Slot maker: Las Vegas’ gaming recovery may be slower than elsewhere
The gaming recovery will come to Las Vegas. It just may happen elsewhere first.
So predicted David Lopez, the president and CEO of PlayAGS, a Las Vegas-based gaming equipment supplier, on Thursday afternoon. Lopez told investors on an earnings call he anticipates tribal casinos and gaming operators in other parts of the country could rebound this year to purchase gaming equipment. Las Vegas, however, “is going to be a little bit slower.”
“We know that Vegas will very likely be the ones to be at the tail end of this recovery,” Lopez said, “but generally speaking, we can feel the momentum across the board.”
The pandemic hit hard PlayAGS’ biggest customers — casino operators — and in turn hurt the company’s own business in 2020, the company reported Thursday.
PlayAGS reported about 45 percent less revenue in 2020 than it did in 2019 — $167 million down from $304.7 million. The company generated $46.6 million in revenues over the last three months of 2020, or $31.2 million less than its $77.8 million during the same period in 2019. Net loss ballooned from $11.8 million in 2019 to $85.4 million in 2020.
Yet company executives see reason for optimism this year, particularly in late 2021. Chief Financial Officer Kimo Akiona said the manufacturer expects demand for new electronic gaming machines, its largest business segment, to improve throughout 2021, “with total unit sales weighted to the back half of the year.”
“We believe ongoing vaccination efforts, additional fiscal stimulus, and the potential for gradual easing of COVID-related operating restrictions could enhance the vibrancy of casino operators, businesses, and in turn, support the recovery within our product sales and recurring revenue segments,” Akiona said.
Shares of PlayAGS, traded as AGS on the New York Stock Exchange, closed at $8.04, down from $8.35 at opening.
Contact Mike Shoro at mshoro@reviewjournal.com or 702-387-5290. Follow @mike_shoro on Twitter.