We've been working on reducing our Term Loan B cost of capital from SOFR +600. Additionally, Craig-Hallum Capital Group recently released a favorable research (initiation) report, leading four analysts (Macquarie, Stifel, JMP, Craig-Hallum) to assign a "Buy" rating to Century's stock.
Market undervaluation and stock price:
Our continued exposure in Eastern Europe (Poland) seems to be a concern for some investors. We've been working on selling that business for quite some time. Yet, given the ongoing war in neighboring Ukraine, the sale process has been challenging.
Is Century Caruthersville performing as planned?
The first month of operation at the Caruthersville casino has surpassed expectations. Volumes during the grand-opening weekend were exceptional, and we anticipate Caruthersville will capture significant market share.
Plans for the Cape Girardeau sister property:
In light of the Caruthersville launch, our Cape Girardeau property has excelled in November. It continues to offer remarkable experiences with high-end amenities like The Riverview Hotel and Beacon 53 restaurant. The property has been successful in attracting new customers with unique entertainment offerings and a new full-service Starbucks that opened in August.
Capitalizing on sports betting in Missouri:
With the legalization of sports betting in Missouri, our Cape Girardeau casino has the chance to create an unprecedented customer experience combining retail betting, sporting events, and casino games in a lively setting. At Caruthersville, the casino was designed with a sports bar easily adaptable for a similar experience. Partnering with top-tier retail sportsbook brands could amplify engagement opportunities. Online sports betting partnerships would further generate immediate additional revenue.
Reverse Rocky Gap Resort's revenue decline:
To tackle the revenue decline at the Rocky Gap Resort, we've started promoting the property to the metro areas of Baltimore and Washington, D.C., with promising early results.
Impact of new products and management in Cripple Creek:
Our Century Casino & Hotel in Cripple Creek benefits from the additional volume from a newly built 300-plus room hotel, boosting both gaming and F&B revenues.
Alberta casino performance and changes:
All our Alberta operations performed as expected in 2024. The introduction of sports betting and iGaming is currently under consideration and might be approved by the end of 2025. We're preparing casinos in Edmonton and St. Albert for this opportunity.
Polish casinos and the market:
Our seven casinos in Warsaw, Wroclaw, Krakow, Katowice, Lodz, and Bielsko-Biala are meeting our expectations. Despite this, we've decided to exit the Polish market and sell our operations to concentrate fully on North America.
Consumer sentiments in various regions:
Historically, gambling consumers tend to be cautious about their spending leading up to a presidential election due to economic uncertainty, but regional consumer confidence appears to have increased after the election outcome. Younger consumers seem to be attracted to diversified leisure activities offered in a fun and social environment at lower price points. Engagement strategies are evolving to leverage AI-driven applications.
- Century Casinos' optimism for 2025 is propelled by the integration of two newly acquired properties, the launch of a new land-based casino resort in Caruthersville, Missouri, and numerous other improvements across their portfolio.
- In the regional casino market, Century Casinos is focused on offering diverse amenities, promotions, and entertainment to attract a broader customer base, while combatting the challenge of unchecked expansion of illegal slot machines by advocating for regulatory authorities to step in.
- Century's stock price may be raised by performance and results at their properties, reducing their Term Loan B cost of capital, and favorable research reports by analysts like Craig-Hallum Capital Group.
- In Missouri, Century Casinos sees substantial potential to tap into Tennessee's market, where no commercial casino competition exists, and plans to capitalize on sports betting through unique customer experiences combining retail betting, sporting events, and casino games in a lively setting.
