Monarch Casino & Resort (NASDAQ:MCRI) believes a recent vote in Colorado to eliminate table game wager limits is beneficial to the operator’s long-term prospects in the state.
On Election Day, Centennial State voters approved Amendment 77, which set the stage for the gaming towns of Black Hawk, Central City, and Cripple Creek to ditch the prior $100 per hand cap on table game bets. On Tuesday, the Black Hawk City Council approved an ordinance permitting no restrictions on bets placed on black jack, craps, roulette, and related fare.
We believe November’s statewide passage of Amendment 77 and the concurrent approval by the voters of the City of Black Hawk of the local ballot measure, followed by today’s City Council actions, represent a significant advancement for the entire Black Hawk gaming industry and the city’s long-term economic success,” said Monarch CEO John Farahi.
The Reno-based gaming company operates just two casinos — one in its home market, and an eponymous venue in Black Hawk, Colo.
Good Timing
Passage of Amendment 77 is fortuitous for Monarch, because it coincides with the operator’s phased rollout of its enhanced casino-resort in the Centennial State.
Prior to Election Day, analysts widely pointed to Monarch as a likely beneficiary of removal of the table game bet cap, noting that the new policy could lead to gamblers devoting more cash to higher margin slot machines while boosting their spending on beverages, dining, and entertainment.
Another benefit for gaming companies in the new Colorado law is that it provides for the addition of table games not yet available in the state. Centennial State casinos permit blackjack, craps, poker, and roulette. New casino games including baccarat, keno, and pai-gow tiles, along with many popular table game side bets, will be available in Black Hawk starting May 1, 2021.
Some analysts are hypothesizing that with Colorado adding games such as baccarat and pai-gow tiles, the state’s gaming properties will attract more Asian gamblers and a higher-end clientele. They are more likely to stay overnight rather than just pass through the casino towns.
“The changes to casino game regulations in Black Hawk will bring the city on par with other gaming destinations and greatly improve the attractiveness of our drive-to market for guests across the Front Range of Colorado,” said Farahi.
Bolstering Case for Regional Stocks
Combined with one of the fastest-growing sports betting markets in the country, Colorado’s plan to scrap table limits and add new games boosts Wall Street’s case that regional gaming equities are preferable over the near-term to those with heavy destination market exposure.
Monarch is operational in Colorado sports betting, and its sportsbook is independent. But the state revenue department doesn’t provide data on where operators rank, so it’s not clear how much sports wagering is contributing to the company’s top line.
Other Black Hawk operators include Bally’s, Caesars Entertainment, and Penn National Gaming.
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