Eldorado Resorts, Inc. operates as a casino entertainment company. It engages in gaming operations, and manages hotels, restaurants, bars, racing, retail shops, and other services. It operates through the following segments: West, Midwest, South, East, and Central. The West segment consists of seven properties in Nevada and Colorado. The Midwest segment comprises of dockside and land-based casinos in Iowa and Missouri. The South segment includes dockside casinos in Louisiana and Mississippi, and racino in Florida. The East segment is involved in the operation of racinos located in Pennsylvania, Ohio, and West Virginia; and casinos in Pennsylvania and New Jersey. The Central segment is composed of properties in Indiana, Illinois, and Missouri. The company was founded by Donald Louis Carano in 1973 and is headquartered in Reno, NV.
Our business is sensitive to reductions in discretionary consumer spending as a result of downturns in the economy and other factors outside our control
Some of our casinos are located on leased property. If we default on one or more leases, the applicable lessors could terminate the affected leases and we could lose possession of the affected casino.
We have partnership agreements to expand our sportsbook business and engage in online sportsbook, casino gaming and poker. There can be no assurance that regulations authorizing such activities will be approved in the jurisdictions in which we operate or that the market for such gaming activities will develop as expected.
We rely on our key personnel and we may face difficulties in attracting and retaining qualified employees for our casinos and race tracks
Work stoppages, organizing drives and other labor problems could negatively impact our future profits
An earthquake, hurricane, flood, other natural disaster, act of terrorism or other casualty events could adversely affect our business and we may not have sufficient insurance coverage to cover such losses
Our reliance on our computer systems and software could expose us to great financial harm if any of our computer systems or software were subject to any material disruption or corruption.
We are or may become involved in legal proceedings that, if adversely adjudicated or settled, could impact our business and financial condition
Our information technology and other systems are subject to cyber security risk including misappropriation of customer information or other breaches of information security
Our operations have historically been subject to seasonal variations and quarterly fluctuations in operating results, and we can expect to experience such variations and fluctuations in the future
We may experience construction delays or cost overruns during our expansion or development projects that could adversely affect our operations
Our planned capital expenditures may not result in our expected improvements in our business
Our obligations under our indebtedness and Master Lease are significant
We may not be able to generate sufficient cash to service all of our indebtedness and pay rent under the Master Lease and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful
The market price of our common stock could fluctuate significantly
We have not historically paid dividends and may not pay dividends in the future
Operating Results. Including incremental Isle, Elgin and Tropicana net revenues totaling $575.5 million generated following their respective acquisition dates, net revenues increased 38.8% for the year ended December 31, 2018 compared to 2017. Excluding incremental Isle, Elgin and Tropicana net revenues, net revenues remained flat for the year ended December 31, 2018 compared to 2017.
Isle contributed $600.1 million of incremental net revenues from the date we acquired Isle on May 1, 2017 through December 31, 2017 consisting primarily of gaming revenues. Including these incremental net revenues, net revenues increased 64.4% for the year ended December 31, 2017 compared to 2016. Excluding these incremental net revenues, net revenues declined 2.2% for the year ended December 31, 2017 compared to 2016, primarily due to decreased revenues associated with severe weather during the first and third quarters of 2017.
For the year ended December 31, 2018 compared to 2017, operating income increased 227.1% mainly due to incremental operating income contributed by Isle, Elgin and Tropicana following their respective acquisition dates. Incremental operating income totaling $80.7 million represents operating income for four months of operations for Isle, five months of operations for Elgin and three months of operations for Tropicana. Excluding the incremental operating income, operating income rose 141.9% for the year ended December 31, 2018 compared to 2017 due to margin improvement resulting from synergies and departmental operating efficiencies, a $34.2 million decrease in impairment charges and a $71.9 million decline in transaction expenses. These increases in operating income for the year ended December 31, 2018 compared to 2017 were partially offset by higher depreciation associated with additional assets.