Boyd Gaming finalized its takeover of Cannery Casinos on Tuesday, bolstering its already powerful hold on the high-performing Vegas locals market.
The company announced it had sealed a $230 million deal to purchase the chain back in June, and this week added the Cannery Casino Hotel in North Vegas and the Eastside Cannery Casino and Hotel to its property portfolio.
June’s announcement came just a week after Boyd said it would buy another North Vegas property, the Aliante Casino Hotel and Spa, for $380 million.
Boyd’s property splurge holds a great deal of logic. The locals market is exploding, and with it north Las Vegas is booming as well.
Boyd said last year that the Vegas locals market now accounts for some 28 percent of its revenue, up from 22 percent in 2014.
It expects the Cannery acquisition to add $32 in earnings before interest, tax, depreciation and amortization in its first full year.
Picture Bright for North Vegas
As visitor numbers Las Vegas reach record highs, the room rates on the Strip are rising, which means many visitors are looking the cheaper alternatives.
Meanwhile, new investment in north Vegas promises a brighter future for the area and a more diversified economy for Nevada.
Faraday’s electric car manufacturing plant, currently under construction at the Apex Industrial Plant, hopes to start building cars as early as 2017, and expects to hire 4,500 locals, who may well choose to let off steam at the Cannery Casino after a hard day’s grind.
“The Cannery transaction, along with our recent acquisition of Aliante, further expands Boyd Gaming’s presence in the high-performing Las Vegas Locals market,” said Keith Smith, Boyd President and Chief Executive Officer.
“With a diversified and robust portfolio in the Las Vegas Valley, we are in better position than ever to deliver on the substantial growth potential that still lies ahead in southern Nevada.”
Empire Building in the Locals Market
Boyd’s main competitor in the locals market, Red Rock Resorts, the parent of Station Casinos, has also been busy adding to its portfolio. It recently completed the $312.5 million acquisition of the Palms Casino Resort, just off the Strip, which has been described as a hybrid property, attracting both locals and tourists.
Red Rock now owns, or has interests in, some 20 casinos properties throughout the Las Vegas area.
The Aliante and Cannery acquisitions, meanwhile, will bring Boyd’s casino portfolio to 12 in Southern Nevada, including the California, Fremont and Main Street Station in downtown Vegas; and Orleans, Gold Coast, Suncoast and Sam’s Town in other areas of the city.
It also owns two casinos in Henderson and a dozen more in Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi and New Jersey.