LAS VEGAS — The owner of the riverboat casino in East Peoria has unveiled plans to expand into the business that has most threatened its revenue stream in the last few years — the legal video gambling machines now in nearly every bar and restaurant.
Boyd Gaming Corporation on Tuesday announced a definitive agreement to acquire Lattner Entertainment Group for $100 million, gaining nearly 1,000 machines in 220 locations across the state. The announcement did not indicate where in the state those machines are.
"The acquisition of Lattner is a strategic opportunity to further diversify and expand our business," Keith Smith, president and chief executive officer of Boyd Gaming, said in a release. "Lattner will provide us a valuable new avenue to access gaming customers, and a platform to participate in the expansion of distributed gaming. We are excited to welcome the Lattner team to Boyd Gaming, and look forward to establishing ourselves as one of the leading distributed gaming operators in the country."
The deal is expected to close by the end of the second quarter. Las Vegas-based Boyd owns or operates 24 gaming entertainment properties in seven states, covering 1.36 million square feet of casino space, more than 30,000 gaming machines, 630 table games, 9,400 hotel rooms and 280 food and beverage outlets.
The legalization of video gaming in bars and restaurants in Illinois has corresponded with a significant decline in casino revenue throughout the state, according to the Illinois Gaming Board. The amount of money flowing through Boyd's central Illinois casino, Par-A-Dice Hotel & Casino on the Illinois River in East Peoria, has fallen more than 30 percent since the first legal video gambling terminals were activated.
The Illinois Gaming Board's annual reports show casino adjusted gross receipts statewide peaked in 2007 at just short of $2 billion. Despite the addition of a 10th casino license in 2011, the annual amounts were decreasing before video gaming came online at the end of 2012. Competition accelerated the decline.
In 2013, the first full year of legal video gambling terminals operating at bars and restaurants, the adjusted gross receipts from all 10 casinos diminished to about $1.55 billion. The video gaming system was still being rolled out, with 13,374 active machines in 3,271 locations by the end of the year generating a total net income of $300 million.
The number of active video gaming machines has more than doubled since then — to 28,271 terminals at 6,359 establishments in 2017, more than quadrupling annual net income to $1.3 billion. Casino adjusted gross receipts, meanwhile, declined to $1.41 billion for the year.
The total adjusted gross receipts at Par-A-Dice Casino followed the statewide trend, declining from just more than $107 million in 2013 to less than $79 million in 2017. The decline is more pronounced when compared to the last year of adjusted gross receipts without competition from a mature video gambling system: about $116 million in 2012, representing a decline of nearly 32 percent when compared to the most recently available figures.
Matt Buedel can be reached at 686-3154 or firstname.lastname@example.org. Follow him on Twitter @JournoBuedel.