Mountaineer earnings report not all bad

NEWELL–Hancock County’s largest employer continues to struggle financially, although company officials sounded a slightly positive note on Thursday.

Net revenue at Mountaineer Casino, Racetrack & Resort dropped by 9.2 percent in the third quarter of 2016, compared to the same time last year, parent company Eldorado Resorts Inc. reported.

For the year to date, Mountaineer’s net revenue was down by 13.7 percent compared to last year, the Reno, Nev.-based company said.

Eldorado officials attribute Mountaineer’s lackluster performance to a combination of factors, including the countywide smoking ban that went into effect in July 2015 and the increase in competition from casinos in Ohio and Pennsylvania.

In a conference call on Thursday, Eldorado President Thomas Reeg said Mountaineer’s adjusted earnings, although down for the third quarter, showed some improvement over the course of October.

“Generally speaking, it has been getting better over the last four months,” he said. “The fruits of our efforts in terms of right-sizing our property should allow us to post a stable, if not a growing, EBITDA.”

The third-quarter report differentiates between cash revenue (net revenue) and adjusted EBITDA (revenue minus expenses). EBITDA stands for earnings before interest, taxes, depreciation and amortization.

According to the report, Mountaineer’s net revenues in the third quarter declined from $40.4 million in 2015 to $36.7 million in 2016. Mountaineer’s adjusted earnings in the third quarter dropped 38.7 percent, from $6.4 million in 2015 to $4.0 million in 2016, the report said.

Year-to-date adjusted earnings dropped 40.1 percent, from $18.6 million to $11.1 million, the report said.

“Mountaineer had a difficult quarter,” Reeg said. “This has clearly been a drag on our results this quarter. However, I’m happy to report that in October … Mountaineer’s EBITDA was up year-over-year. That’s the first month that’s happened since we acquired Mountaineer.”

Mountaineer was acquired by Eldorado through a merger with MTR Gaming Group Inc. in September 2014.

Other recent indicators have pointed to continuing problems for Mountaineer.

The West Virginia Tourism Commission recently postponed action on a $175,000 matching grant request from Mountaineer for a marketing campaign. Commissioner Joseph Manchin IV, son of U.S. Sen. Joe Manchin, explained the unusual action by saying that Mountaineer seems to be “in a holding pattern” or worse.

In a presentation to the Hancock County health board in October, former MTR Gaming Group CEO Ted Arneault said Mountaineer had lost an estimated 250 to 300 jobs since earlier this year. Eldorado has not made any official announcements about layoffs.

Arneault has been promoting the sale of approximately 1,500 surplus acres belonging to Mountaineer and wants the health board to exempt video lottery licensees such as Mountaineer from the smoking ban.

As recently as 2013, Mountaineer employed between 1,270 and 1,300 people and described itself as in the midst of a hiring boom. The Mountaineer website currently lists eight job openings, including a sales tour and travel coordinator, mechanic, cocktail server, director of food and beverage, security guard and valet attendant.

In July, Reno native Gregg Carano, son of Eldorado founder Don Carano, was named general manager of Mountaineer, replacing Chris Kern.

In remarks to Hancock County commissioners in August, Carano said, “I’m excited. I’ve called Mountaineer the jewel on the river. I don’t know if anybody else has used that, but I truly believe it is. We understand what Pennsylvania and Ohio and the smoking ban have done to our business, but our No. 1 focus is to raise revenues for our county and our casino.”