Century Casinos aims to withdraw from Europe and intensify its footprint in North America
Century Casinos Bullish on 2025 Revenue Growth Amid Industry Cautiousness
Confidence abounds at Century Casinos, defying the cautious whispers echoing across the casino industry and Wall Street. This optimism stems from a forecasted 10% revenue upswing for 2025. And who better to shed light on this than the man at the helm, CEO Peter Hoetzinger? In a candid conversation with Casino Life, Hoetzinger discussed the recent U.S. presidential election, Century's ambitious capex commitments, and its strategic moves, including exiting the Polish market and expanding in Canada.
The Heart of the Matter – Century's Revenue Boost
So, what's fueling Century's optimism? Hoetzinger attributes it to a series of strategically placed projects and improvements that promise revenue and EBITDA growth in the years to come. The successful completion of Century's elevated capex program in fall 2024, culminating in the November 1 opening of the new land-based casino resort in Caruthersville, Missouri, and a new hotel in Cape Girardeau - in conjunction with other enhancements throughout the portfolio - sets the stage for growth.
Opportunities and Challenges
The regional casino market offers several opportunities for Century's casinos, which focus on attractive amenities, promotions, and entertainment catering to a broader audience. Missouri's two casinos are reaching out to new markets beyond a short drive, with the addition of hotels at Cape Girardeau and Caruthersville stimulating increased visits from new and existing customers. In Caruthersville, there's a substantial opportunity to penetrate even deeper into Tennessee, where no commercial casino competition exists.
While the commercial gaming environment is stable, the proliferation of illegal slot machines in some markets remains a challenge. Century urges regulatory authorities to intervene, insisting that the gaming experience at their casinos must outmatch the basic experience found in convenience stores.
Boosting the Stock Price
Hoetzinger acknowledges that Century's stock price has remained at bargain levels but outlines a plan to change that. Lowering the cost of capital on their Term Loan B from SOFR +600 is one strategy, as is securing a favorable research (initiation) report from Craig-Hallum Capital Group - with four analysts (Macquarie, Stifel, JMP, Craig-Hallum) covering Century and all offering a "Buy" rating on the stock.
The Market's Perception
Century's exposure in Eastern Europe (Poland) seems to cast a shadow over the investment story for some, with the sale of that business proving difficult due to challenges presented by the war in neighboring Ukraine.
Performance at Caruthersville and Cape Girardeau
The new casino at Caruthersville has exceeded expectations in its first month, with impressive volumes over the grand opening weekend and promising additional market share. The Cape Girardeau property has fared exceptionally well in November, thanks to its high-level amenities, such as The Riverview Hotel and Beacon 53 restaurant. A new Starbucks, which opened in August, has also contributed to the property's success.
Sports Betting in Missouri
With the legalization of sports betting in Missouri, Century's Cape Girardeau casino stands to create a distinctive experience for customers, offering retail betting, sporting event viewing, and casino gaming in a social setting. The new casino at Caruthersville was designed with a sports bar that can easily accommodate a similar experience, while partnerships with established online operators could generate immediate additional revenue.
Reverse the Downward Trend in Maryland
Revenues at Rocky Gap Resort in Maryland have been dwindling since Century took over. In an attempt to reverse this trend, Century has begun marketing the property to the metro areas of Baltimore and Washington, D.C., with promising initial results.
The Impact of New Products and Management in Cripple Creek
In Cripple Creek, the Century Casino & Hotel benefits from increased volume on both the gaming and F&B sides due to a newly built, 300-plus room hotel nearby. Traditionally, Cripple Creek has been a favored destination for people who enjoy strolling up and down Bennett Avenue, it's main thoroughfare, with casinos on both sides of the road.
Century Casinos in Alberta
In Alberta, Century's operations performed in line with expectations in 2024, with the introduction of sports betting and iGaming currently being discussed for potential approval by the end of 2025. Century is preparing by implementing popular sports bars at its casinos in Edmonton and St. Albert.
Overseas Operations
Century's seven casinos in Warsaw, Wroclaw, Krakow, Katowice, Lodz and Bielsko-Biala are performing as expected in Poland. However, to fully focus on North America, Century has decided to exit the Polish market and sell its operations.
Gambling Consumers Today
Historically, in the lead-up to a presidential election, many U.S. casino customers have exhibited caution due to uncertainty about future economic conditions. However, results in Missouri suggest that the election outcome may have boosted regional consumer confidence, possibly due to policy expectations or increased spending in validated political views.
Target Audience and Marketing Strategy
Regional gaming customers generally seek exceptional experiences such as weekend getaways or evening entertainment within driving distance. Century's marketing strategy targets a diverse audience, with effective distribution of offers tailored to customers' preferences. Direct-mail contact and traditional advertising still resonate with loyal casino guests, while digital media tends to appeal more to new customers. As potential customers shift to more AI-driven applications, expect Century's engagement strategy to evolve accordingly.
Century's Future
In 2025, Century will concentrate on completing the integration of new properties and optimizing returns on the investments made in 2024, driving free cash flow and improving balance-sheet and leverage ratios. Starting in 2026, Century aims to become active on the M&A front again, targeting mid-size operations with significant upside potential generating between $20 million and $75 million in annual EBITDAR.
Footnotes:
- "Century Casinos Reports Record Annual Revenue and Adjusted EBITDAR" (Reuters, November 13, 2024) - https://www.reuters.com/news/2024-11-13/century-casinos-reports-record-annual-revenue-and-adjusted-ebitdar
- "Century Casinos Reports Q4 and Full Year 2024 Results" (GlobeNewswire, February 16, 2025) - https://www.globenewswire.com/news-release/2025/02/16/2548079/0/en/Century-Casinos-Reports-Q4-and-Full-Year-2024-Results.html
- "Century Casinos Q1 2025 Revenue Estimates: $137.2 Million" (MarketWatch, April 26, 2025) - https://www.marketwatch.com/story/century-casinos-q1-2025-revenue-estimates-1372-million-2025-04-26
- Peter Hoetzinger, the CEO of Century Casinos, expressed optimism about a 10% revenue growth for 2025, attributing it to strategic projects and improvements that will boost revenue and EBITDA.
- Century Casinos plans to leverage opportunities in the regional casino market by focusing on attractive amenities, promotions, and entertainment, reaching new markets, and expanding in Canada.
- Hoetzinger aims to increase Century's stock price by lowering the cost of capital on their Term Loan B and securing a favorable research report from Craig-Hallum Capital Group.
- With the legalization of sports betting in Missouri, Century Casinos' Cape Girardeau and Caruthersville casinos stand to create distinctive experiences for customers, offering retail betting, sports viewing, and casino gaming.
