Century Casinos Stock Up 28% In A Week Following Strong Earnings Report

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Colorado casino operator Century Casinos ($CTNY) is hugely in the green on the stock market following its second quarter earnings report last week.

The company, based in Colorado Springs, was trading at under $11 a share before the report was released, with the stock surging roughly 28% over the next handful of days. It was trading at or around $13.90 a share on Thursday afternoon. The casino operator has a market capitalization of more than $400 million. (Just for context: Casino operator Penn National Gaming’s market cap is $11.16 billion.)

“The second quarter was an outstanding performance for our company and our entire team,” Peter Hoetzinger, co-CEO and president, said on an earnings call. “Our focused operating strategy produced strong and robust margins, and we generated the highest quarterly EBITDA in the history of our company. We’re happy to report $92.2 million of revenue and $25.2 million of adjusted EBITDA. Again, this is a new quarterly record for Century Casinos. On a consolidated basis, EBITDA margin in the quarter was 27.4%. All these numbers are substantially better than what the Street expected.”

The 29-year-old company said that while its brick-and-mortar casino operations “still account for the vast majority” of its revenue, revenue from internet gambling, sports betting, and parimutuel wagering has, for the first time ever, surpassed revenue from its hotels and food and beverage operations.

“That comes … without any significant investment from our side whatsoever,” Hoetzinger stressed.

Sport betting results

Century has been able to make money from online sports betting without “any significant investment” because it isn’t running it in-house. Rather, experienced tech companies are its partners.

The company didn’t report revenue specifically from its sports betting deals, instead grouping that with online casino gaming and parimutuel wagering revenue. Century has partnered with the likes of Rush Street Interactive/BetRivers, Circa Sports, bet365, and Caesars/William Hill for online betting in markets where it has casinos. Century gets a share of net gaming revenue, with an undisclosed minimum guarantee.

According to its second quarter SEC filing, Century’s operating revenue for the quarter was as follows:

  • Gaming (casino properties): $78,902,000
  • Parimutuel, sports betting and iGaming: $4,657,000
  • Food and beverage: $3,604,000
  • Hotel: $2,221,000
  • Other: $2,801,000

The pandemic has made year-over-year comparisons tricky, but the parimutuel, sports betting, and iGaming numbers were up from $2,842,000 in the second quarter of 2020. Colorado began sports betting during the height of the COVID-19 wave in May 2020.

“During the quarter, our operating partners Rush Street and William Hill launched iGaming in West Virginia under our master license,” Hoetzinger said about the three-month period ending June 30, 2021. “And the second of our three Colorado sports betting partnerships plans to go live next month. … In Canada, we also look forward to the arrival of online sports betting, which could provide significant upside for us in the province of Alberta, where we have four out of 28 licenses.”

A bill for single-game sports betting passed the Canadian parliament earlier this summer.

For investors, Hoetzinger stressed that Century Casinos sees “even more upside by reinvesting into our existing casino assets” at this time. Its traditional casino gaming still accounts for 85% of revenue.

Brian served as a senior reporter and online content manager for Card Player Magazine for nearly a decade before joining USBets in October 2018. He is currently focused on legal and regulated sports betting and online gaming. He's an avid jiu-jitsu practitioner in his free time.

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