The Kansas Star Casino has had to kick in an extra 2 percent in state taxes after exceeding $180 million in gambling revenue during its fiscal year of Jan. 1, 2012, to Dec. 31, 2012.
By topping that benchmark, the Mulvane casino is required by its contract to pay the state 24 percent of its gambling revenue instead of the 22 percent mandated by law. The 2 percent bump means the casino has paid $63,998 in additional taxes to the state since December 2012.
The contract requires another 2 percent increase, up to 26 percent, if revenues exceed $220 million in a fiscal year.
The Kansas Star has earned $241.6 million since opening in December 2011. It continued a strong 2013 by taking in $19 million in March, according to the Kansas Lottery. It earned $17 million in February and $16.4 million in January.
Boyd Gaming, which manages the casino, cited it on Wednesday as a factor for a rise in Boyd’s net revenues during the first quarter. The Las Vegas-based company reported revenues of $737 million for the quarter, up from $633.1 million in the same quarter last year, a 16.4 percent increase. The company’s stock rose more than 22 percent in trading Wednesday.
During a conference call with investors, Paul Chakmak, Boyd’s chief operating officer, said the Kansas Star generated “solid revenue growth” since it opened its permanent casino in December with new food and beverage amenities.
He also said that while its operating margins remain the highest in the company, “they were impacted in the first quarter by higher expenses associated with these new amenities, as well as increased marketing expense. Marketing spend was unusually low during Kansas Star’s introductory period in early 2012, and this quarter’s results reflect more realistic customer reinvestment levels.”
Chakmak said the Kansas Star remains on track to generate about $100 million annually in earnings before interest, taxes, depreciation and amortization.
He also said visitation should grow when the casino opens its arena in late June with seating for more than 6,000 people. An arena of that size “can generate significant customer traffic,” he said, citing as an example the Orleans Hotel and Casino – Boyd’s largest casino in Las Vegas – which has an arena with seating for up to 9,500 people.