Red Rock Resorts has raised the budget for its Durango casino expansion to $430 million from $385 million, while maintaining a targeted 20% return on investment. The increase was announced alongside the company’s Q3 results, which showed record third-quarter net revenue for its Las Vegas operations.
The expansion, which is expected to open in the third quarter of 2027, will add more than 275,000 square feet to the property, including nearly 400 slot machines, a new bingo room and a dedicated keno lounge, Chief Financial Officer Stephen Cootey told analysts during the company’s third-quarter earnings call on Tuesday.
The project will also introduce new dining, beverage and entertainment venues, including an Italian restaurant, a Chinese restaurant and Moonshine Flats, a country-western bar with live music. Other additions include a 36-lane bowling facility, luxury movie theatres, miniature golf, golf simulators, karaoke and arcade games.
“While the estimated cost has increased, we remain confident in the project’s underlying economics and our ability to achieve our targeted 20 percent return on investment over time,” Cootey said.
Durango continues to deliver strong operating performance despite construction activity in and around the resort, attracting new customers to the Station Casinos brand, management said.
The property has added more than 168,000 customers to its database while generating increased spending per visit. Red Rock also reported higher net win from carded customers in the surrounding market during the quarter, supported by residential growth in southwest Las Vegas.
The increased Durango investment forms part of a broader capital expenditure programme, with Red Rock planning to spend between $550 million and $570 million in 2026. The spending includes projects at Durango, Sunset Station and Green Valley Ranch.
At Sunset Station, the company expects to open Leticia’s Cocina & Cantina, Sunset Bar and a new bingo room later this quarter. Construction will also begin on a premium steakhouse, alongside high-limit slot and table gaming areas.
The Sunset Station redevelopment remains on budget at approximately $87 million, with the remaining amenities expected to be completed by mid-2027.
According to Red Rock, the higher 2026 capital expenditure outlook also reflects construction delays and cost overruns associated with the recently completed hotel and convention renovation at Green Valley Ranch. The project’s initial $200 million budget increased to approximately $250 million.
“Despite these increases, we remain confident in the underlying economics of our investments and our ability to generate attractive long-term returns,” Cootey said.
North Fork Casino
Separately, Red Rock reported consolidated third-quarter net revenue of $488.7 million, up 2.8% year over year, including $6.2 million from the recently opened North Fork casino in California. Revenue from its Las Vegas operations reached a record $479.1 million, an increase of 2.3%.
However, the company reported a net loss of $17.7 million, compared with net income of $76.9 million in the same quarter last year. The decline was primarily driven by $79.1 million in share-based compensation expenses related to its 50th anniversary stock awards, alongside $6.9 million in associated one-time expenses. Adjusted EBITDA fell 2.3% to $204.6 million.
“As part of our 50th anniversary celebration, we were especially proud to make every full-time and part-time team member an owner of our company through the grant of more than $72 million in Class A common stock,” Stephen Cootey said.
“This milestone reflects our appreciation for the people who helped build Station Casinos over the past five decades and reinforces our belief that our team members should share directly in the company’s future success,” Cootey said.
Red Rock generated $81.7 million in operating free cash flow during the quarter, equivalent to 77 cents per share. Year-to-date free cash flow reached $288.4 million, or $2.75 per share.
Cootey said the cash generation gives the company flexibility to reinvest in its properties while returning capital to shareholders through dividends and share repurchases.
The company also marked the October 27 opening of the North Fork Mono Casino, a $700 million development completed on budget. The California property features more than 2,400 slot machines and 40 table games.
Red Rock has begun receiving financial benefits from the project under a seven-year management agreement and has received $26 million as the first instalment of development fees owed to the company.