TNA - Evergreen Gaming

[lessthaniv]

Hi Deleuze68,

 

Yes, I agree with you. Not sure what the status is but it would make sense that if you’re going to make a move into Washington you’d want some of the premier assets there. In the mean time this little business just continues to produce free cash flow.

 

<IV

[Foreign Tuffett]

First of all, congrats to lessthaniv on what looks to have been a pretty epic trade for him.

 

I finally got around to looking into this. I was close to pulling the trigger, but then I stumbled across the following, which I am just going to copy-and-paste from my notes:

 

* $400M new Emerald Queen tribal casino is scheduled to open in 12/2019. It is only ~10 minutes away from TNA's two Lakewood, WA properties (which are literally right next door to each other)

 

* Tribal casinos in Washington state have significant structural advantages over card rooms. Tribal casinos (1) operate under a more favorable tax regime (2) can offer slot machines, dice games, and roulette, and (3) allow gamblers to smoke

 

I suspect this is why management (apparently) wants to sell the company: two of their four properties are less than 1 year away from having a vastly superior property, operating under a looser regulatory regime, set up shop literally right down the street.

 

Checking back in with this one after 15 months. Time flies!

 

* $400 million "Emerald Green" tribal casino is finally opening on June 8th. Originally set to open in December 2019, things were delayed to this March, and then COVID hit. Like I mentioned above, this is only about a 10 minute drive from two of TNA's properties.

 

* Per May 1st filing, whatever drawn out discussions TNA was having about selling itself are now, at least temporarily, off the table.

 

* MD&A for last year:

 

"Results for the quarter ending December 31, 2019 included a decrease in income before taxes of

approximately $650,000. Table game drop decreased by $3,208,941, with a slight decrease in hold of

about 1%, which lowered gaming revenues by $1.2 million when compared to the previous quarter. Both

reductions resulted primarily from a decrease in the hold from Baccarat and the aggressive marketing

programs of a new competitor."

 

It is unclear to me who the "new competitor" is since, as stated above, the Emerald Green property still hasn't opened. If anyone knows feel free to chime in.

 

* Late in filing Q1 financials

 

* New Chairman