Strength in the Las Vegas Locals market propelled Red Rock Resorts to a record third quarter for revenue and adjusted earnings. Stephen Cootey, the company’s executive vice president and chief financial officer, said Red Rock approached its historical adjusted earnings margin in the quarter.

“Durango continues to grow the Las Vegas locals market, as the team executes and improves the property’s operational performance, while at the same time driving incremental play from our existing customers and attracting new customers to our brand,” Cootey told Wall Street analysts Thursday.

During the three quarters of 2024 after opening in December, the Durango increased visitation and net theoretical win in the surrounding area by 91% and 92%, respectively, while signing up more than 70,000 new customers to the database, Cootey said.

“Durango is on track to become one of our highest-margin properties and generate a return of 15% net cannibalization through its first year of operation,” Cootey said. “Cannibalization remains in line with our expectations, as impact is primarily felt at our Red Rock property. We promised 10%, so if you do the math of a $800 million cost, it’s implying $120 million net of cannibalization. When you apply the impact of cannibalization, you get the core portfolio down low single digits in terms of revenue.”

Cootey said they will backfill the Red Rock property, given the strong growth of a higher-end demographic in the Summerlin area. They expect 34,000 new households at final build out.

The Durango expansion of $116 million is on tap for the end of the year to add 25,000 square feet of additional casino space, including a new high-limit slot and bar area. The expansion will add 230 slot machines to the floor, including 120 for the high-limit room.

A 2,000-space parking garage will also be added that will provide flexibility for future expansion, Cootey said. The project is expected to take 12 months to complete. There will be some disruption to the south side of the property.

Cootey said they continue to see strong visitation and carded slot play in the majority of their database, including their regional and national segments. The strong spend-per-visit allowed the operator to earn near-record revenue and show profitability across gaming segments.

The hotel and food and beverage segments continued to grow and delivered record revenue and profitability in the third quarter. The hotel division had an all-time record of revenue and profit with the addition of higher room rates. Group business, however, faces tough year-over-year comparisons, both the third and fourth quarters.

“As we look forward to the fourth quarter, other than playing unlucky in sports in October and soft business in group and catering lines, we’re seeing strength and stability in our core slots and table business in the locals market and in our carded database,” Cootey said.

When it comes to group bookings and catering, Red Rock President Scott Kreeger added that the operator will have tough year-over-year comparisons in the fourth and first quarters, because of the Super Bowl in February. Beyond that, it will improve through the rest of 2025 and 2026.

“The Super Bowl was a huge benefit to the overall city and we benefited from that as well,” said board member Lorenzo Fertitta. “We actually lost money on the game and hopefully, that won’t be a headwind to be repeated from a comp perspective. Historically, we would win money, but that last drive (when the Kansas City Chief scored a touchdown to win in overtime) cost us.”