Twin Rivers’ revenue increased 17.0% to $129.3m for the third quarter of 2019, thanks to increases in hospitality revenue, but higher operating expenses led to a decline in income.
Gaming made up the largest portion of the operator’s revenue, accounting for $88.3m of the total, up 7.6% year-on-year.
Food and beverage revenue increased 48.8% to $18.1m while hotel revenue almost doubled to $11.1m, up 94.7% from 2018.
Racing revenue, meanwhile, declined slightly to $3.3m, less than 1% below 2018’s total. Other revenue increased 17.3% to $8.6m.
Casinos in Rhode Island — the Twin Rivers Casino Hotel in Lincoln and Tiverton — took in a combined $67.8m in revenue in the quarter. The Dover Downs casino in Delaware contributed $25.9 million of revenue, while the Hard Rock Hotel & Casino Biloxi, Mississippi took in $33.1m and other sources contributed $2.5m of revenue.
George Papanier, president and chief executive officer of Twin Rivers, said increased competition in Rhode Island meant the operator took in less revenue from its home state, but that this was offset from the success of the recently-acquired Dover Downs site.
“While we experienced the anticipated short-term impacts of new competition at our Twin River Casino Hotel in the quarter, we continued to reap the benefits of our disciplined M&A strategy, with Dover Downs and Tiverton both performing extremely well this quarter. Our overall plan is on-track and the long-term value proposition we have laid out for our investors remains intact.”
Operating costs, however, increased 33.4% to $107.9m. Gaming-related costs increased 31.4% to $23.5m, while racing costs decreased 1% from 2018 to $2.3m.
Food and beverage costs rose to $15.3m, up 58.7% with hotel-related expenses up 99.7% to $4.2m.
However, advertising, general and administrative expenses were by far the largest cost, rising 41.7% to $50.0m.
The operator said that increased share-based compensation costs and professional and advisory fees of $1.8 million were among the reasons for this higher expense.
After incurring an acquisition, integration and restructuring expense of $1.9m and depreciation and amortization costs of $8.3m, Twin Rivers was left with operating income of $21.5m, 27.7% less than the prior year.
Twin Rivers gained a further $810,000 through interest income, but paid $11.5m in interest expenses. This led to a pre-tax loss of $10.8m, down 55.5% year-on-year.
After paying $3.8m in income taxes, down 52.0% from 2018, Twin Rivers was left with a net income of $7.0m, down 59.8%.