Red Rock Resorts Holds to 20 Percent ROI Target on Durango Expansion After Cost Revisions

Red Rock Resorts posted the highest third-quarter revenue and second-highest profitability in its history. The parent company of Station Casinos recorded net revenue of $479.1 million, off 2.3 percent year over year. Adjusted EBITDA fell by the same rate to $204.6 million. Consolidated net revenue that includes $6.2 million from North Fork rose 2.8 percent to $488.7 million.

The operator marked its 50th anniversary by granting more than 72 million shares of Class A common stock to every full-time and part-time employee. The move creates roughly $79 million in compensation expense.

Cash Generation Supports Development Pipeline

Red Rock converted 45 percent of adjusted EBITDA into operating free cash flow, producing $81.7 million or 77 cents per share. Year-to-date free cash flow totals $288.4 million or $2.75 per share. Durango has added more than 168,000 new customers to its database while posting higher spend per visit from carded players amid residential growth in southwest Las Vegas.

Cost Overruns Fail to Dent Return Expectations

The Durango north expansion budget rose to $430 million from $385 million, with opening now set for the third quarter of 2027. The addition will bring more than 275,000 square feet including nearly 400 slot machines. The company still expects its target 20 percent return on investment. Total 2026 capital expenditures are now projected between $550 million and $570 million, incorporating the Green Valley Ranch renovation that ran from $200 million to nearly $250 million.

The North Fork Mono Casino opened October 27 after a $700 million development that finished on budget with more than 2,400 slot machines and 40 table games. Red Rock received the first $26 million installment of development fees under its seven-year management agreement. According to CDC Gaming, the company remains confident in the underlying economics and long-term returns from these investments.