Monarch Casinos Could Wear Colorado Crown if Table Limits Are Boosted
Posted on: October 26, 2020, 09:36h.
Last updated on: October 26, 2020, 12:54h.
On Election Day, Colorado voters will consider a ballot referendum that, if approved, will allow casino operators there to offer expanded table games while removing the $100 per bet limit. The moves could benefit an array of companies, including Monarch Casinos (NASDAQ:MCRI).
Regional operator Monarch owns just two gaming venues — the Atlantis in its home market of Reno, and the Black Hawk in the Colorado municipality of the same name. The company is currently in the midst of a massive expansion of the latter that’s expected to make the property one of the premier destinations in that town.
In Black Hawk, table games comprise about 15 percent of total gross gaming revenue (GGR),” according to Union Gaming research. “This compares to other comparable gaming states and regional markets where table games average over 27 percent of GGR.”
Union Gaming added, “This delta represents a $100 million-plus opportunity” in just table games GGR. Union Gaming says the opportunity for Monarch is “significant” as it ramps up its newly refurbished Centennial State venue.
Marvelous for Monarch…if it Passes
Amendment 77, the referendum Colorado voters are considering, not only removes the $100 per bet cap on table game wagers, but it also expands offerings. Table games currently allowed at the state’s casinos include blackjack, craps, poker, and roulette.
If Amendment 77 passes, baccarat could make its way to the gaming towns of Black Hawk, Central City, and Cripple Creek. For operators like Monarch, there are other potential benefits to the ballot proposal. For example, Union Gaming believes upping the bet limit could lead to “complimentary slot play and increased ancillary non-gaming revenue.”
The Centennial State has a recent, documented history of success with gaming-related political initiatives. In 2019, the table game bet limit was $5 before jumping to $100. Last November, voters there approved sports wagering.
Assuming Amendment 77 is approved, the next hurdle is residents in the three aforementioned casino towns voting in May 2021 to remove the betting cap and add other table fares. Market observers speculate that by removing the wager limit, more Colorado gamblers will stay at home rather than going to states such as Nevada and South Dakota, thereby generating more revenue for the state.
Monarch: Big Winner
Colorado is an $840 million gaming market, with $620 million of that figure generated in Black Hawk, according to Union Gaming. The state’s roster has a long list of well-known operators in addition to Monarch, including Caesars Entertainment, Century Casinos, and Penn National Gaming. But the research firm sees the Black Hawk operator as the biggest winner if Amendment 77 passes.
“Of all these companies, MCRI would be the biggest beneficiary, as we estimate more than half the company’s cash flow would come from the Black Hawk when it fully opens its expanded casino and new hotel,” said Union Gaming.
Elevated betting limits and more table offerings could lure a higher-end clientele to Colorado casinos and lead to more overnight stays, boosting hotel revenue for operators.
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