Monarch Casino Leading Way in Fast-Growing Colorado Gaming Market

Monarch Casino & Resort’s (NASDAQ: MCRI) eponymous gaming venue in Black Hawk, Colo. has established itself as the leader in that rapidly growing regional casino market.

Jefferies analyst David Katz said as much in a recent note to clients, observing that Monarch Casino Resort Spa “overshadows its competitors” in the Colorado casino town, commanding 30% market share. That jibes with commentary from management. Earlier this year, Monarch executives told analysts the company is adding market share in Colorado, particularly among mid- to high-tier bettors and there’s still ample room left to gain more share among VIPs.

We believe capital investments should generate stronger returns,” added Katz.

Assuming the estimate that the Monarch venue controls 30% of the Black Hawk market are accurate, that’s impressive because it implies that the remaining 70% is split among three competing venues. Those are each run by operators larger than Monarch — Bally’s, Caesars Entertainment, and Penn Entertainment.

Monarch Casino Important Driver of Black Hawk Growth

Monarch Casino’s namesake Black Hawk property is the freshest integrated resort in the town and one of the highest-tier casino-hotels in any of the three Colorado gaming towns. The operator spent more than $300 million to enhance the venue and those expenditures appear to be paying dividends, both for the operator and the city.

On Election Day 2020, Colorado voters approved Amendment 77. That set the stage for Black Hawk, Central City, and Cripple Creek gaming towns to ditch the prior $100 per hand cap on table game bets. Analysts believe the higher table limits will allow Black Hawk casinos to keep more local bettors in the town and away from Las Vegas, while potentially converting more day visitors into overnight guests.

The emergence of Monarch as the Black Hawk leader has had other benefits. Analysts previously cited Penn’s Ameristar has enjoyed some spillover perks from the Monarch property and Penn is enhancing that venue. Caesars rebranded its Black Hawk casino hotel with the venerable Horseshoe brand two years ago. That transition included a new exterior, refreshed guestrooms, and an enhanced gaming area.

Black Hawk Casino Jewel in Monarch Crown

Katz estimated that for this year, Monarch Black Hawk would generate almost $286 million in revenue compared to about $220 million at the Atlantis in Reno — Monarch’s only other venue.

By number of properties, Monarch is the smallest publicly traded casino operator in the US. Management has frequently said it’s considering expansion opportunities, but added it will not buy another casino simply to increase in size, underscoring it selectiveness in mergers and acquisitions.

Shares of Monarch are up 0.27% year-to-date and down 5.89% over the past 12 months.