It’s no secret that the Covid-19 pandemic has thrown hundreds of gaming operators into survival mode—concentrating on bringing back as many amenities as state rules allow, rehiring employees as quickly as possible, trying to earn revenue as permissible capacity slowly creeps up.
Twin River Worldwide Holdings (TRWH), the Rhode Island-based operator of what will be nine casino properties in four states by later this year, has faced those same challenges in all their markets. However, Twin River arguably stands alone as an operator that is very much in growth mode, even as it does what’s needed to survive in the current environment.
Ever looking at opportunities, Twin River has made some shrewd acquisition moves in a growth path that began in 2014, when the company—then owner of one Rhode Island racino and a Colorado racetrack—purchased the Hard Rock Biloxi property for $250 million. Soon thereafter, it bought out its Rhode Island competition, subsequently transforming the former Newport Grand racino into the Tiverton Casino Hotel.
In March 2019, Twin River went public with the acquisition of Dover Downs Hotel & Casino in Delaware. Next, it was announced that the company had agreed to purchase Isle of Capri Kansas City and Lady Luck Casino Vicksburg in Mississippi.
This year began with the announcement that Twin River would acquire three casinos in Colorado from Affinity Gaming. Then, the company seized another opportunity in April—as the industry was shut down due to Covid-19—when it acquired Bally’s Atlantic City for the bargain-basement price of $25 million from Caesars Entertainment, which had been looking to shed a New Jersey asset to hasten approval of its merger with Eldorado Resorts.
At the same time, the company announced two more acquisitions—the Mont Bleu Resort Casino & Spa at Lake Tahoe, Nevada and the Eldorado Shreveport in Louisiana.
Now, as many operators still concentrate on surviving harsh business conditions due to the ongoing pandemic, Twin River is concentrating on what operators do in flush times—implementing capital improvement, branding and marketing plans on newly acquired properties in four different states.
According to George Papanier, president and CEO of TRWH, the operator has been able to continue its growth path despite the pandemic through a proactive approach that protected cash flow to continue cap-ex projects aimed at ensuring the long-term viability of each new asset.
“We’ve continuously taken proactive steps to ensure that we were well-prepared for an event like this, financially speaking,” Papanier told GGB News. “We’ve always preferred to operate with low leverage and high levels of liquidity so that we could remain nimble for when different situations arose.
“So, we have no debt maturities prior to 2024. We’ve always believed there would be opportunities that would be presented as a well-capitalized company, so some presented themselves during the pandemic, and others, we believe, will present themselves subsequent to the pandemic. We’ve put ourselves in a great position to take advantage of these recent transactions, as well future opportunities.”
Following Through
For now, Twin River continues to pay close attention to maximizing the return on investment for each of its new acquisitions. On July 2, the company announced the completion of the acquisitions of the Isle Kansas City and Lady Luck Vicksburg properties. The company immediately got to work on physical improvements, and on the marketing side, as both properties will be rebranded.
“What a brand means to us is promise made, promise delivered,” said TRWH Executive Vice President Phil Juliano. “We pride ourselves as a company on being able to operate very efficiently. When it comes to the operating side, we believe we know what the customer wants; we know what the influential attributes are that gamers embrace.
“We also are very focused on that idea, because we believe that if you’re not operating in a monopoly, you have to create value that lets you stand out among your competitors. And that’s part of our brand.”
Actually, the former Isle property in Kansas City has already been rebranded, as Casino KC. “The name’s got a nice ring to it; people are embracing it and liking it,” says Juliano. “We’re quietly rolling it out until we can separate from Eldorado’s systems and install our own systems.” He added that there will be “little bit of a launch party” when the new brand is complete, but the “spectacular” celebration will come when the capital improvements have been completed.
“We’re going to launch a considerable cap-ex program at Kansas City,” Papanier said. “That property is woefully under-amenitized. We’ll be adding a land-based facility there which will focus on recapturing customer segments we felt they lost over the last several years. That facility is going to have all the non-casino gaming operations, including restaurants, a future sportsbook and retail.
“More importantly, we’re going to lengthen this new parking structure to the casino, which we feel will provide for a much better sense of arrival, and a way better customer experience. We’re excited about the potential there.”
In Vicksburg, the former Lady Luck property requires much less in the way of capital improvements. Papanier said initial efforts in Vicksburg will focus on reintroducing table games and on creating a sportsbook, which the property currently lacks.
Biloxi Redux?
The new acquisitions in Nevada and Louisiana represent an opportunity to exploit the success the operator has had with Hard Rock Biloxi, as well as presenting cross-marketing opportunities that will strengthen the entire TRWH brand.
The Mont Bleu “is a beautiful property that recently went through a major $25 million renovation,” says Papanier. “We feel we can establish this as a destination property for our customer base for cross-marketing. We see opportunity in capturing not only lost market share, but local market share, as a result of a recent Covid-19-induced permanent closure of one of the local casinos.”
He adds that the Tahoe property will directly benefit from a new convention center, recently approved for construction right on the perimeter of the Mont Bleu site.
“There are some market segments we’re interested in, too,” said Juliano. “We’re interested in the Asian clientele from the West Coast; we think we can appeal to them. We think (local casinos) have kind of walked away from that business, and we think there’s some potential to attract it. We’ve got a great location near the convention center that will be built, and it’s a fine hotel. Lake Tahoe, seasonally, is a breathtaking place, and we think we’ll be able to keep some of our premium customers loyal as a result of that facility being available to them.
“We’ve done it in Biloxi—we go down in small groups, and they come back with stars in their eyes, saying we had no idea the Gulf Coast was like that. We think that Tahoe will be that one trip a year, that special trip that some of our best customers will take.”
The former Eldorado Shreveport also is a “top-tier property,” Papanier said. “It’s been a well-maintained property. It sits in the center of the Shreveport/Bossier City market. It has a lot of characteristics of our Hard Rock Biloxi property, where we’ve had considerable success. Our focus here will be aggressive marketing, complemented by some targeted cap-ex, to recapture market share.
“This is a first-quality mousetrap,” added Juliano. “It is in really good shape. I think the thing it needs is perhaps some aggressive attention to its customer base—incentives that are very attractive and basically tell the customer, you’ve got to play here. Again, we’ll add value.”
Home to AC
Meanwhile, many in Eastern gaming markets are keeping a close eye on Twin River’s newest acquisition, Bally’s Atlantic City, a deal that will finalize as that market struggles to survive with strict Covid-19 restrictions imposed by New Jersey Governor Phil Murphy, including a temporary ban on indoor dining at restaurants and drinks on the casino floor.
For Juliano, an Atlantic City native and veteran of the local casino industry with various stints at Trump, Hilton and Harrah’s properties, the Bally’s purchase represents a homecoming. “I’ve spent quite a few years in Atlantic City in a couple of different turns, if you will,” he said, “and coming back to Atlantic City two blocks from where I grew up is kind of wild. I’m excited about. it.”
As with other acquisitions, the property will be rebranded, with the iconic Bally’s name disappearing in favor of a new identity. The purchase agreement requires that the name be changed within six months after TRWH takes over the property, which, pending licensing approval, is expected by the mid-to-late fourth quarter.
“The facility there, when we name it properly, will be in the center of it all. I think that’s the tagline we’ll bring along with whatever the name ends up being,” Juliano said. “We’re excited about it. It also gets us in the iGaming space, and mobile sports betting. We think it’s a great opportunity.”
First on the agenda physically is a room makeover. “We will immediately commence a room refurbishment program that will phase over the next couple of years,” said Papanier. “I think there’s opportunity to add some unique restaurant brands there as well, along with utilizing the physical attributes of the existing property that in our view have been ignored recently, like the 80,000 square feet of convention and meeting space that is complemented by the more than 1,200 rooms the property has.”
While the historic Dennis Hotel is part of the acquisition, the Wild Wild West annex is not; that space will remain part of Caesars Atlantic City. However, the indoor connector to Caesars will remain, as will the retail connector bridge to the Claridge Hotel on the other side of the property.
“The Claridge bridge connector makes sense for both of us,” Papanier said. “We view them as a dormitory for our casino and our amenities, so it makes absolute sense to continue to combine that hotel inventory, which will allow us to go after the convention and meeting business aggressively. The same logic applies to Caesars. If we can aggressively go after significant convention and meeting business, it makes absolute sense” to connect the properties.
Juliano said there also is a plan to revitalize the Bally’s spa, which was a centerpiece of the property in the 1980s when it was Bally’s Park Place. “Bally’s had a great spa at one time, and it still has all the accoutrements necessary to be resurrected into a great spa,” he said. “That will give us amenities for the premium customer, so I’m excited to work with that.”
Juliano said the casino’s existing database will allow TRWH flexibility in familiarizing customers with the Twin River loyalty program. “You have to be competitive,” he said. “At the end of the day, we’ll get the right offers in the right people’s hands at the right time, and we’ll build on that. We’ll cross-market wherever the opportunity presents itself.”
Juliano expresses optimism regarding the Atlantic City market itself, which was soaring prior to the pandemic. “The last time I did anything in Atlantic City was the tail end of the Great Recession, and they were some painful times—actually on the back of its greatest time ever, with a $5.2 billion market,” he said.
“This time, virus aside, I think we’re catching Atlantic City on the upswing. And I think the energy coming out of Atlantic City was great (prior to the shutdown). I think Atlantic City is absolutely moving in the right direction.”
TRWH is currently working with local officials in all its jurisdictions to reopen properties with safety measures in place, and that will continue as the pandemic persists. However, at the same time, the operator continues to focus on the future, and its ongoing growth strategy.
“Since becoming a public company in March 2019, our M&A strategy has been to diversify our portfolio and expand our geographic footprint,” said Papanier. “Our disciplined approach focuses on acquiring assets that meet these criteria and will be accretive to earnings. If you look at our five recent acquisitions, they highlight the kinds of properties we’re looking for—they allow us to meaningfully enhance our financial profile, while increasing our presence in a number of geographic markets we aren’t currently in.
“We’re going to continue this strategy, and we’re going to take an opportunistic approach.”
