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Soft top line but very good cost controls. Comments on April softness and apparent low enthusiasm for REIT spin were only conference call negatives vs investor expectations.


  • Belterra Resort:  continue to improve facility; very competitive part of country
  • Belterra Park:  within 60 mins of Belterra Resorts
    • F&B offerings received well
  • 2 primary goals:  Revenue synergies, marketing expense discipline
  • New myChoice program:  Owner's club positive response 80%, ASCA guests positive response 86%
  • 2 St. Louis properties will be connected by loyaty card program by end of June 
  • Trip frequency continue to decline, while spend per trip increased 6% YoY
  • Bad weather impacted 1Q
  • Markets with new competition:  double digit declines in trips
  • Bossier/Southern Indiana - particularly tough environment due to competition
  • Marketing reinvestment as a % of GGR:  down 380bps YoY
    • Rightsized media spend; 
    • no more launch mode out of Baton Rouge
    • Eliminated low margin programming
  • ASCA Black Hawk:  made adjustments to reinvestment that led to 28% decline in marketing spend and 11% EBITDA improvement YoY; also implemented improved hotel yield system earlier in April 
  • St. Louis
    • River City:  all-time high revenues in March
    • ASCA St. Charles:  had benefit of entire quarter with new hotel yield system; Early results are positive with a 5% increase in RevPAR and healthy increases in hotel cash revenue.  Combined both properties increased market share by over 200 points during 1Q
  • East Chicago:  highest table game share since 2011 due to increased programming; slot share increased as well
  • Vicksburg:  Heartland Poker Tour contributed to highest table share ever at 65%
  • Impact of Winter weather on 1Q EBITDA:  $5m (most felt in Midwest)
  • South segment demand performed better than Midwest
  • Broad softness in visitation in April:  Easter holidays usually softer week.  Spring Break softness but more encouraged in the past week as business picked up.  
  • Another record cash flow quarter at Baton Rouge
  • myChoice at ASCA integration for 2014 and portion of 2015:  upfront aggregate non-recurring charge of $5m
  • Synergies:  $53m as of Q1 2014 - includes $5m cost related synergies and  $11m of cost avoidance (healthcare benefit cost); expect more synergies ahead
  • Belterra Park opening this weekend alongside Kentucky Derby
  • Revamped New Orleans hotel will open this summer
  • Paid down $260m in term loans; completely paid down term loan B1 loan; term loan B2 now under $1bn
  • REIT comments:  
    • Appreciate shareholder feedback
    • REIT idea not new idea
    • Currently focused on successful ASCA integration
    • Will evaluate ways to enhance shareholder value

Q & A

  • Corporate expense: $20m per quarter, good run rate
  • Softness in beginning of April but encouraged by launch of myChoice on ASCA side (10 days into April)
  • Have not seen increased promotional activity in Belterra market
  • ASCA legacy properties:  promotions steady
  • Marketing efforts done extremely well.  Not focused on mass market guests (promotional business)
  • NY:  not focused on specific region.  cash-on-cash return: minimum of 15% required;  will explain on 2Q CC if they decide to move forward from June 30 deadline
  • Delevering a priority
  • Level of future reinvestment:  early in the program in understanding sweet spot of where marketing reinvestment % should be 
  • Japan: not interested