Boyd Gaming Have No Reason to Sell Real Estate, According to Its CEO Keith Smith

By John Isaac,
Editor at online-gambling.com

John Isaac Editor at online-gambling.com

John Isaac is an editor with many years of experience in the gambling industry. He writes expert articles on card games like blackjack and poker. In addition, he is also well aware of the US gambling laws and the Indian and Dutch gambling markets. You can rely on verified information and insightful details.

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Last updated: February 25, 2023

Boyd Gaming, which is the dominant name in DTLV (Downtown Las Vegas), is unlikely to sell any of its real estate in Las Vegas to raise cash. The President and Chief Executive Officer (CEO) of Boyd Gaming, Keith Smith, stated this in a recent interview with Nevada independent Howard Stutz. Boyd runs 10 (ten) gaming venues in its home market. These venues include Aliante, Cannery, California, Fremont, Jokers Wild, Gold Coast, Sam’s Town, Main Street Station, The Orleans, and Suncoast.

“With the strength of our balance sheet, the strength of our cash flows and our ability to access other forms of financing, we just don’t have a need (to sell real estate)”- Smith stated. Indeed, Boyd’s is in a strong financial position, and this enables it to pay dividends and buy its own shares back. The firm had $3.05 billion in debt and $283.5 million in cash at the end of 2022.

Sale-Leaseback Deals Are Not Being Considered by Boyd

In the last few years, sale-leaseback transactions have become increasingly popular in the gaming industry. In those transactions, a casino operator sells the main assets of a single venue or multiple venues to REIT (Real Estate Investment Trust) or a private equity economy firm for a cash payment.

It is a good way to raise money and is frequently preferable to issuing new bonds or shares. However, the gaming company still takes responsibility for the continuous maintenance of the sold properties. The company also takes on long-term obligations for rental to the buyer in exchange for cash.

Boyd presently has a relationship with Gaming and Leisure Properties. The reason is that the property assets of four Boyd casino hotels in Ohio, Missouri, and Indiana are owned by the gaming REIT.

But as Smith mentioned to the Independent, when Boyd bought the running rights to those locations in 2018, that arrangement already existed with a prior tenant. Boyd’s CEO also mentioned that the company has been in discussions with VICI Properties, the largest casino landlord. A deal is still not an option for us, he continued.

Boyd’s Competitor, Red Rock, Is Also Not Considering Selling Real Estate

Red Rock Resorts is Boyd’s main competitor in the Las Vegas market. The company also has a sizable portfolio of used and occupied real estate. Just like Boyd, Red Rock owns the real estate for all of its venues in Sin City, and the operator of Green Valley Ranch has no plans to change that.

In a response to a question asked by Cassandra Lee, a Jefferies analyst, Stephen Cootey, the Chief Financial Officer (CFO) of Red Rock Resorts, Inc., mentioned that they like to own the real estate. He said that owning the real estate provides them with maximum flexibility, including being able to keep their employees through the COVID-19 pandemic which emerged in March 2020. Which was a tough time for casinos until they could reopen without restrictions in mid 2021.