Casino Valuation
I'm a beginner to real estate, so was wondering if anyone here could provide some basics on how to value a casino. Alternatively, are there any good resources on how to do so that I can read up on?
Thanks in advance.
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Haha, this just hit me the right way.
Sorry, no idea.
Its a business valuation through and through.
The hotel component would be valued like a hotel (revpar, NOI, etc), but the gambling portion would be valued as a business - would be much larger in value than the underlying real estate for sure, even if the real estate is held within the corp.
EV/EBITDA
check this shiz http://media.corporate-ir.net/media_files/IROL/84/84772/reports/S-4.pdf page 99.
Valuing a casino (Originally Posted: 10/01/2015)
What method do you use to value a casino?
Would it be incorrect to use a DCF? Why or why not?
Using DCF, precedent transcations, or comps are fine. As far as valuation goes most of the value from a casino is driven by location and demographics. Given that you are asking for an individual casino, and not a casino company, I am guessing it is a regional casino not in Vegas - in which case it is probably getting crushed right now.
Casino Valuation Issue (Originally Posted: 02/20/2015)
I'm trying to value Venetian Macao for practice, and I'm having some issues with revenue.
Their casino revenue for 2014 was 733.3. They had 2.61% rolling chip win % out of 10,098.7 rolling chip volume. They had 24.2% table game win % out of 510.0 table game volume. And they had 4.3% slot hold % out of slot handle of 1325.4
So shouldn't revenue just be 2.61% of 10098.7 + 24.2% of 510 + 4.3% of 1325.4?
Because when I sum those up (the volume from each type of game times the win/hold %) I get revenue that is ~10% higher, around 833 instead of 733. What is wrong? I'll attach what I have so far, but I just started with this (just look at segment details). Thanks!
Isnt "2.61% of 10098.7 + 24.2% of 510 + 4.3% of 1325.4" = 443.99 ? These numbers dont add up...
Guessing that there may be imbed costs such as promotions that are embedded within the revenue (reporting it net). I ran into a similar issue with a different Macanese casino as well.
Ah, I wrote it incorrectly in the OP. It should be 24.2% of 2107 not 510.
Anyway, I think Carnage is right. Looks like they less promotional allowances as part of "net revenues." A bit of mental gymnastics involved there but it adds up now.
Thanks!
Looks like you are missing another variable
It interesting to think about valuation of a casino.
But sorry, I have no idea how to do it
Worked at a boutique IB that focused exclusviley on gaming, need to know:
How many hotel rooms, occupancy, ADR, and F&B For the casino need to know how many slot machines, what the Win per unit is (WPU) and same for table games with WPU. Once you get those revenue drivers and relevant expenses, usually just a multiple based off of EBITDA.
thx
Would you just have to underwrite it like experiential retail and the casino is the tenant, or do casino owners usually own the real estate?
The casino will help you solve your financial problems. Maybe you need to consult with a financial advisor
Yes
Here I completely agree with you, but you also need to be able to choose slot machines and to do it correctly, I look at the reviews on the site https://cvasino.se/casinospel/bingo/ where there is a lot of useful information on this topic and the most popular gaming clubs on the Internet are analyzed.
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