The anemic economic recovery has hit some of domestic gaming's biggest regions awfully hard this year. Las Vegas is among the U.S. leaders in unemployment, and the South isn't far behind. Since that's where many of Boyd Gaming's (NYSE: BYD ) casinos are, it shouldn't be a surprise that expectations were less than outrageous and results were barely enough to shrug at.
Overall at Boyd, revenue fell $5.2 million to $590.2 million and earnings per share fell 2 cents to $0.04. But adjusted EBITDA did rise 5.8% to $122 million from a year earlier, showing a little improvement if you're looking for a bright side.
The Las Vegas locals market, downtown Las Vegas, and Midwest and South regions were basically flat from a year ago, showing that a gaming recovery in the U.S. is anything but strong. It was Borgata in Atlantic City that was most disappointing, where revenue fell 2.7% to $207.7 million and adjusted EBITDA dropped 7.4% to $50.3 million.
With $2.4 billion in debt at Boyd and another $806 million for Borgata, it's hard to see Boyd as a great risk to take right now.
U.S. vs. Asia
I noted last week that Penn National (Nasdaq: PENN ) was the one regional gaming company that I would make a bet on in a weak U.S. market. That holds true after Boyd's results, but investors looking for growth should turn their attention to Asia.
Melco Crown (Nasdaq: MPEL ) , Las Vegas Sands (NYSE: LVS ) , and Wynn Resorts (Nasdaq: WYNN ) have a majority, if not all, of their revenue coming from Asia, a market that is still growing rapidly. With competition in the U.S. only expanding as new states think about allowing casinos, I don't see that changing. Not only are Macau and Singapore growing, but they're also limiting supply at the same time, meaning the players that are there won't have to worry too much that new entrants will cannibalize their market.
That's why the best bets in gaming are still half a world away.
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