Boyd Gaming's Las Vegas EBITDAR Falls 7.4% as Destination Softness Hits the Orleans and Downtown

Boyd Gaming's group earnings barely moved in the third quarter, but its two Las Vegas segments lost $8 million of EBITDAR between them while its locals and regional casinos grew. Management says August was the weakest month.

• Boyd Gaming reported third-quarter revenue of $990.5 million, down 1.4%, Adjusted EBITDAR of $319.6 million, down 0.7%, and net income of $124.9 million, or $1.71 a share
• Las Vegas Locals EBITDAR fell 5.1% to $87.4 million and Downtown Las Vegas EBITDAR 20.3% to $12.9 million, which Boyd puts down to softer destination business, mainly at the Orleans, and to storms and higher airfares in Hawaii
• Excluding the Orleans and the Suncoast, Boyd says its locals casinos grew revenue and EBITDAR by 3%, and Midwest & South EBITDAR was flat at $201.6 million even as Louisiana casino revenue fell 6.4% in August
• Online EBITDAR rose 15.9% to $10.9 million and Boyd bought back $164 million of shares
• August figures from the Las Vegas Convention and Visitors Authority (LVCVA) showed visitors down 4.3% and Downtown hotel occupancy down 9.2 points

The Locals Customer Held Up and the Visitor Did Not

Boyd Gaming Corporation (NYSE: BYD) reported on 22 October. Third-quarter revenue was $990.5 million, against $1.0 billion a year earlier, and Adjusted EBITDAR was $319.6 million against $321.8 million, according to its earnings release. Net income of $124.9 million, or $1.71 a share, compares with $1.44 billion, or $17.81, a year earlier, when Boyd booked a $1.4 billion after-tax gain on its FanDuel stake. Adjusted earnings fell 12.6% to $121.7 million, but adjusted earnings per share fell only 2.9%, to $1.67, because the diluted share count fell from 80.9 million to 73.0 million.

Chief executive Keith Smith said in the release that results were "impacted by increased softness in destination business to Las Vegas, primarily affecting our Orleans property." Las Vegas Locals revenue fell 1.6% to $207.4 million and EBITDAR 5.1% to $87.4 million. Downtown Las Vegas revenue fell 10.9% to $47.4 million and EBITDAR 20.3% to $12.9 million, which the release puts down to destination softness, storms in Hawaii and higher airfares. Together the two segments made $100.2 million of EBITDAR, down 7.4%.

Excluding the Orleans and the Suncoast, which was under renovation, Boyd says its locals casinos grew revenue and EBITDAR by 3%, "highlighted by increased play from southern Nevada residents." Midwest & South revenue edged up to $540.5 million and EBITDAR was flat at $201.6 million, nearly 59% of segment EBITDAR. Adjusting for the closure of Sam's Town Tunica in November 2025, the sale of Sam's Town Shreveport to Bally's Corporation in August for an undisclosed price, and higher property taxes at Kansas Star, Boyd says segment revenue grew nearly 3% and EBITDAR about 2.5%.

What Management Said on the Call

On the call, according to a transcript published by The Motley Fool, Smith said July "looked okay", August "was probably weaker than we anticipated" and September was a little better. He said the Orleans has had more than 300 rooms out of service every day for a year, with the remodel of its 1,800 rooms due to finish in November. Chief financial officer Josh Hirsberg said Boyd does not expect the third quarter's level of destination weakness to continue into the fourth, and that Las Vegas Locals EBITDAR could see modest growth next year.

Boyd agreed in July 2025 to sell its 5% FanDuel stake to Flutter Entertainment for $1.755 billion and replaced its market-access agreements with new ones running to 2038, with a fixed fee per state, according to its announcement at the time. Online revenue fell 6.7% to $154.5 million because online reimbursements, booked as both revenue and cost, fell from $138.7 million to $121.2 million. Online EBITDAR rose 15.9% to $10.9 million, which Smith attributed to Boyd Interactive, its online casino business. Managed & Other EBITDAR rose 13.3% to $29.8 million on higher fees from Sky River Casino in California.

Boyd returned nearly $180 million to shareholders: $164 million of buybacks and $15 million of dividends, with $387 million left under its authorisation. Hirsberg said Boyd still targets about $150 million of repurchases a quarter and now expects about $650 million of capital spending in 2026, including $275 million for its Norfolk, Virginia, resort, which Smith said is on budget for a November 2027 opening. Boyd ended the quarter with $297.2 million of cash, $2.7 billion of debt and, according to Hirsberg, leverage of 2.2 times.

The Las Vegas Problem Is a Visitor Problem, Not a Locals Problem

The LVCVA's August data supports Boyd's account: visitor volume fell 4.3% to 3.03 million and air passengers fell 9.2%, though the LVCVA notes that Labor Day weekend largely fell in August last year. Downtown hotel occupancy fell from 62.2% to 53.0% and Downtown gaming revenue fell 3.0%, while Boulder Strip gaming revenue, a locals-heavy area, rose 17.4%. Residents are spending, and the properties that rely on visitors are not. Hirsberg's expectation of a better fourth quarter is untested: September figures are not yet out, and air passengers were down 7.1% for the year to August. Las Vegas Sands, whose third-quarter EBITDA fell 17% this week, now earns its money in Macao and Singapore, so the closer comparison is locals rival Station Casinos, which has yet to report and closed a $500 million incremental term loan on 21 October to repay revolver borrowings, according to a Red Rock Resorts filing.

Online Is Now a Small, Steady Line

Boyd's nine-month Online EBITDAR was $29.9 million, against $55.0 million a year earlier, mostly earned under the old FanDuel terms. That already matches the roughly $30 million Boyd projected for all of 2026 when it announced the sale, and Hirsberg told analysts to look at the high end of the guidance ranges for Online and Managed. Online is now about 3% of segment EBITDAR. The sale turned a stake into cash and left a digital business, part FanDuel fees and part Boyd Interactive, that grows but does not move the group's results.

The Share Count Is Doing the Work That Earnings Are Not

Adjusted EPS fell less than 3% against a 12.6% fall in adjusted earnings only because there are about 10% fewer diluted shares than a year ago. That works while free cash flow covers both the buyback and $650 million of capital spending, and at 2.2 times leverage there is room; Hirsberg said Boyd expects to refinance its December 2027 maturity by the first half of 2027. If destination softness lasts into 2027, though, it will show in per-share figures as well as at the Orleans.

Boyd's diversification did its job this quarter: Midwest & South and the southern Nevada resident made up for the visitor who stayed away. Whether August was the low point will be clearer once September's visitor numbers and Boyd's fourth quarter are out.