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Question of the Day - 13 January 2020

Q:

It’s been about a year now since Boyd Gaming has reinvented their Player’s Club program. How has this affected their financials and stock prices?

A:

“In a nutshell, there were two major changes,” says Boyd spokesman David Strow: “a shift from three tiers to five (Ruby, Sapphire, Emerald, Onyx and Titanium); and the introduction of a number of new travel benefits for the higher tiers in the program, including trips to Las Vegas, Hawaii and the Bahamas, as well as free cruises through Holland America.” Other perks included “annual gifts of luxury jewelry and technology; and unique and memorable trips and experiences you can’t find anywhere else,” according to a press release.

Discounts were made available on buffets (never underestimate the importance of a discounted buffet), hotel rooms, retail and rentals at Advantage Rent-A-Car. Upon achieving a tier upgrade, a player keeps it through the next full calendar year. As of inception, on August 27, 2018, not all — but most — Boyd casinos had been integrated into the new plan.

That's the way Boyd explains it, anyway. We're sure we'll hear from video poker players who take some issue with the spin.

Such a revision wouldn’t show up in the share price, which tends to be more reflective of external events, such as an acquisition or bad weather in one of Boyd’s territories. Boyd stock prices have remained relatively stable, in the high twenties, notwithstanding a couple of spikes in February and April of last year. In his fourth-quarter 2018 earnings call, Boyd CEO Keith Smith acknowledged that “marketing refinements” had helped drive a 13% improvement in cash flow at the company’s Las Vegas properties. The launch of a redesigned B Connected program did, however, contribute to a $12 million increase in corporate costs. 

Boyd didn't break out discrete costs for the re-launch of B Connected, so we can only surmise what they were. However, as Las Vegas locals business continued to march upward, one should not discount the potential impact of the revamped loyalty program. Increased profit in the first quarter of 2019 was “driven by a robust regional economy and operational and marketing refinements.” Locals and downtown players continued to leave more money in the slots and on the green felt. 

Revenues, cash flows and operating margins posted further year-over-year improvements in the second quarter, even if Smith no longer spoke of marketing refinements. Cash flow from locals’ play was at its highest level in 14 years. It was much the same downtown, where heavy Hawaiian play led to sky-high results.

It's difficult to make apples-to-apples comparisons to Boyd’s Midwest/South segment, because the company had recently added Ameristar Kansas City, Ameristar St. Charles, Belterra Resort and Belterra Park (the former two in Missouri, Belterra Resort in Indiana and Belterra Park in Ohio) to its vast holdings.

By the third quarter of last year, it was apparent that the changes to B Connected, such as they were, weren’t putting off players, at least according to the P&L. Las Vegas locals generated the highest cash flow in that segment since 2005. Downtown results also continued to improve, which was pretty impressive when one considers the traffic disruption occasioned by construction of Derek Stevens’ rival Circa casino.

So no, other than all the grousing from video poker players, revamping B Connected has been nothing but a plus for Boyd — at least to the extent we're able to read between the quarterly-report lines.

 

It’s been about a year now since Boyd Gaming has reinvented their Player’s Club program. How has this affected their financials and stock prices?
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Comments

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  • Robert Jan-13-2020
    Boyd screws visitors
    We try to get to Vegas once or twice a year. If we don't we loose whatever points we have earned. When they made there big change I lost a considerable amount of points. In the future I will be giving my play to those who appreciate visitors.

  • rokgpsman Jan-13-2020
    B-Connected 
    Unless I'm mistaken there was a big change in how the Boyd Gaming B-Connected players club downgraded benefits for their Ruby card holder, the lowest tier level. The Ruby card holders don't get points like they used to, the occasional players and first-time players got shafted with the new program changes. Ruby players get "tier credits" for their play that are good toward advancing to the next higher tier (Sapphire) but they don't earn any points while they are at the Ruby level. The Ruby tier credits do not carry over from year to year, so many players never accumulate enough tier credits to advance to the next higher card, which means their play is pretty much not rewarded. That was a big downgrade for lots of players.

  • John Dixon Jan-13-2020
    No more Vegas
    As Vegas visitors for 30 plus years, and Boyd faithfuls for 20 plus years, we have probably sworn off the city as a whole. As I shared with our host...slots wayyyy to tight, table games decimated (Face Up Pai Gow?), airfares, car rental. It all is just too much. I can drive 2 hours on a day trip and have just as much enjoyment without the astronomical cost.

  • Jennifer Opitz Jan-13-2020
    See ya!
    Looks like Boyd properties have not been affected at all with their tier changes, and I guess unicorns do exist. I have kept my "sapphire" status and now receive absolutely NO comps, discounts etc for any property whether it be as an email notification or mailer. So as predicted the bottom line is that locals dictate how out of town players get treated...like pond scum.

  • galeekas Jan-13-2020
    Don't forget the senior day fiasco
    The destroyed young at heart program needs to be added to all of the other correct comments left so far. They virtually stripped every reason why a senior would even play there. Includes all food offers that mattered and an increase in movie prices. Go to station casinos on Wednesday if you want a great senior day. Hope they don't get greedy stupid. Movies still only $4 and free Starbucks. Life is good there! 

  • Bumbug Jan-13-2020
    They lost me
    I used to visit Boyd casinos in Vegas and the Treasure Chest Casino in Kenner, LA (New Orleans) but I haven't been to any of them since they changed the program. Since I'm not a frequent visitor (once a year in LA, usually twice in Vegas) I got very little before the change, but I could see that I'd get nothing with the new B Connected so I've shifted my business to casinos which seem to appreciate me more, especially those on the Gulf Coast. 

  • Ray Jan-13-2020
    Typical spin BS
    Of course their bottom line is up. They don't share the good with the low-level players. With all the other options we have, I can usually avoid Boyd. Maybe it's not so easy for locals.

  • AndyM Jan-13-2020
    Mixed results
    I revisited Boyd 6 months ago after getting ok to good comps. Live in Phoenix area and frequent Vegas often. And just jumped to Saphire level. After reading other post, looks like there not consistant with comps. And I learned the hard way with lost pionts too. I'm enjoying the extras for now. Keeping a buyer beware attitude and my head on swivel for better opportunities. 

  • Kevin Lewis Jan-13-2020
    Boyd of Paradise
    I love the language used. I guess we "reinvented" Hiroshima in 1945, too.
    
    I have set foot exactly once in a Boyd property since the Players Club Apocalypse. I played .25 video poker at Sam's Town for four hours. I earned ONE (1) tier credit. Pardon me while I die laughing.

  • Pamela Jan-13-2020
    Picture
    Isn't that a Stations card in the picture accompanying today's QOD?

  • Lea Wozniak Jan-13-2020
    Lea
    I too no longer go to Boyd properties. Visiting Vegas twice a year gives me no chance of getting other than Ruby level. We also have the Blue Chip casino (Boyd) in Indiana but that too is also an hours drive from me. I'll stick with the Indian casinos in Michigan that give me comps and free play monthly along with gits in their flyer. we also have the Blue Chip casino in Michigan City Indiana but that too is at least an hours drive from me.

  • Edso Jan-13-2020
    Boyd Casinos
    We really enjoyed playing at the Orleans for the comps and gifts, but the new changes to B-Connected and YAH, has kept us from playing too much there now.  We enjoy the comps and gifts at the Tuscany way better.  Yeah, the Orleans has a nice buffet, but Marilyn's Cafe at the Tuscany has great food and decent prices.

  • Ken Orgera Jan-13-2020
    B connected
    Bad for me, mainly a vp player. Was able to get Sapphire for first year but with 3 or 4 trips not feasible.  Remember they also increased their resort fees at the same time, that also helped the bottom line.  Their employees on the front lines think it was a bad move. But the unaccountable suits always survive. 

  • tgabrielli Jan-13-2020
    Done with Boyd
    I stopped frequenting Boyd properties a little over a year ago. The only visit I make there is to see a movie. I used to go to The Suncoast a lot (A LOT!!!!), but never again (never!). I had been an Emerald card holder for several years. And, believe it or not, while their restructuring of their B-Connected program had something to do with this, it wasn't the deciding factor. It was their attitude towards their client base, evident in the declining comps and treatment of frequent players. THAT was the deciding factor. So, I switched my play to the casino next door to them: The Rampart. Now, The Rampart knows how to treat and appreciate their customers. And, it's a nicer casino: it's cleaner and their restaurants are by far much better, as is the atmosphere. I feel like The Suncoast is being run by amateurs when compared to its neighbor.

  • Gregory Jan-14-2020
    Not so bad
    I used to play at Boyd pretty much exclusively and obtained Emerald status 2 years in row.  It was nice getting to the front of the line for the buffet.  Since they gutted the players club, I defected to El Cortez and they take good care of me.  4 nights, good free play and $100 food.  But, I can't seem to win there.  My game is $ VP.  On my Christmas trip I needed 100+ tier points to keep Sapphire staus at Boyd.   I thought this might be tough playing VP.  To my surprise not only did I get the points I needed to keep Sapphire for 2020, but I earned enough points to carry over a few extra into 2020.  Plus, I came out about $700 ahead by hitting a couple of $500 4OAKs on $ Treasure Chest VP.   I may give Boyd a second try in 2020.  If I concentrate all my play with them I might even be able to get to Emerald again.   I know that some will say that the pay tables aren't the greatest, but being from Minnesota, just about EVERY paytable in Vegas is an improvement over what we have here.

  • Gregory Jan-14-2020
    Not so bad
    I used to play at Boyd pretty much exclusively and obtained Emerald status 2 years in row.  It was nice getting to the front of the line for the buffet.  Since they gutted the players club, I defected to El Cortez and they take good care of me.  4 nights, good free play and $100 food.  But, I can't seem to win there.  My game is $ VP.  On my Christmas trip I needed 100+ tier points to keep Sapphire staus at Boyd.   I thought this might be tough playing VP.  To my surprise not only did I get the points I needed to keep Sapphire for 2020, but I earned enough points to carry over a few extra into 2020.  Plus, I came out about $700 ahead by hitting a couple of $500 4OAKs on $ Treasure Chest VP.   I may give Boyd a second try in 2020.  If I concentrate all my play with them I might even be able to get to Emerald again.   I know that some will say that the pay tables aren't the greatest, but being from Minnesota, just about EVERY paytable in Vegas is an improvement over what we have here.

  • Gregory Jan-14-2020
    Not so bad....
    I used to play at Boyd pretty much exclusively and obtained Emerald status 2 years in row.  It was nice getting to the front of the line for the buffet.  Since they gutted the players club, I defected to El Cortez and they take good care of me.  4 nights, good free play and $100 food.  But, I can't seem to win there.  My game is $ VP.  On my Christmas trip I needed 100+ tier points to keep Sapphire staus at Boyd.   I thought this might be tough playing VP.  To my surprise not only did I get the points I needed to keep Sapphire for 2020, but I earned enough points to carry over a few extra into 2020. Plus, I came out about $700 ahead by hitting a couple of $500 4OAKs on $ Treasure Chest VP.   I may give Boyd a second try in 2020.  If I concentrate all my play with them I might even be able to get to Emerald again.   I know that some will say that the pay tables aren't the greatest, but being from Minnesota, just about EVERY paytable in Vegas is an improvement over what we have here.

  • IdahoPat Jan-14-2020
    rokgpsman ...
    Your lowest level card in B-Connected requires just $750 coin-in on slots just to get to the next level, and $1500 for video poker. The theoretical loss on those amounts is roughly $60 and $45, respectively. We're not talking low-level gamblers, we're talking micro-level gamblers whose play barely recoups the costs of direct mail throughout the year.
    
    It's more than a low enough level to get people to the next level, and people who can't afford the expenditure to get to the next level either shouldn't be gambling, or will never develop into the kind of valued repeat customer casinos like to see.

  • rokgpsman Jan-14-2020
    IdahoPat
    I disagree and the large number of unhappy B-Connected players does too. By your reasoning a player should be happy paying the casino $45 for the "privilege" of getting a B-Connected Sapphire card so he can then begin to earn points and rewards on his gambling. What a concept - paying the casino a fee so you can gamble in their casino and earn rewards. Maybe Boyd Gaming should also charge us a visitor's fee to walk thru the front door? And there doesn't have to be any mailing costs for offers these days, any offers can be sent digitally in a variety of ways.

  • IdahoPat Jan-15-2020
    rokgpsman ...
    My numbers were off in what it took to get to the next level, and as such, I would say there's value in guests who reach the higher end of the lowest spectrum. Please disregard what I said initially.

  • Robert Hirst Jan-15-2020
    Boyd's No More
    Since we stopped playing at Boyd's we are President level at Stations and Diamond at Caesar's.  All the proof you need re: the depths of the new program is get a deal that says you need 10pts VP for a gift.  Go to the desk and ask how much you have to play to get 10pts...they have no idea and neither does the player.  We used to be regulars at GC and Orleans...those are not even on our list to consider anymore.

  • Tim Clark Jan-15-2020
    no one gives a hoot
    Was there last fall and all my points were gone from the spring. No one would or could give me an answer as why or wear they went. So Boyd you can suck it Stations here I come.

  • John Ursu Sr Jan-16-2020
    Take them for what I can get and then screw them.
    Other than using the coupons in the LVA and (possibly if what I read about the new Young At Hearts is correct) playing $5 bucks to get a free buffet, I will not patronize Boyd properties. If you only go once a year you lose your points. At the end of the year you get reset for your status(good news for those that manage to go from ruby to sapphire in late December). Also the figure of $1500 if playing VP to advance is not correct from what I have gathered. It is too little by at least half. Stations loves BConnected.

  • rokgpsman Jan-16-2020
    B-Connected
    It was a bad change for a lot of people that loved going to Orleans, Gold Coast, Sam's Town, Suncoast, etc. Many felt betrayed after all the years of being a regular customer. Boyd Gaming added some nice rewards to the high end of their player card system but it was done at the expense of all the loyal lower level players. Their system is setup to reward you only if you play a lot more than many people are used to playing. And for people that can only visit once or twice a year it can be hard to get any meaningful reward. I think Boyd forgot there are other good player's club alternatives in Vegas, and Station Casinos is one of them. Time and dollars will tell if they decide it was a mistake. Problem is that once people leave and get established elsewhere they may not want to return.

  • rokgpsman Jan-17-2020
    Earning B-Connected points
    This is from the B-Connected website:
    ............................................................
    EARNING B-CONNECTED POINTS
    
    Once you have achieved Sapphire status or higher you will start earning 
    B-Connected Points for your play. 
    
    Game Type --- How to Earn One B-Connected Point*
    
    Reels, Video Reels, and Keno........$1.00 Coin-In
    Video Poker & Multi-Games...........$2.00 Coin-In
    
    *Select earning rates may vary by property. See your property's B-Connected players club for details.

  • rokgpsman Jan-24-2020
    Boyd B-connected
    According to Boyd's website-
    To begin earning points on your players card you have to advance from Ruby level to Sapphire. The website says it takes 750 "tier credits" to get from Ruby to Sapphire. On slot machines you get 1 tier credit for every $5 of play. This means you need to run $5 x 750 = $3750 thru the machines to get the 750 tier credits. The casino edge on slot machines varies a lot, from about 6% on quarter machines to over 10% on penny machines (wizardofodds website). This means you will potentially/likely lose $225 to $375 (or more) of that $3750 in your play getting from Ruby to Sapphire. It's only then that you start earning points and rewards for your play. Tier credits get erased on Dec 31 and you have to start over on Jan 1st. Boyd won't say how many dollars of play it takes to get 1 tier credit on VP machines but you can bet it is more than the $5 slot machine requirement. Players used to get points from the minute they started playing, but not any longer. Bad deal.