MTR Gaming Group, which cut jobs and corporate expenses in the past year, released improved financial results for the second quarter of 2009 and said it’s poised for growth in Ohio, where racetrack video lottery terminals have been authorized.
The company, which owns Mountaineer Casino, Racetrack & Resort in West Virginia, Presque Isle Downs & Casino in Pennsylvania, and Scioto Downs in Ohio, reported net income of $352,000 for the second quarter compared with a net loss of $2.3 million for the same three months of 2008. During the second quarter of 2009, corporate operating expenses decreased 24% to $2.3 million, compared with $3 million in the second quarter last year as a result of what the company called “cost containment efforts.”
Earnings before interest, taxes, depreciation, and amortization from continuing operations came in at $19.9 million, up 10%, compared with $18 million in the second quarter of 2008. The 2009 figure came after the company spent $350,000 on lobbying in Ohio and $167,000 on severance packages.
Officials attributed the improvement in EBITDA to cost containment—close to 200 jobs were lost at Mountaineer alone—a shift in marketing strategies, and improved operating performance at Mountaineer and Presque Isle.
Net revenue at Mountaineer dropped 4% to $72.2 million compared with $75.4 million for the same period last year. Specifically, revenue from VLTs decreased about $1.6 million from the second quarter of 2008, but revenue from table games increased $700,000, the company reported.
Officials said the drop in VLT revenue wasn’t unexpected given competition from The Meadows Racetrack & Casino in nearby Pennsylvania and a weak economy.
At Presque Isle, net revenue dropped 2% to $47.8 million for the quarter compared with $48.9 million last year.
“We are pleased that our cost-containment efforts resulted in another 10% increase in EBITDA,” MTR Gaming president and chief executive officer Robert Griffin said in a statement accompanying the earnings report. “Further, we are very happy with (Democratic Gov. Ted Strickland’s) recent approval of video lottery terminals at Ohio racetracks.
“In addition, we are preparing to take advantage of the approved non-taxable promotional credits, or free play, in West Virginia starting in September 2009. We believe that free play will position Mountaineer to compete more effectively in the expanding Ohio Valley market.”
Scioto Downs, located in Columbus, was purchased by MTR Gaming earlier in the decade on the chance Ohio would legalize gaming. The harness track is located on largely undeveloped acreage just south of Interstate 270 about three hours west of Mountaineer.
Scioto will get VLTs under Strickland’s directive pending resolution of legal challenges. Griffin told the Columbus Dispatch Aug. 12 the company will make its initial $13-million license fee payment by the Sept. 15 deadline imposed by the governor.
“We will now turn much of our attention toward Ohio, where the company is well-positioned to leverage the new gaming initiative put forth by Gov. Strickland,” Griffin said. “We are very excited about this new growth opportunity for MTR Gaming.”