Boyd highlights the planned sale of FanDuel shares and emphasizes the company's robust presence in regional and Las Vegas markets catering to local crowds.
Boyd Gaming Posts Strong Q2 Earnings, Announces FanDuel Sale
In a significant move, Boyd Gaming has announced the sale of its 5% stake in FanDuel Group to Flutter Entertainment for $1.755 billion in cash. The transaction, expected to close within several weeks, will see Boyd Gaming using the proceeds to pay down debt and invest in attractive and higher returning opportunities.
The company's President and CEO, Keith Smith, stated during the earnings call that the FanDuel transaction is not a precursor to another transaction. He urged analysts to focus on the second quarter results rather than the FanDuel sale.
The second quarter results showed revenues and adjusted earnings growing 4%, with the Las Vegas locals segment leading the way. This segment achieved its strongest quarterly growth in over two years, with revenues up 3.2% and segment margins nearly hitting 50%. In contrast, revenue from downtown Las Vegas (part of the Strip-related market) declined by 11.9%, and the wider Strip area has experienced softer demand trends.
The Orleans west of the Strip, a property that relies on tourists, struggled the most during the second quarter. However, Boyd Gaming saw a pickup in unrated business during the quarter, with customers staying closer to home, including at regional properties. This trend was particularly noticeable in the Midwest & South segment, which saw revenue and adjusted earnings of more than 3%, marking the highest quarterly revenue and adjusted earnings in nearly three years.
Under the revised market-access agreements with FanDuel, Boyd Gaming expects its online segment to generate $50 million to $55 million in operating income and adjusted EBITDAR for the full year 2025 and about $30 million in 2026. The deal extends market-access agreements for mobile sports betting and online casinos through 2038. Boyd Gaming will take back operation of its retail sportsbooks outside of Nevada in 2026.
Smith expressed his satisfaction with the company's financial position, stating that Boyd Gaming is in a stronger position to continue its strategy. He also mentioned that the stock price hasn't reflected the "true price" for the investment.
In downtown, revenue and adjusted earnings were up more than 1% over the first six months of 2024. Flutter and FanDuel have created tremendous value for themselves and Boyd Gaming, according to Smith. The company's steady pricing and improved play among local customers contrasted with the softer tourist demand impacting the Strip properties, leading to stronger revenue and earnings growth in the locals segment than in the Strip segment during Q2 2025.
Overall, Boyd Gaming reported total Q2 revenue of approximately $1.034 billion, up 7.1% year-over-year from $967.5 million, and net income increased to $150.4 million from $139.8 million. The company's strong operational performance, particularly in the locals segment, contributed to these impressive figures.
- The proceeds from Boyd Gaming's sale of its 5% stake in FanDuel Group will be used to invest in finance opportunities that promise higher returns.
- Boyd Gaming's revenue from its casino-and-gambling segment, such as FanDuel Group, contributes significantly to the company's earnings, as evidenced by the strong Q2 results.
