Accounting rules on player comps hit the bottom line of Monarch Casino & Resort Inc. in the fourth quarter but the hit didn't involve a cash outlay.
The Reno-based company, owner of Atlantis Casino Resort Spa, launched a program in October that allows patrons to redeem comp points directly for food, beverages or other services.
In the past, when patrons needed a voucher to redeem points, Monarch recognized the cost of the comps program at the time of redemption. Now, it's required to recognize the cost when points are earned.
The change created a $1.4 million charge against Monarch's fourth-quarter earnings. With the one-time charge, the company reported net income of $83,543 on revenues of $31.9 million. This compares with net of $410,339 on revenues of $32.9 million a year earlier.
John Farahi, chief executive officer and co-chairman of Monarch, said the company's challenge has been reducing costs to keep them in line with soft revenues while also protecting the quality of the property's experience for guests.
The company trimmed operating expenses in its casino by $200,000 during the fourth quarter, while also reducing food and beverage costs by $557,000 and hotel costs by $28,000. Monarch also cut $715,000 out of its general overhead.
"We are especially proud that the lower expenses were the result of several ongoing, tactical, efficiency programs, rather than general, across-the-board staff reductions that could have negatively impacted guest service," Farahi said.
He said the company believes increased efficiencies and newly constructed facilities will allow it to boost its market share.
