International edition
September 18, 2020

The company reported a net income loss of $26.8M for the third quarter

The Palms drives Red Rock Resorts net revenues up 13%, closes KAOS club after reopening

The Palms drives Red Rock Resorts net revenues up 13%, closes KAOS club after reopening
"While Palms has experienced exceptional growth across both the gaming and non-gaming segments of the business, the expense side of the business has been challenging to date," said Red Rock Resorts VP Michael Britt.
United States | 11/07/2019

Adjusted EBITDA was $111.1 million for the Q3 period, an increase of 1.8%, though the same index saw a decrease of 0.8% in Las Vegas operations due to The Palms Casino Resort performance.

R

ed Rock Resorts reported Tuesday financial results for the third quarter of 2019. Net revenues were $465.9 million, an increase of 13%, or $53.6 million, from $412.3 million in the same period of 2018. This growth was primarily due to an increase in Las Vegas operations, led by net revenues at the Palms Casino Resort, which on the same day announced it was closing its KAOS dayclub and nightclub due to expense, a few months after it debuted as part of the resorts' $690 million in renovations.

Net loss was $26.8 million for the third quarter of 2019, a decrease of $51.9 million, from net income of $25.1 million in the same period of 2018. This was primarily driven one-time charges relating to the termination of certain artist performance agreements and employment arrangements at the Palms, as well as higher depreciation and amortization relating to the Palms redevelopment project.

Adjusted EBITDA was $111.1 million for the third quarter of 2019, an increase of 1.8%, or $2.0 million, from $109.1 million in the same period of 2018. It was primarily due to an increase in Las Vegas operations excluding the Palms and management fees generated under the Graton Resort management agreement, partially offset by a decrease in Adjusted EBITDA at the Palms.

Net revenues from Las Vegas operations were $440.7 million for the third quarter of 2019, an increase of 13.1%, or $51.0 million. Adjusted EBITDA from this segment was $97.2 million for the third quarter of 2019, a decrease of 0.8%. The increase in net revenues was boosted by the Palms, and the decrease in Adjusted EBITDA was primarily due to a decrease in Adjusted EBITDA at the same property.

Adjusted EBITDA from Native American operations was $22.3 million for the third quarter of 2019, an increase of 12.6% due to increased management fees generated under the Graton Resort management agreement. 

The Palms redevelopment project is now complete with the final component of phase three of the project, Michelin-starred dim sum restaurant Tim Ho Wan, having opened in late September 2019. As of September 30, 2019, the company has incurred approximately $679 million in costs against the $690 million project.

KAOS closure at the Palms

Red Rock Resorts announced the Palms’ dayclub and nightclub closure Tuesday, saying it was effective immediately, just five days after reopening.

"While Palms has experienced exceptional growth across both the gaming and non-gaming segments of the business, the expense side of the business has been challenging to date, due in large part to the entertainment and fixed cost structure associated with KAOS," Red Rock Resorts Vice President Michael Britt said in a statement, as reported by KSNV.

"Therefore, we have decided to take some time to reassess the programming and use of those venues going forward," he continued. "In the interim, we intend to use the venues for private meeting space and special events, in addition to everyday resort pool operations."

KAOS, described as a fully integrated 73,000 square foot dayclub and 29,000 square foot nightclub, originally opened in April, with a weekend takeover that featured J Balvin, G-Eazy, Cardi B and others. The club closed Sept. 15 to make way for a new outdoor dome and reopened Oct. 31 with another performance from rapper Cardi B. The Vice President and General Manager of the Station Casinos-owned Palms Casino Resort in Las Vegas, Jon Gray, resigned last month.

Related news
Leave your comment
Newsletter Subscription
Subscribe to receive the latest news and updates
Enter a valid email
Complete the captcha
Thank you for registering to our newsletter.