Operator News

US – After its best ever month in Las Vegas, Caesars confirms it will be keeping all of its Strip casinos

By Phil - 2 November 2022

Caesars Entertainment has enjoyed its strongest ever month in Las Vegas throughout October with over $200m of EBITDA, marking double digit growth from last year, with the company confirming it would no longer be selling any of its Las Vegas casinos.

Tom Reeg, Chief Executive Officer of Caesars Entertainment, commented: “October EBITDA for bricks and mortar is pacing double-digit percentage above last year’s October despite having one fewer weekend day in the 2022 period. We intend to keep all of our strip assets as we move forward.”

Caesars reported revenues for the third quarter ended September 30, 2022, of $2.9bn versus $2.7bn for the comparable prior-year period, marking a record for a third quarter for the operator.

This gave a net income of $52m compared to net loss of $233m for the comparable prior-year period. Same-store Adjusted EBITDA of $1bn versus $880m for the comparable prior-year period.

Same-store Adjusted EBITDA, excluding the Caesars Digital segment, of $1.05bn versus $1.04bn for the comparable prior-year period.

Mr Reeg added: “Our third quarter results reflect a new quarterly record for consolidated adjusted EBITDA. Results in the quarter also reflect a new quarterly record for our bricks and mortar properties led by a new all-time high third quarter EBITDA performance in our regional segment and continued strength in Las Vegas. Caesars Digital reported strong revenue growth in the quarter and a smaller than expected EBITDA loss driven by improved operating efficiencies.”

Anthony Carano, President and COO, said: “In the third quarter, we generated a new consolidated EBITDA record excluding Digital of $1.05bn. Our Las Vegas segment continued to deliver strong results with $491m of adjusted EBITDA, excluding the real rent payment. Our regional segment delivered a new Q3 record with same-store adjusted EBITDA of $570m, up 25 per cent versus Q3 of ’19.

“Caesars Digital reported a $38m adjusted EBITDA loss, which was our smallest last quarter since rebranding to Caesars Sportsbook in August of ’21. In our Las Vegas segment, all areas of the business combined to contribute to the strong EBITDA quarter. Excluding real rent payments, our Las Vegas segment generated EBITDA of $491m and a 46 per cent EBITDA margin. Occupancy was strong, reaching 94 per cent driven by July and September. Cash hotel revenue and profit set a new Q3 record.”

“Gaming revenue also set a new Q3 record during the quarter. Group room nights during Q3 of ’22 represented approximately 12 per cent of occupied room nights. Forward group revenue pace for the remainder of the year and into ’23 is up over double digits versus ’19. Results in our 55-plus segment in Las Vegas were up again in Q3 to pre-COVID, continuing the trend we experienced in the second quarter.”

The company expects to complete renovations in Atlantic City in the first half of next year with the opening of the Nobu Hotel Tower. Horseshoe Lake Charles is set to open on December 12 whilst the company expects to open its expanded casino offering in Pompano in December as well.

Mr Carano added: “We expect to open temporary casinos in both Danville, Virginia and Columbus, Nebraska by midyear ’23. Our expansion at Harrah’s Hoosier Park is underway and should open by mid-’23. And lastly, our construction on our new hotel tower and additional amenities at our New Orleans property is progressing well with the new sports book and poker room recently opened.”

Caesars is also pursuing a downstate casino license in New York with its partner, SL Green.

Bret Yunker, CFO, said: “It will obviously be a very competitive process, and we look forward to putting our best foot forward when the RFP begins.”

Caesars now operates sports betting in 27 North American jurisdictions, 19 of which offer mobile betting. In Q4, pending regulatory approval, the company anticipates launching online sports betting in Maryland and on January 1 in Ohio. In addition, it plans on adding two new third-party retail locations during the quarter.