Century Casinos considers withdrawing from Europe and bolstering its presence in North America.
Let's dive into the optimistic outlook of Century Casinos, bucking the industry's cautious sentiment with a projected 10% revenue surge for 2025.
Century's CEO, Pete Hoetzinger, recently shared the good tidings. Hoetzinger sat with Casino Life during a time of flux, both politically and for Century Casinos. The company has been pouring capital into its U.S. properties and making moves in Canada while trying to kiss adieu to Poland. Here's the lowdown on Pete's candid conversation.
Why the optimism?
2024 was a transitional year for us, integrating new properties like the Nugget in Reno, Nevada, and the Rocky Gap Golf Resort in Maryland. They've brought construction disruption, especially in Nevada and Missouri, but it's all behind us now. The new facilities in Missouri – a land-based casino resort in Caruthersville and a hotel in Cape Girardeau – coupled with improvements throughout our portfolio, give us reason to believe we can grow our revenue and EBITDA in the coming years.
Regional Landscape
Century's casinos are well-positioned to seize opportunities in the regional casino market. The properties are focused on creating an attractive blend of amenities, promotions, and entertainment for a broader audience. Missouri's two casinos are extending their reach and drawing new guests. In particular, Caruthersville holds substantial opportunity to reach deeper into Tennessee, where no commercial casino competition exists within the state.
While the commercial gaming environment is stable, the uncontrolled expansion of illegal slot machines in some regions remains a challenge. To combat this, regulatory authorities should step in, and regional casinos must ensure their gaming experience surpasses the simple gameplay offered at convenience stores. To achieve this, diversified offerings and personalized marketing strategies are key.
Spicing up the Stock
The success of Century's properties will naturally influence stock price, but Pete's working on lowering the cost of capital on the Term Loan B from SOFR +600. Additionally, Craig-Hallum Capital Group recently issued a favorable research report for the company, with four analysts covering Century and all holding a "Buy" rating on the stock.
Unfortunately, the market seems undervalued, thanks to Century's exposure in Eastern Europe. As they've been working on selling the business, the war in neighboring Ukraine has made things challenging.
First Month Blues, or a Blockbuster?
The opening month at Caruthersville has surpassed expectations, with volumes during the grand opening weekend setting records. Century Casinos anticipates the property will pick up significant market share in the region.
Sisterly Love in Cape Girardeau
Despite the new competition in Caruthersville, Cape Girardeau has thrived in November. The property is still focusing on exceptional customer experiences with high-level amenities like The Riverview Hotel and Beacon 53 restaurant. The addition of a new full-service Starbucks in August and unique entertainment offerings have attracted new customers.
Capitalizing on Sports Betting
With sports betting now legal in Missouri, Century Casino in Cape Girardeau has the chance to offer a one-of-a-kind experience. Customers can watch sports, place retail bets, and play casino games in a social environment. Caruthersville's new casino was built with a sports bar that can easily adapt to a similar offering. Partnering with top-tier retail sports book brands could create additional engagement opportunities for the properties. Online partnerships with established operators could also generate immediate additional revenue.
A Slipping Slide in Maryland
Revenues at Rocky Gap Resort have been on a downward trend since Century took over. To reverse this, the company is focusing on marketing the resort to the metro areas of Baltimore and Washington, D.C. The initial results are promising.
Surviving the Storm in Cripple Creek
Century Casino in Cripple Creek has remained resilient despite new products and management in the area. The property is benefiting from increased volume due to a nearby 300-plus room hotel and the traditional appeal of Cripple Creek as a place for a leisurely stroll.
Arbros in Alberta
All operations in Alberta performed in line with expectations in 2024. The market is currently discussing the introduction of sports betting and iGaming, which could be approved by the end of 2025. Century is preparing for this potential growth opportunity by implementing popular sports bars at its casinos in Edmonton and St. Albert.
Onward to Poland
Century's seven casinos in Warsaw, Wroclaw, Krakow, Katowice, Lodz, and Bielsko-Biala are performing as expected. However, the company has decided to exit the Polish market and sell its operations.
What's the mood today? Are customers free-spending or cautious?
Historically, consumer spending on gambling tends to be more cautious before a presidential election due to economic uncertainty. However, in Missouri, the election outcome seems to have given regional consumers a boost in confidence. Whether it's policy expectations or simply feeling validated, the results are positive.
What's a typical Century customer?
Most Century customers hail from the regional area within a couple hours' drive. The company's new hotels and amenities have drawn a broader range of customers, including those seeking a weekend getaway or a day trip. Customers are mainly middle-aged to older adults, but the introduction of electronics and diverse entertainment has been successful in attracting younger customers.
The Future Awaits
Next year will focus on completing the integration of new properties and optimizing returns on the 2024 investments. This will boost free cash flow, Improve balance sheets, and lower leveraged ratios. From 2026 onward, Century plans to become busy on the M&A side, targeting mid-size operations (generating between $20 million and $75 million in annual EBITDAR) that could greatly benefit from increased attention.
Thanks, Pete!
For more details, visit Century Casinos
Casino Life Magazine extends gratitude to Peter Hoetzinger for his time in this exclusive interview.
This edition's feature interview can be found in Casino Life Magazine's December 2024 Issue 172.
In the optimistic outlook for Century Casinos, CEO Pete Hoetzinger shared that the company aims to grow revenue and EBITDA in the coming years, due to new properties and improvements in their portfolio. They are also planning to capitalize on sports betting in Missouri, as it becomes legal. Despite historical cautious consumer spending before a presidential election, regional consumers in Missouri have shown increased confidence. Century Casinos is targeting mid-size operations for M&A from 2026 onward. Peter Hoetzinger's interview can be found in Casino Life Magazine's December 2024 Issue 172.
